Lincoln Electric (LECO) Q4 2025 earnings summary

Executive summary

• Achieved record 2025 net sales of $4.2B, up 6% year-over-year, with organic growth of 2.5%, driven by acquisitions and price despite challenging end markets.

• Adjusted EPS reached a record $9.87, up 6% year-over-year; strong cash flows enabled record shareholder returns of $507M.

• Disciplined cost management and supply chain agility offset inflation, achieving neutral price-cost target and $31M in permanent savings.

• Cash flow from operations grew 10% to $661M, with 97% cash conversion.

• Top-quartile ROIC and total shareholder return versus peers.

Financial highlights

• Q4 2025 sales rose 5.5% to $1.08B, with 8.9% higher price, 1.9% FX benefit, and 1.1% from acquisitions, offset by 6.4% lower volumes.

• Gross profit up 1% to $374M; gross margin compressed 140 bps to 34.7%.

• Adjusted operating income for Q4 was $194M (18% margin); adjusted EPS was $2.65, up 3% year-over-year.

• Adjusted ROIC for FY2025 was 21.3%.

• Cash flow from operations for FY2025 was $661M, with average operating working capital to net sales ratio at 16.9%.

Outlook and guidance

• 2026 sales growth expected in mid-single digits, split between volume and price carryover, with modest operating margin improvement.

• CapEx target $110M-$130M for 2026; strong cash flow expected to support capital allocation.

• 2030 targets: sales above $6B, average operating margin 19%, EPS mid-teens CAGR, $3.7B+ cash flow.

• Interest expense expected at $50-55M, tax rate in low-to-mid 20%, and 100% cash conversion targeted.

• Management is focused on executing the new RISE strategy and achieving 2030 growth and profitability targets.