RPM International achieved record quarterly sales in QQ2 2026, driven by acquisitions and engineered solutions for high-performance buildings, totaling revenue of $1.9099 billion and a gross margin of 40.85%. However, the quarter featured margin compression as SG&A investments, M&A deal costs, and footprint consolidations outweighed top-line strength, resulting in a decline in adjusted EBIT and earnings per share (EPS). Management signaled a decisive strategic program to restore margin trajectory through MAP 3.0 SG&A optimization, with an estimated annual benefit of $100 million and staged realizations: $5 million already in Q3, $20 million in Q4, and the remaining $75 million in fiscal 2027, while costs to implement will be disclosed in the next earnings call (April). The company also accelerated growth investments in high-performance buildings, business intelligence, and innovation and announced the Kalzip acquisition to strengthen its system offering in building envelopes.
Management remains optimistic about RPM’s ability to outgrow underlying markets, supported by a robust backlog in Construction Products Group (CPG) and broad-based growth in Performance Coatings Group (PCG) and Consumer segments, albeit tempered by macro headwinds from government spending, DIY demand softness, and longer project lead times. The balance sheet remains strong, with ample liquidity and a disciplined capital allocation framework, including ongoing buybacks, dividends (52nd consecutive year of dividend increases), and acquisitions supported by operating cash flow. Looking ahead, QQ3 guidance contemplates mid-single-digit revenue growth and mid-to-high single-digit EBIT growth, while QQ4 targets mid-single-digit top-line expansion and low-to-high single-digit EBIT growth, with volume as the primary driver. The Kalzip close is anticipated in fiscal Q4 2026, expanding RPM’s metal roofing capabilities and international reach.