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.

• Net income was $161.2 million, down 12% year-over-year, with diluted EPS of $1.26 and adjusted EPS of $1.20, reflecting lower volumes, higher SG&A, and increased interest expense from acquisition financing.

• SG&A-focused optimization actions are expected to generate $100 million in annual benefits by fiscal 2027, with incremental savings realized in Q3, Q4, and the remainder in fiscal 2027.

• All segments posted sales growth, but margin declines resulted from higher expenses, growth investments, and temporary inefficiencies from plant and warehouse consolidations.

• Continued focus on high-growth areas, business intelligence, and innovation, supported by recent and pending acquisitions, including the agreement to acquire Kalzip GmbH.

Financial highlights

• Net sales increased 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 fell 11.2% to $226.6 million and adjusted EBIT margin decreased 190 bps to 11.9%; adjusted EPS dropped 13.7% to $1.20.

• Operating cash flow for Q2 was $345.7 million, up $66.3 million year-over-year, and $583.2 million for the first six months, the second highest in company history.

• Debt reduced by $126.7 million in the first half; $168.7 million returned to shareholders and $161.6 million spent on acquisitions.

• Gross profit margin for Q2 was 40.8%–40.9%, down from 41.4% year-over-year.

Outlook and guidance

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

• Consolidated sales projected to grow mid-single digits in Q3 and Q4, with Consumer segment outpacing others due to acquisitions.

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

• SG&A optimization benefits will ramp up through Q4 and into fiscal 2027, with at least $20 million in expected costs for additional actions.

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