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    GFF
    Earnings call· Mar 2026(Q2 FY26)

    GRIFFON Q2 FY26 earnings call GFF

    May 7, 2026 Source

    Executive summary

    Griffon Q2 FY26 — Strong Performance in Soft Market & Strategic Focus on Building Products

    Griffon Corporation is strategically focusing on its North American building products business, reporting its continuing operations as a single segment following the planned joint venture and divestitures of its AMES businesses. The company delivered solid Q2 FY26 results, demonstrating resilience in soft U.S. housing and commercial construction markets, supported by strong pricing and product innovation. Management remains confident in its full-year guidance and capital allocation strategy, prioritizing share repurchases, debt reduction, and dividends.

    Highlights

    5

    • Q2 revenue decreased only 1% YoY to $422M despite a 6% volume reduction, supported by a 5% price and mix improvement.

    • Adjusted EBITDA margin was 23.2%, a strong performance despite a 4% decrease in absolute EBITDA to $98M.

    • Repurchased $33M of stock (422,000 shares at $78.03/share) in Q2, contributing to a 20% reduction in outstanding shares since April 2023.

    • Clopay recognized for pioneering innovation at the International Builders Show for the second consecutive year, winning an award for its Avante door with C-Power enabled click-to-conceal panels.

    • Net debt-to-EBITDA leverage improved to 2.4x from 2.6x in the prior year quarter, even after returning $72M to shareholders in H1 FY26.

    Concerns

    4

    • Q2 revenue decreased 1% YoY to $422M, driven by a 6% reduction in volume.

    • Adjusted EBITDA decreased 4% YoY to $98M, impacted by decreased volume, overhead absorption, and increased material costs, including steel.

    • Gross profit margin decreased 100 basis points to 45.5% from 46.5% in the prior year quarter.

    • Year-to-date free cash flow from continuing operations was $101M, down from $114M in the prior year.

    Guidance & targets

    12
    CategoryTargetConfidence
    Full-year FY26 Revenue
    $1.8B
    high materiality
    High
    Full-year FY26 Adjusted EBITDA
    $458M
    high materiality
    High
    Full-year FY26 Free Cash Flow from Continuing Operations
    in excess of income from continuing operations
    medium materiality
    High
    Full-year FY26 Capital Expenditures
    $50M
    medium materiality
    High
    Full-year FY26 Depreciation
    $27M
    low materiality
    High
    Full-year FY26 Amortization
    $15M
    low materiality
    High
    Full-year FY26 Interest Expense
    $93M
    medium materiality
    High
    Full-year FY26 Normalized Tax Rate
    28%
    low materiality
    High
    Clopay Price Increases
    mid-single digit
    medium materiality
    High
    AMES JV Closing
    end of June 2026
    high materiality
    High
    AMES Australia Strategic Process
    active and ongoing
    medium materiality
    Medium
    AMES United Kingdom Business Exit
    completed by the end of the calendar year
    medium materiality
    High

    Segment performance

    1
    SegmentRevenueYoYQoQMargin
    Continuing Operations
    Reflects the new reporting structure as a single segment, with prior periods restated. Revenue decrease driven by residential volume softness partially offset by price and mix improvements. Adjusted EBITDA decreased 4% YoY to $98M, impacted by decreased volume, overhead absorption, and increased material costs.
    Volume reduction: 6%Price and mix improvement: 5%
    		$422M-1%—23.2% Adjusted EBITDA margin

    Operational metrics

    15
    Adjusted EBITDA
    $98M-4% YoY
    Q2 FY26

    Decreased due to decreased revenue, unfavorable impact of decreased volume and overhead absorption, and increased material costs including steel.

    Gross Profit Margin
    45.5%-100 bps YoY
    Q2 FY26

    Compared to 46.5% in the prior year quarter.

    Selling, General and Administrative Expenses
    $105M
    Q2 FY26

    Compared to $107M or 25% of revenue in the prior year.

    Adjusted Net Income from Continuing Operations
    $48M
    Q2 FY26

    Compared to $49M or $1.05 per share in the prior year, excluding items that affect comparability.

    GAAP Income from Continuing Operations
    $47M
    Q2 FY26

    Compared to $50M or $1.06 per share in the prior year quarter.

    Net Capital Expenditures
    $18Mvs $26M prior year YTD
    YTD FY26

    Year-to-date figure.

    Net Debt
    $1.3B
    March 31, 2026

    As of quarter end.

    Net Debt-to-EBITDA Leverage
    2.4xvs 2.6x prior year Q2
    March 31, 2026

    Improved from prior year, even after returning $72M to shareholders in H1 FY26.

    Share Repurchases
    $33M
    Q2 FY26

    Under the repurchase authorization.

    Cumulative Share Repurchases
    $611M
    April 2023 through March 2026

    Since April 2023.

    Share Count Reduction
    20%
    Since Q2 FY23

    Relative to total shares outstanding at the end of Q2 FY23.

    Quarterly Dividend
    $0.22
    Q3 FY26

    Payable on June 17 to shareholders of record on May 29.

    AMES JV Cash Proceeds
    $100M
    Upon JV completion

    Cash proceeds Griffon will receive when the joint venture with ONCAP is completed.

    AMES JV Paid-in-Kind Notes
    $161M
    Upon JV completion

    Second lien notes from the joint venture.

    Steel Cost Realization Lag
    4-5 months
    Ongoing

    Lag from purchase to actual realization of the cost.

    Industry KPIs

    1
    MetricValueDetails
    Price cost5%%

    Product announcements

    1
    ProductTypeDetails
    Avante door with C-Power enabled click-to-conceal panelslaunch

    Deals & partnerships

    3
    ONCAPFormation of a joint venture involving AMES U.S. and Canadian businesses.Griffon to receive $100M cash proceeds and $161M second lien paid-in-kind notes.

    The joint venture will include Griffon's AMES U.S. and Canadian businesses. Griffon will receive cash proceeds and paid-in-kind notes upon completion.

    AMES AustraliaStrategic review of the AMES Australia business.

    The strategic process for AMES Australia is active and ongoing, with updates to be provided as available.

    AMES United KingdomDecision to exit the AMES United Kingdom business due to persistent economic challenges.

    After careful consideration, the company decided to exit the AMES UK business. This action is expected to be completed by the end of the calendar year.

    Risks & headwinds

    3
    Soft U.S. housing and commercial construction marketscontinuing

    6% reduction in volume (Q2 revenue impact)

    Mitigation: Resiliency managing through uncertain global economic conditions; benefits from price and mix; focus on repair and remodel for residential.

    Increased material costs (steel)Q2 FY26

    Contributed to 4% adjusted EBITDA decrease in Q2 FY26

    Mitigation: Ability to price, with a 4-5 month lag for cost realization.

    Weak consumer demand at the lower endlast 18 months (for Hunter fan business)

    Weakness in the consumer, particularly at the lower end

    Mitigation: Clopay addresses the higher end of repair and remodel; Hunter fan business is stable and ready for when the consumer returns.

    What to watch in Q3 FY26

    5

    AMES JV Closing

    Q3 FY26
    CurrentExpected by end of June 2026
    TargetJV closed

    Why it matters

    Completion of the joint venture will provide $100M cash proceeds and $161M in PIK notes, significantly impacting liquidity and balance sheet structure.

    We continue to expect to close our joint venture with ONCAP, which will include our AMES U.S. and Canadian businesses by the end of June 2026.

    Q&A highlights

    8

    What are the underlying assumptions for end markets in the fiscal second half, especially regarding residential and commercial volume, and how will pricing impact the top-line cadence given prior year pricing laps?

    Management expects second half quarters to be similar to recent trends, with soft residential volume and roughly flat commercial volume. Benefits from price and mix are anticipated, noting that Clopay implemented mid-single-digit price increases effective at the end of March. The second half is also expected to be the strongest free cash flow period.

    “We expect the second half quarters to be similar to what we've seen over the last several quarters. As you mentioned, residential volume will continue to be soft. Commercial roughly flat, and we'll see benefits from price and mix. I will point out that Clopay had price increases recently issued, mid-single digit that were effective at the end of March.”

    asked by Unknown Analyst · answered by Brian Harris

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Realignment to Pure-Play Building Products

    Griffon is undergoing a significant strategic transformation to become a pure-play North American building products company. This involves the formation of a joint venture for its AMES U.S. and Canadian businesses, a strategic review of AMES Australia, and the decision to exit the AMES United Kingdom business due to economic challenges. As a result, the company's financial performance is now presented as a single segment for continuing operations, with the Global AMES businesses reported as discontinued operations.

    02

    Clopay's Continued Product Innovation Leadership

    Clopay, a key part of Griffon's continuing operations, has maintained its position as a leader in garage door innovation. For the second consecutive year, Clopay received a 'Best of IBS' award at the International Builders Show. This year's recognition was for its Avante door featuring C-Power enabled click-to-conceal panels, which allows windows to instantly transition from clear to opaque, offering enhanced privacy and flexibility for residential and commercial spaces.

    03

    Resilient Performance Amidst Soft Market Conditions

    Despite facing soft U.S. housing and commercial construction markets, Griffon's continuing operations demonstrated solid performance in Q2 FY26. Revenue decreased only 1% year-over-year to $422 million, primarily due to a 6% reduction in volume, which was largely offset by a 5% improvement in price and mix. The business benefits from its focus on the repair and remodel segment in residential markets, which has low exposure to new home construction, and a growing commercial segment.

    04

    Consistent Capital Allocation Strategy

    Griffon remains committed to a capital allocation strategy focused on delivering long-term shareholder value. This includes supporting a quarterly dividend, which has grown at an annualized compounded rate of over 19% since 2012, and opportunistic share repurchases. Since April 2023, the company has repurchased $611 million worth of stock, reducing outstanding shares by 20%, while also prioritizing debt reduction, as evidenced by an improved net debt-to-EBITDA leverage ratio of 2.4x.

    05

    Operational Execution and Margin Management

    The company's operational teams are executing well, leading to a Q2 FY26 adjusted EBITDA of $98 million, representing a 23.2% margin. While adjusted EBITDA decreased 4% year-over-year, the strong margin reflects effective management of decreased volume, overhead absorption, and increased material costs, including steel. The company anticipates realizing substantial operating leverage as market activity improves in the future.

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