Stepan Company (SCL) Q2 2026 earnings summary

Executive summary

• Adjusted EBITDA for Q2 2026 reached $74.4 million, up 45% year-over-year, driven by broad-based volume growth, margin recovery, and Project Catalyst savings.

• Net sales rose 15% to $684.1 million, reflecting higher prices, volumes, favorable mix, and currency translation.

• Adjusted net income was $27.1 million ($1.18 per diluted share), up 126% year-over-year.

• Strong safety performance was highlighted, with the best record in the past 12 months.

• Project Catalyst restructuring led to significant charges in H1 2026 and included a reduction of approximately 100 salaried positions and multiple site closures.

Financial highlights

• Gross profit for Q2 2026 increased to $100.0 million from $71.9 million year-over-year.

• Operating income for Q2 2026 rose to $37.2 million from $18.0 million in Q2 2025.

• Free cash flow was negative $15.0 million, impacted by a $58 million working capital build and $23.4 million in capital expenditures.

• Net leverage ratio improved to 2.5x from 2.9x a year ago; net debt at $534 million and net debt to capital at 31%.

• Adjusted EBITDA margin for Q2 was 10.9%, up from 8.6% in the prior year.

Outlook and guidance

• Project Catalyst expected to deliver ~$100 million in pre-tax savings over two years, with $22 million quarterly run rate targeted by year-end and 60% realized in 2026.

• Full-year 2026 restructuring charges are projected at $75–80 million, with $4–6 million related to Q3 workforce reduction and a cash impact of $14–18 million.

• 2026 capital expenditures forecasted at $100–110 million; scheduled debt repayments of $59 million and effective tax rate of 24–26%.

• Management expects continued adjusted EBITDA growth, positive free cash flow, and further deleveraging in 2026.

• Q3 EBITDA expected to be slightly lower than Q2 due to normalization of volumes and margins; some Q2 demand was pulled forward due to customer pre-buying amid geopolitical and raw material uncertainty.