Owens Corning (OC) Q1 FY26 earnings call: guidance and Q&A

Is management still comfortable with the previously stated expectation of market improvement through 2026 and results largely in line with current consensus, given market uncertainty?

Management remains comfortable with the full-year outlook, stating that the year has started consistent with expectations. Q1 performance and Q2 guidance (20%+ EBITDA margins) demonstrate confidence in business execution despite market uncertainty.

“I think the year has started out very consistent with what we expected when we talked about it in the last call. We've seen actually good progression and a little bit of improvement in terms of the performance in Q1, our Q2 guide is, again, right in line getting back to the sticky kind of 20% plus EBITDA margins for the company within all of the current market environment and some of the uncertainty.”

asked by John Lovallo · answered by Brian Chambers

What drove the margin upside in Roofing in Q1, why did volumes underperform the market, and what factors are driving the expected outperformance in Q2?

Q1 margin upside was volume-driven due to accelerated restocking and better productivity offsetting curtailment costs. Q1 volume underperformance was attributed to the company's retail presence, which doesn't participate in early stocking. Q2 outperformance is expected from contractor growth and overall market strength.

“With free supply of shingles we thought some of that could be pushed into Q2. So we saw a little acceleration of that towards the end of the quarter relative to the price increase we have in the market. And so that additional volume really just gave us some additional leverage.”

asked by Michael Rehaut · answered by Brian Chambers

Can you provide more insight into the supply and demand dynamics across North American residential, non-residential, and European Insulation markets for the remainder of the year?

North American residential is stable with encouraging March starts, expecting benefits late Q2. The industry can support 1.4M-1.5M housing starts. Non-residential shows strong demand in AI/data centers, with some product lines sold out. Europe is relatively stable with pockets of strength, though Germany is weaker.

“When we look at nonres, there are pockets of real strength in nonres where we're in very strong demand environment. Anything related to AI data centers the reindustrialization of North America has been strong for us on the nonres side.”

asked by Stephen Kim · answered by Todd Fister

Is the $60 million Q2 inflation a full ramp, and how should we think about the price-cost spread in the back half of the year, given recent price increases?

The $60 million Q2 inflation is primarily from asphalt, delivery, and purchased materials, with about half impacting Roofing. If oil prices remain stable, this could be a stable run rate. Q2 will see negative price-cost, but H2 could improve to neutral or positive with the full realization of June price increases.

“So Q2 is is the quarter where we're feeling the most pressure of the inflation coming through without corresponding price increases to offset it. ... So we would expect a more positive benefit from those in Q3 and Q4, assuming good market traction, which would then start to offset the inflation that we're seeing come through.”

asked by Philip Ng · answered by Todd Fister

Can you provide more color on the timeline, certainty, and inclusion of the potential tariff refunds in the company's outlook?

The company may be eligible for $50 million in tariff refunds, with $25 million already submitted. These refunds are not included in the Q2 outlook and represent potential upside. Timing is uncertain (late Q2 or Q3), but the market indicates a high likelihood of receipt.

“As a result of the recent Supreme Court ruling on tariffs, the company may be eligible for approximately $50 million in refunds across the enterprise. We already have submitted for approximately $25 million in refunds that could benefit the second quarter, the tariff refunds are not reflected in the outlook that Brian will share in a moment.”

asked by Anthony Pettinari · answered by Todd Fister

Can you quantify the 'very good' price realization in Roofing, and what is the perception of channel inventory levels after the Q1 pre-buy?

Price realization on the April increase is 'very good,' better than historical, and similar strong realization is expected for the June increase. The Q1 restocking moved a couple of percent of industry volume. The full year is expected to be an average year for Roofing, with H1 volumes likely down YoY and H2 volumes up YoY.

“On the price realization, I continue to say we're seeing very good realization. So I'd say we don't ever cut those down in terms of exact amounts, but a little better than historical, I would say.”

asked by Mike Dahl · answered by Brian Chambers

What is the underlying organic volume trend in Doors, and is the market nearing a bottom or are more headwinds expected for the rest of the year?

Doors volumes were stable in Q1 versus Q4, with the order book accelerating. The company is seeing benefits from its integrated commercial playbook and self-help initiatives. The market is stabilizing, and new construction is expected to be solid, positioning the business for sequential margin improvement and upside as market dynamics improve.

“So I think we feel good that we're able to go out and generate some incremental volume for our business relative to this integrated commercial playbook, we're we're going to market with.”

asked by Collin Verron · answered by Brian Chambers