Earnings Recap — Q4 FY2026
CY Q3 2026 · Reported July 22, 2026 · Beat 4 of last 6 quarters
RPM International Inc. reported Q4 FY2026 revenue of $2.23B, a beat of 2.3% against consensus, and EPS of $1.89, a beat of 3.3%.
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RPM's record quarter was partly powered by engineered solutions for data centers and infrastructure, with management noting data centers are about 1%-2% of overall business but growing above the average. The company's system-selling approach across all six sides of a building, including concrete admixtures, fireproofing, and FRP grating, positions it to capture a slice of the massive data center construction pipeline. However, management cautioned not to overstate the data center impact, as two-thirds of CPG and PCG revenue comes from maintenance and restoration, which provides a steadier demand base through volatile construction cycles.
RPM reported record fourth-quarter sales, up 7.2%, with record adjusted EBIT and record adjusted EPS. All three reported segments grew sales and adjusted EBIT, led by Construction Products Group and Performance Coatings Group, which benefited from maintenance and restoration solutions, data center and infrastructure projects, and system selling. Consumer Group posted record sales driven by acquisitions and pricing, though DIY end markets remained soft with unit volumes down low single digits. International regions all grew double digits, led by emerging markets, and the Middle East delivered mid-teen sales growth despite severe supply chain disruptions. The company generated $899 million of operating cash flow for the fiscal year, the second highest in its history, and noted the quarter remained strong.
Management guided FY2027 sales growth of 3%-7% and adjusted EBITDA growth of 5%-10%, with all segments expected to grow mid-single digits in Q1. Raw material inflation is expected at 5%-6% in Q1 and as high as 6%-8% in Q2, with price-cost somewhat negative in the first half before becoming more neutral in the back half as additional price increases take hold and inflation moderates. The company expects $75 million in SG&A-focused optimization savings in FY2027, partially offset by higher healthcare and benefit expenses, and noted that temporary plant consolidation headwinds from FY2026 will diminish as plants close, though start-up costs at new shared facilities will offset a portion. Management highlighted a healthy M&A pipeline focused on adjacent consumer categories and system components, a $700 million increase to the share repurchase authorization, and plans to provide more detail on the MAP 3.0 strategic plan at an Investor Day on November 9. The tone was confident in RPM's ability to outperform in a volatile environment but candid about limited visibility, particularly in Consumer, and the likelihood of continued geopolitical and tariff-related uncertainty.
“This fourth quarter represents the 16th quarter of the last 18th quarters that we have achieved record adjusted EBIT results.”
on Record profitability streak
“Backlogs remain strong across both CPG and PCG, we had, as you'll recall, in fiscal 2026, a pretty volatile year, as did everybody.”
on Backlog and volatility
“If we find ourselves in a period of stability, you'll see RPM be able to generate mid-single-digit revenue growth and double-digit earnings growth.”
on Growth algorithm
Can you unpack the strength in CPG and PCG, including onshoring data centers, and how much visibility you have on those trends for fiscal 2027?
Frank Sullivan said backlogs remain strong across both CPG and PCG but anticipated another volatile year given Middle East uncertainty and renewed tariff activity, noting RPM has proven it can perform well versus peers in that environment.
How much lower were organic volumes in Consumer, and is the expected DIY stabilization at a low level or are there signs of green shoots?
Frank Sullivan said CPG and PCG saw low to mid-single-digit unit volume growth while Consumer volumes declined 2%-3%, with results aided by The Pink Stuff and Ready Seal acquisitions. He said consumer takeaway feels like it is hitting bottom after two years of declines but does not suggest a robust rebound.
Are you executing to plan on pricing, and is there any change in how you use surcharges versus structural price? What pushback have you seen?
Frank Sullivan said price was up about 2% in the quarter with further increases announced for late July and August, mostly structural, and that RPM has generally recovered price dollar-for-dollar and retained it as raw materials decline. He noted surcharges are temporary and mostly tied to freight costs.