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    CSL
    Earnings call· Mar 2026(Q1 FY26)

    CARLISLE COMPANIES Q1 FY26 earnings call CSL

    Apr 23, 2026 Source

    Executive summary

    Carlisle Q1 FY26 — Margin Expansion Despite Revenue Decline

    Carlisle navigated a challenging Q1 FY26, achieving adjusted EBITDA margin expansion and EPS growth despite a revenue decline driven by weather and prior-year timing factors. The company reaffirmed its full-year outlook, banking on strong operational execution, recent price increases to offset rising raw material costs, and continued strength in its resilient reroofing segment, while remaining cautious on new construction and geopolitical risks.

    Highlights

    5

    • Adjusted EBITDA margin expanded by 50 basis points to 22.3% despite a 4% revenue decline.

    • Adjusted EPS rose to $3.63, up 1% year-over-year, driven by share repurchases.

    • Orders improved as the quarter progressed, with April activity encouraging and reroofing work in line with seasonal norms.

    • Reaffirmed full year 2026 outlook for revenue growth at the higher end of low single-digit range and ~50 basis points adjusted EBITDA margin expansion.

    • Strong financial position with $771 million in cash and a net debt-to-EBITDA ratio of 1.7x, within target.

    Concerns

    5

    • Q1 revenue was $1.1 billion, down 4% year-over-year, primarily due to winter weather delays and a $15 million tariff-related pull-forward in Q1 2025 not repeating.

    • CWT adjusted EBITDA margin decreased 40 basis points to 15.2% due to lower volumes and an unfavorable mix.

    • Rising oil prices impacted petrochemical-linked raw materials and freight, necessitating two rounds of price increases.

    • Continued uncertainty in new construction related to higher interest rates and geopolitical volatility.

    • Net cash used in operating activities was $45 million, and free cash flow used was $73 million, reflecting a $125 million post year-end tax settlement.

    Guidance & targets

    15
    CategoryTargetConfidence
    Full-year consolidated revenue growth
    low single-digit range, at the higher end (~3%)
    high materiality
    High
    Full-year consolidated adjusted EBITDA margin expansion
    approximately 50 basis points
    high materiality
    High
    Full-year consolidated EPS growth
    double-digit growth
    high materiality
    High
    CCM revenue growth
    low single digits
    medium materiality
    High
    CWT revenue growth
    low single digits
    medium materiality
    High
    CWT EBITDA margin improvement
    at least 100 basis points
    medium materiality
    High
    CWT EBITDA margin
    around 19%
    medium materiality
    High
    CWT EBITDA margin
    improving to 22%
    medium materiality
    High
    CCM EBITDA margin
    approaching that 31%
    medium materiality
    High
    CCM EBITDA margin
    slightly exceed that 31%
    medium materiality
    High
    CCM EBITDA margin
    right around 28%
    medium materiality
    High
    Full-year CCM EBITDA margin improvement
    about 50 basis points
    medium materiality
    High
    Annual share repurchase target
    $1 billion
    high materiality
    High
    Vision 2030 adjusted EPS
    $40
    high materiality
    High
    Vision 2030 ROIC
    25% plus
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    CCM
    Reflecting lower volumes due to winter weather and last year's tariff-related pull forward, along with continued softness in commercial new construction, partially offset by solid reroofing growth. COS productivity, disciplined procurement, and S&A cost controls contributed to margin improvement.
    Adjusted EBITDA: $208 millionAdjusted EBITDA down 4% YoY
    		$758 milliondown 5%—27.4%
    CWT
    Reflects contributions from recent acquisitions mostly offsetting volume pressure from continued softness in residential and nonresidential new construction. Margin decrease due to lower volumes, partially offset by internal initiatives like footprint consolidation and in-house production expansion.
    Adjusted EBITDA: $45 millionAdjusted EBITDA down 3% YoY
    		$294 milliondown 1%—15.2%

    Operational metrics

    18
    Adjusted EPS
    $3.63up 1% YoY
    Q1 FY26

    Driven by share repurchases, offsetting lower organic earnings and higher interest expense.

    Adjusted EBITDA margin
    22.3%up 50 bps YoY
    Q1 FY26

    Result of strong execution, COS-driven productivity gains, procurement discipline, and efficient management of S&A costs.

    Net Debt-to-EBITDA ratio
    1.7x
    as of March 31, 2026

    Within the company's target range.

    Cash and cash equivalents
    $771 million
    as of March 31, 2026

    Part of strong financial position.

    Available revolving credit facility
    $1 billion
    as of March 31, 2026

    Part of total liquidity.

    Net cash used in operating activities
    $45 million
    Q1 FY26

    Seasonality in Q1 involves deploying cash for year-end incentives, rebates, and building working capital.

    Capital expenditures
    $28 million
    Q1 FY26

    Investment in innovation and capital expenditures.

    Share repurchases
    $250 million
    Q1 FY26

    Part of capital returned to shareholders, maintaining pace toward annual $1 billion target.

    Dividends paid
    $46 million
    Q1 FY26

    Part of capital returned to shareholders.

    Reroofing revenue as percentage of CCM commercial roofing
    70%
    Q1 FY26

    Represents the primary revenue engine for CCM, supported by aging installed base and increasing content per square foot.

    Tariff-related order pull forward (Q1 2025)
    $15 million
    Q1 2025

    Benefited Q1 2025 results, did not repeat in Q1 2026, contributing to YoY revenue decline.

    Winter weather impact on Q1 revenue
    $30 million-$35 million
    Q1 FY26

    Estimated impact from delayed projects and shipments across North America.

    Raw material inflation
    high single-digit
    FY26

    Baked into guidance, with price/cost assumption for full year being neutral.

    MDI cost increase
    double digits
    Q1 FY26

    Impacted by supply-demand dynamics and benzene prices.

    TPO resins cost increase
    double digits
    Q1 FY26

    Closely linked to propylene index.

    Polyols cost increase
    high single-digit range
    Q1 FY26

    Tied to supply-demand dynamics and diethylene glycol.

    Price increases (March/April)
    5% to 8%
    March/April 2026

    Announced in mid-March and mid-April to offset rising raw material and freight costs.

    Revenue growth from price
    2 percentage points
    FY26

    All improvement in full-year revenue guidance is attributed to price, with no change in volume expectations.

    Industry KPIs

    5
    MetricValueDetails
    Price costneutral
    Order backlog—
    Organic operating leverage50 basis pointsbps
    Service aftermarket attach70%%
    Orders bookings growth by verticallow single digits%

    Product announcements

    2
    ProductTypeDetails
    ThermaThin R7 insulationlaunch
    New foam adhesives gunlaunch

    Risks & headwinds

    5
    Winter weather delaysQ1 FY26

    Delayed projects and shipments across many regions in North America, impacting Q1 revenue by ~$30 million-$35 million.

    Mitigation: Orders improved as the quarter progressed, and the company exited March with better momentum as weather disruptions subsided.

    Absence of prior-year tariff-related order pull-forwardQ1 FY26

    Q1 2025 benefited from approximately $15 million of tariff-related order pull forward from Canadian customers, which did not repeat this year.

    Continued uncertainty in new constructionFY26

    New construction remains soft across both residential and nonresidential markets. Higher for longer interest rate environment continues to weigh on activity.

    Mitigation: Full year outlook does not assume a near-term recovery; plans appropriately reflect this reality.

    Geopolitical escalation and rising input costsFY26

    Rising oil prices impacted petrochemical-linked raw materials (MDI, TPO resins up double digits; polyols up high single digits) and freight. Full-year raw material inflation expected to be high single-digit as % of raws.

    Mitigation: Acted quickly with two rounds of price increases (5-8%) across CCM and CWT in mid-March and mid-April, and implemented real-time freight surcharges. Expect price/cost dynamics to improve sequentially, aiming for neutral full-year impact.

    Middle East conflict volatilityOngoing

    Heightened risk surrounding the Iran conflict and sustained disruption through the Straits of Hormuz introduces uncertainty.

    Mitigation: Monitoring very closely. Prepared to take additional pricing actions if volatility persists and structural cost levels reset higher.

    What to watch in Q2 FY26

    5

    CWT EBITDA Margin Trajectory

    next quarter
    Current15.2% in Q1 FY26
    Targetaround 19% in Q2 FY26

    Why it matters

    CWT margin expansion is a key focus for the year, with specific quarterly targets provided, indicating the effectiveness of internal initiatives.

    As we see it play out during the year, we think we'll see💬 improvement from quarter-to-quarter. So Q2 might be around 19% and then improving to 22% in Q3.

    Q&A highlights

    6

    How are new products and service offerings impacting price elasticity and market share, especially with recent price increases?

    New products like ThermaThin R7 insulation and a new foam adhesives gun, which improve energy efficiency and reduce labor, differentiate Carlisle. This, combined with reliable service (Carlisle Experience), creates customer stickiness, allowing the company to price to value and potentially gain market share.

    “when you deliver on new products and you deliver on service, obviously, you get stickier with your customer, you get stickier with your architects, people depend on you. And hopefully, that allows you to grow share as well as, and we've been talking about this, increase the profitability and sales dollars per square foot because people -- as we said, we're going to price the value.”

    asked by Susan Maklari · answered by D. Koch

    2 min read7 chapters

    Detailed Narrative

    01

    Q1 Performance & Margin Resilience

    Despite a 4% year-over-year revenue decline to $1.1 billion, Carlisle demonstrated strong operational execution, expanding adjusted EBITDA margin by 50 basis points to 22.3% and increasing adjusted EPS by 1% to $3.63. This margin expansion was attributed to COS-driven productivity gains, procurement discipline, and efficient management of selling and administrative costs, showcasing the company's ability to perform through cycles.

    02

    Demand Trends & Reroofing Strength

    Underlying demand trends were consistent with expectations, though Q1 was impacted by winter weather and the absence of a prior-year tariff-related pull-forward📎. Commercial reroofing, accounting for approximately 70% of CCM's commercial roofing business, continued to provide stable, recurring demand with low single-digit growth, supported by an aging installed base and increasing content per square foot.

    03

    New Construction Headwinds

    New construction remained soft across both residential and nonresidential markets, as anticipated. The company's full-year outlook does not assume a near-term recovery, reflecting the ongoing impact of a "higher for longer" interest rate environment and broader economic and geopolitical uncertainties on construction activity.

    04

    Pricing Actions & Raw Material Volatility

    Geopolitical escalation led to rising oil prices and petrochemical-linked raw material costs. Carlisle responded with two rounds of price increases in mid-March and mid-April across CCM and CWT, along with real-time freight surcharges. Management expects price/cost dynamics to improve sequentially through the remainder of 2026, aiming for a neutral price/cost impact for the full year.

    05

    CWT Margin Improvement Initiatives

    CWT's Q1 revenue declined 1% and adjusted EBITDA margin decreased 40 basis points to 15.2%. However, the company sees a clear path to meaningful margin expansion, targeting at least 100 basis points improvement for the full year, driven by automation, footprint consolidation, and expansion of in-house production of expanded polystyrene resin. Q2 CWT EBITDA margin is expected around 19%, improving to 22% in Q3.

    06

    Capital Allocation & Financial Strength

    Carlisle maintains a strong financial position with $771 million in cash and a net debt-to-EBITDA ratio of 1.7x, within its target range. The company returned $296 million to shareholders in Q1 through $250 million in share repurchases and $46 million in dividends, reaffirming its commitment to a $1 billion annual share repurchase target.

    07

    New Product Introductions

    Carlisle is forecasting the release of 10-12 new products this year, with the most significant being ThermaThin R7 insulation. This product, designed to increase energy efficiency and reduce labor costs, won two awards at IRE and is expected to start impacting deliveries around July. Other new products, like a new foam adhesives gun, will contribute to growth in the second half.

    AI-generated summary of the company’s earnings call. Not investment advice.