Franklin Electric (FELE) Q4 2025 earnings summary

Executive summary

• Achieved record full-year sales of $2.1 billion, up 5.4% year-over-year, and Q4 sales of $506.9 million, up 4.4%, with operating income up 10% for the year and 20% in Q4.

• Adjusted diluted EPS for 2025 was $4.14, up 6% year-over-year; GAAP EPS was $3.22, impacted by a $41.5 million pension settlement charge.

• Strong cash conversion at 125–126% for the third consecutive year above 120%.

• Launched the Value Acceleration Office to drive productivity, process reengineering, and AI adoption.

• Over 35 new products launched, expected to generate $160 million in revenue by year three.

Financial highlights

• Full-year consolidated sales reached $2.1–$2.131 billion, up 5–5.4% year-over-year; Q4 sales were $506.9 million, up 4–4.4%.

• Full-year operating income was $268.9–$269 million, up 10%, with operating margin at 12.6%, up 50 basis points; Q4 operating margin improved to 10.2%.

• Gross profit for the year was $755.9 million (35.5–35.9% of sales), flat year-over-year.

• Adjusted EPS for 2025 was $4.14, up 6%; reported EPS was $3.22, impacted by pension settlement and restructuring expenses.

• Interest expense increased by $4.3 million (68% year-over-year); tax rate rose to 23.6%, up 190bps.

Outlook and guidance

• 2026 sales expected between $2.17–$2.24 billion, with adjusted EPS guidance of $4.40–$4.60, implying 3% sales growth and 9% EPS growth at the midpoint.

• Margin expansion projected across all segments, with distribution expected to see the largest improvement.

• Healthy order trends and a strong balance sheet are expected to support future growth.

• Typical seasonality anticipated, with growth across all quarters.

• Expecting top-line growth despite a soft macroeconomic environment.