Skip to content
    RPM
    Earnings call· May 2026(Q4 FY26)

    RPM INTERNATIONAL INC/DE/ RPM

    Jul 22, 2026 Source

    Executive summary

    RPM International Q4 FY26 — Record EBIT and Sales Driven by Construction and Performance Coatings

    RPM International delivered record Q4 FY26 results, driven by strong performance in its Construction Products and Performance Coatings segments, leveraging system selling and operational efficiencies. Despite ongoing raw material inflation and soft DIY markets impacting the Consumer segment, the company expects continued sales and earnings growth into FY27, supported by strategic initiatives and a focus on what is within its control amidst a volatile geopolitical and economic landscape.

    Highlights

    5

    • Record consolidated sales increased 7.2%.

    • Record adjusted EBIT achieved, marking the 16th record quarter out of the last 18.

    • Operating cash flow generated $899 million for FY26, the second highest in company history.

    • Construction Products Group and Performance Coatings Group led growth with broad-based strength.

    • SG&A-focused optimization actions on track to deliver $75 million savings in FY27.

    Concerns

    4

    • Raw material inflation anticipated to be up 5% to 6% in Q1 FY27 and 6% to 8% in Q2 FY27.

    • Consumer segment continued to face challenging DIY markets, with unit volume down low single digits in Q4 FY26.

    • Temporary cost headwinds from plant consolidations in FY26 totaled $20 million.

    • Propylene oxide and MDI supplies are tight due to supplier issues, adding to inflation.

    Guidance & targets

    8
    CategoryTargetConfidence
    Q1 FY27 Sales Growth
    mid-single-digit range
    high materiality
    High
    Q1 FY27 Raw Material Inflation
    5% to 6%
    high materiality
    High
    Q1 FY27 Adjusted EBITDA Growth
    mid-single-digit range
    high materiality
    High
    Q2 FY27 Raw Material Inflation
    6% to 8%
    high materiality
    Medium
    FY27 Sales Growth
    3% to 7%
    high materiality
    Medium
    FY27 Adjusted EBITDA Growth
    5% to 10%
    high materiality
    Medium
    FY27 SG&A Optimization Benefits
    $75 million
    medium materiality
    High
    FY27 Capital Expenditures
    $220 million to $240 million
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Construction Products Group
    Sales grew to a record, driven by broad-based strength, particularly in concrete admixtures. Growth was strongest in roofing and wall systems for high-performance buildings like data centers and infrastructure projects. Pricing and foreign currency translation also contributed. Volume growth and operational efficiencies leveraged fixed costs, driving record adjusted EBIT.
    Broad-based strength: led by concrete admixtures businessGrowth strongest for: roofing and wall systems for high-performance buildings (data centers, infrastructure projects)
    		Record——Record adjusted EBIT
    Performance Coatings Group
    Achieved record sales with broad-based growth, highest in solutions for infrastructure projects, food coatings, emerging markets, and fireproofing systems. Pricing contributed to sales growth. Record adjusted EBIT was driven by higher sales, volume growth, and SG&A-focused optimization actions, partially offset by a $3.2 million bad debt expense from a customer bankruptcy.
    Broad-based growth across businessesGrowth highest in: solutions for infrastructure projects, food coatings and ingredients, emerging markets, fireproofing systems for high-performance buildings
    		Record——Record adjusted EBIT
    Consumer Group
    Record sales were driven by acquisitions and pricing, despite soft DIY end markets. Adjusted EBIT grew as MAP operational improvements and SG&A-focused optimization actions more than offset reduced fixed cost absorption from lower volumes and inflation. M&A integration also added to adjusted EBIT growth. Excludes a $9.7 million noncash impairment charge related to the Color Group.
    Sales driven by: acquisitions and pricing to offset inflationDIY end markets: remain softUnit volume growth: down low single digits (Q4 FY26)
    		Record——Adjusted EBIT grew
    International Regions
    All international regions generated double-digit growth, led by emerging markets, through a collaborative platform approach selling engineered solutions. Sales in North America were up a solid 5%, driven by turnkey solutions. Growth in Europe was driven by M&A, and foreign currency translation contributed to sales outside the U.S.
    Led by: emerging marketsSales in North America: up 5%
    		—double-digit growth——

    Operational metrics

    19
    Share Repurchases
    $349 millionup over 7% from prior year
    FY26

    Total amount returned to shareholders through dividends and share repurchases.

    Share Repurchase Authorization
    $700 million increasein addition to $115 million remaining
    Q4 FY26

    Board authorized increase, allowing for more opportunistic repurchases.

    Capital Expenditures
    $224 millionslightly below prior year
    FY26

    Included targeted growth investments like the shared European distribution center and a new operating facility in India.

    Acquisition Spend
    $202 million
    FY26

    Used to acquire multiple businesses, focusing on adjacent consumer categories and components for system offerings.

    Cash and Equivalents
    $1.09 billionremained strong
    Q4 FY26

    Provides financial flexibility for capital deployment, including acquisitions.

    SG&A Optimization Savings
    $75 million
    FY27

    On track to be delivered from actions implemented last fiscal year, considered a down payment on MAP 3.0.

    Green Belt Program Savings Pipeline
    $30 million
    Ongoing

    Pipeline of additional savings identified by 620 trained RPM associates, expanding to administrative functions.

    Plant Consolidation Headwinds
    $20 million
    FY26

    Inefficiencies from plant consolidations impacted FY26 results.

    Plant Consolidation Headwinds
    approximately $10 million to $12 millionabout half of FY26
    FY27

    Expected P&L headwind in FY27 from plant startups, diminishing in the second half of the year.

    Price Increase
    2%
    Q4 FY26

    Price was up about 2% in the quarter, contributing to sales growth.

    Consumer Unit Volume Growth
    down low single digits
    Q4 FY26

    Despite positive sales growth in the Consumer segment due to acquisitions and price, unit volume was challenged by weak consumer takeaway.

    Sales Growth
    mid-teensyear-over-year
    Q4 FY26

    Achieved despite severe supply chain disruptions, by finding alternative raw material sources and navigating logistical challenges.

    Historical Share Repurchase Rate
    $12.5 millionper quarter
    Historical

    Programmatic share repurchase rate for a period.

    Historical Share Repurchase Rate
    $17.5 millionper quarter for a couple of years
    Historical

    Stepped-up programmatic share repurchase rate for a period.

    Tremco Roofing Restoration/Reroofing Share
    95%
    Ongoing

    Percentage of Tremco Roofing business focused on restoration and reroofing.

    EBIT Margin
    13%
    FY26

    Current operating margin clip for the fiscal year.

    Prepaid Expenses
    $423 millionup about $100 million year-over-year
    Q4 FY26

    Includes different income tax accounts, marketable securities, and assets held for sale, which can be volatile.

    Accounts Payable Increase
    $180 millionsequentially
    Q4 FY26

    Unusual sequential increase, but management expects continued progress in accounts payable due to central procurement team's negotiation of better terms and use of supply chain finance.

    Wage/Salary/Benefits Inflation
    3% to 4%down from FY26, but still up
    FY27

    Anticipated inflation rate for wages, salaries, and benefits in the upcoming fiscal year.

    Industry KPIs

    2
    MetricValueDetails
    Volume vs price split2%%
    Productivity cost savings program$75 millionUSD

    Deals & partnerships

    1
    CPG KalzipMetal roofing and facades company

    Closed in the fourth quarter, expected to be integrated over the next couple of years.

    Capital programs

    3
    Shared European Distribution Centerunderway

    Targeted growth investment, expected to be opening and getting up and running, contributing to efficiency benefits in H2 FY27.

    New Operating Facility in Indiacompleting

    Benefit: generate a lot of growth for RPM

    Targeted growth investment, will be used to produce products for several RPM businesses in one of the highest growth regions.

    Nudura Production in the U.K.underway

    Capital allocated for producing Nudura in the U.K.

    Risks & headwinds

    7
    Raw material inflationQ1 and Q2 FY27

    5% to 6% in Q1 FY27; 6% to 8% in Q2 FY27

    Mitigation: Implementing price increases to offset dollar impact; additional price increases to recover gross margin percentage.

    Challenging DIY marketsOngoing

    Consumer unit volume down low single digits in Q4 FY26

    Mitigation: Anticipating stabilization and easier comparisons in FY27; MAP operational improvements and M&A integration.

    Tightness in propylene oxide and MDI suppliesOngoing

    Adds to overall inflation

    Mitigation: Procurement team finding additional sources of supply to limit impact.

    Broader geopolitical and economic uncertainty, tariff warsFY27

    Anticipated to create another volatile year; potential for increased packaging costs (steel).

    Mitigation: Focusing on factors within control, adapting quickly to changes, leveraging competitive strengths.

    Temporary cost headwinds from plant consolidations and start-up costsFY27, diminishing in H2

    $20 million in FY26; approximately $10 million to $12 million in FY27

    Mitigation: Benefits from new joint distribution centers in Europe and completion of plant closures will provide positive impact in H2 FY27.

    Bad debt expense from customer bankruptcyQ4 FY26

    $3.2 million

    Noncash impairment charge related to the Color GroupQ4 FY26

    $9.7 million

    What to watch in Q1 FY27

    5

    Raw Material Inflation Trajectory

    H2 FY27
    Current5% to 6% in Q1 FY27; 6% to 8% in Q2 FY27
    TargetModeration in H2 FY27

    Why it matters

    Inflationary pressures are a key determinant of gross margin and profitability, and the timing of📎 their moderation is critical for margin recovery.

    Assuming current raw material costs remain stable, the rate of inflation will be highest in the first half of the year as the impact of the Iran conflict will have a greater effect on the P&L. From a gross margin perspective, we expect price cost to be somewhat negative in the first half of the year and then become more neutral in the back half as additional price increases are implemented and cost inflation moderated.

    Q&A highlights

    6

    How sustainable is the strength in CPG and PCG, particularly from data centers, through FY27, and what is the visibility?

    Backlogs remain strong, but the company anticipates continued volatility in FY27 due to geopolitical and tariff-related issues, similar to FY26. Despite this, RPM has proven its ability to perform well.

    “Backlogs remain strong across both CPG and PCG. But we had it, as you'll recall, in fiscal '26 a pretty motile year as did everybody. And unfortunately, given the [ honor gain-off again ] situation in the Middle East, the fact that we're going to restart the tariff wars, in fact, have already started and anticipate some more tariff activity at the end of this week. Our guess is it's going to be another [indiscernible] volatile year.”

    asked by John McNulty · answered by Frank Sullivan

    2 min read6 chapters

    Detailed Narrative

    01

    Operational Excellence and MAP 3.0

    RPM continues to make significant progress on operational improvements, with SG&A-focused actions from the prior fiscal year on track to deliver $75 million in savings in FY27. The Green Belt program has trained 620 associates, developing a pipeline of over $30 million in additional savings, and is now expanding to administrative functions. The company plans to provide a strategy update and additional details on its next operating improvement plan, MAP 3.0, at an Investor Day on November 9.

    02

    Cash Flow Generation and Capital Allocation

    Thanks to four consecutive years of record adjusted EBIT and structural improvements in working capital efficiency, RPM has increased its average annual operating cash flow by nearly 90%. In FY26, operating cash flow reached $899 million. This strong cash generation supports strategic acquisitions, organic growth investments, and capital returns to shareholders, including $349 million in dividends and share repurchases in FY26. The Board recently authorized a $700 million increase to the share repurchase program, adding to the $115 million remaining.

    03

    Raw Material and Pricing Dynamics

    While spot prices have declined from their peak, RPM anticipates raw material inflation of 5% to 6% in Q1 FY27 and 6% to 8% in Q2 FY27. The company has implemented price increases to offset this inflation on a dollar basis and expects to recover gross margin percentage lost in Q1 as the fiscal year progresses. Supply availability has improved, but tightness in propylene oxide and MDI due to supplier issues is adding to overall inflation.

    04

    System Selling and High-Performance Buildings

    RPM's engineered systems for high-performance buildings have been a key driver of outgrowing end markets. Through strategic M&A and innovation, the company offers system solutions for all six sides of a building, providing guaranteed performance, streamlined procurement, and reduced construction time. This approach increases RPM product penetration in projects and offers a competitive advantage, particularly in high-growth areas like data centers and infrastructure.

    05

    Emerging Markets Growth Strategy

    International regions, particularly emerging markets, generated double-digit growth in Q4 FY26, driven by a collaborative platform approach. This strategy, which reorganizes developing world operations under a unified leadership (e.g., Grant Boonzaier's team for Middle East, Africa, India, Southeast Asia), focuses on driving growth and improving margins by leveraging RPM's diverse product portfolio and expertise. The company expects to expand this platform approach and aims for over $1 billion in sales from the developing world.

    06

    Consumer Segment Challenges and Outlook

    The Consumer Group faced soft DIY end markets, with unit volumes down low single digits in Q4 FY26, despite record sales driven by acquisitions and pricing. While the segment benefited from MAP operational improvements and M&A integration, reduced fixed cost absorption from lower volumes impacted profitability. Management anticipates stabilization in DIY markets and easier comparisons in FY27, positioning the segment for improved results if unit volume growth returns.

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