Franklin Electric (FELE) Q4 2025 earnings summary

Executive summary

• Achieved record sales and segment operating income in 2025, with consolidated net sales up 5.4% to $2.1 billion and operating income up 10% year-over-year.

• Fourth quarter sales rose 4.4% to $506.9 million and operating income increased 20% to $51.6 million compared to Q4 2024.

• Strong cash conversion at 125–126% for the year, with a healthy order book and backlog entering 2026.

• Launched Value Acceleration Office to drive process engineering, AI, and cost management, expected to contribute to future margin expansion.

• Growth supported by pricing actions, transformation initiatives, and strategic investments.

Financial highlights

• Full-year 2025 consolidated sales reached $2.1–$2.131 billion, up 5.4% year-over-year; Q4 sales were $506.9 million, up 4% year-over-year.

• Adjusted diluted EPS was $4.14, up 6% from 2024; reported EPS was $3.22, impacted by a $41.5 million pension settlement charge.

• Full-year operating income was $269 million, up 10% from 2024; operating margin expanded to 12.6%.

• Q4 gross profit was $171.5 million (33.8% margin); full-year gross profit was $755.9 million (35.5–35.9% margin), both flat as a percentage of sales year-over-year.

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

Outlook and guidance

• 2026 sales guidance: $2.17–$2.24 billion, implying over 3% growth at the midpoint.

• Adjusted EPS guidance for 2026: $4.40–$4.60, midpoint growth of ~9%.

• Expecting top-line growth and margin expansion across all segments despite macroeconomic headwinds.

• Water segment organic growth expected in the 3–5% range, energy over 3%, and distribution 3–4%, with a balanced mix of price and volume.

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