RPM International (RPM) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 sales of $1.91 billion, up 3.5% year-over-year, driven by acquisitions and high-performance building solutions, but organic sales declined 0.5% and momentum slowed due to soft DIY demand and longer construction project lead times.

• Adjusted EBIT fell 11.2% to $226.6 million and adjusted EPS dropped 13.7% to $1.20, reflecting lower volumes, higher SG&A, growth investments, and temporary plant consolidation inefficiencies.

• Net income attributable to stockholders was $161.2 million, down 12% year-over-year, with diluted EPS of $1.26.

• SG&A optimization actions are underway, expected to yield $100 million in annual benefits, with incremental savings realized through fiscal 2027.

• Continued focus on high-growth areas such as high-performance buildings, business intelligence, and innovation, supported by recent and pending acquisitions.

Financial highlights

• Q2 sales grew 3.5% year-over-year to $1.91 billion, with acquisitions contributing 3.4%, FX 0.6%, and organic sales down 0.5%.

• Adjusted EBIT margin decreased 190 bps to 11.9%; net income margin was 8.4% (down from 9.9%); gross profit margin declined to 40.8%.

• Operating cash flow for the first six months was $583.2 million, up $66.3 million year-over-year, enabling $127 million in debt repayment, $169 million returned to shareholders, and $162 million spent on acquisitions.

• Total liquidity at quarter-end was $1.1 billion.

• Interest expense increased due to higher acquisition-related borrowings.

Outlook and guidance

• Market conditions expected to remain sluggish in Q3, with soft DIY demand and extended construction project lead times.

• Q3 consolidated sales expected to increase mid-single digits, with Consumer segment outpacing others due to acquisitions.

• Adjusted EBIT anticipated to grow mid- to high-single digits in Q3; Q4 sales and EBIT also expected to grow mid-single digits, with volume growth as a key variable.

• SG&A optimization benefits to be more fully realized in Q4 and fiscal 2027.

• Inflationary headwinds and temporary inefficiencies from plant consolidations are expected to persist through fiscal 2026.