RPM International Inc. (NYSE:RPM) shares rose Wednesday after the company reported better-than-expected results for its fiscal third quarter of 2026, driven by strong sales growth and margin expansion.
Revenue And EPS Outperformance
The company posted record sales of $1.608 billion, up 8.9% from a year earlier and ahead of analysts' estimates of $1.546 billion. Adjusted earnings were 57 cents per share, a 62.9% increase year over year and above the consensus estimate of 35 cents.
Sales growth included a 3.0% increase in organic sales, a 3.5% contribution from acquisitions, and a 2.4% benefit from foreign currency translation. The company cited strength in engineered solutions for high-performance buildings, along with contributions from acquisitions and favorable currency movements. Results also benefited from a rebound following a prior government shutdown and easier year-over-year comparisons.
Margin Expansion And EBIT Growth
Chairman and CEO Frank C. Sullivan said RPM delivered record third-quarter results despite volatile markets, driven by strong execution and demand in key end markets. He emphasized that MAP operational initiatives helped the company convert higher volumes into broad-based margin expansion across all segments, while also supporting robust operating cash flow.
Adjusted earnings before interest and taxes rose 48.8% to $116.4 million, supported by higher volumes and improved fixed-cost leverage.
For the first nine months of fiscal 2026, operating cash flow totaled $656.7 million, while capital expenditures were $159.6 million. As of Feb. 28, total debt stood at $2.56 billion, and liquidity was $1.02 billion. The company returned $255.3 million to shareholders through dividends and share repurchases during the period.
Regional Performance Highlights
By region, Europe led growth with sales up 20.1%, driven by acquisitions and favorable foreign exchange. North America sales rose 6.3%, supported by acquisitions and demand for high-performance building solutions. Growth in emerging markets was led by Africa and the Middle East, supported by infrastructure and construction activity.
Among segments, Construction Products Group sales increased 10.5% to $546.7 million, while adjusted EBIT surged 178.8% to $30.3 million. Performance Coatings Group revenue rose 8.4% to $496.8 million, with adjusted EBIT up 20.0% to $66.8 million. Consumer Group sales climbed 7.9% to $564.5 million, and adjusted EBIT increased 15.0% to $58.5 million.
Outlook And Management Commentary
Looking ahead, RPM expects mid-single-digit sales growth in the fourth quarter, with adjusted EBIT projected to rise in the low- to high-single-digit range.
Sullivan said the company expects to deliver record results for the full year despite tougher comparisons and ongoing geopolitical uncertainty in the Middle East. He added that the company is using centralized procurement strategies and pricing actions to mitigate inflation and manage supply chain pressures.
RPM Price Action: RPM International shares were up 12.44% at $108.74 at the time of publication on Wednesday, according to Benzinga Pro data.
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