RPM International Misses Q2 Earnings Despite Record Sales

RPM International Inc. (NYSE: RPM) has released its financial results for the second quarter of fiscal 2026, revealing a performance that fell short of market expectations. The company reported record sales but faced challenges in meeting earnings and revenue projections.

Q2 Earnings Miss Overshadows Record Revenue Growth

RPM International Inc. reported its fiscal 2026 second-quarter results with record sales of $1.91 billion, representing an increase of 3.5% compared to the previous year. Despite this achievement, the company fell short of expectations, with an earnings per share (EPS) of $1.20, missing the anticipated $1.43. Revenue also came in below the expected $1.94 billion, reaching only $1.91 billion.

The company faced several challenges during the quarter, including prolonged government shutdowns that extended lead times on construction projects and negatively affected consumer sentiment. As a result, RPM was unable to fully capitalize on growth investments, and earnings declined due to temporary margin pressures from plant and warehouse consolidations.

Geographically, Europe led sales growth with a 13.9% increase, driven by acquisitions and favorable foreign exchange rates. In North America, sales grew by 1.9%, while emerging markets such as Africa and the Middle East saw growth in high-performance building projects. However, these gains were not enough to offset the overall decline in adjusted EBIT, which fell by 11.2% compared to the prior year.

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RPM Guides for Mid-Single-Digit Growth in Second Half

Looking ahead, RPM International has provided guidance for the third and fourth quarters of fiscal 2026, anticipating mid-single-digit sales growth and an increase in adjusted EBIT. The company expects the third quarter to see consolidated sales rise in the mid-single-digit percentage range, with adjusted EBIT increasing in the mid-to-high single digits.

For the fourth quarter, RPM forecasts continued mid-single-digit sales growth and adjusted EBIT to rise in the low-to-high single-digit range. The company is implementing optimization actions focused on SG&A, which are expected to generate approximately $100 million in annual benefits once fully realized. These actions are part of RPM’s strategy to navigate the challenging market conditions while continuing to invest in high-potential growth opportunities.

CEO Frank C. Sullivan noted that while market demand remains sluggish, RPM is well-positioned to benefit from deferred construction projects and a solid construction pipeline. The company remains committed to its growth investments and optimization initiatives, which are expected to support margins and drive future performance.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.