Earnings exceed expectations as outlook disappoints investors
RPM International Inc. (NYSE:RPM) reported stronger-than-expected fourth-quarter 2026 results on Wednesday, but its fiscal 2027 outlook failed to impress investors, sending shares modestly lower in premarket trading.
The specialty coatings and building materials manufacturer posted adjusted earnings per share of $1.89, exceeding the analyst consensus estimate of $1.84.
Revenue reached a record $2.23 billion, ahead of market expectations of $2.18 billion and up 7.2% from $2.08 billion in the same period last year.
Despite the earnings beat, RPM shares slipped 0.30% in premarket trading after management issued guidance that fell short of market expectations.
Organic growth and acquisitions lift sales
The company’s revenue growth was supported by several factors, including 2.5% organic growth, a 3.5% contribution from acquisitions and a 1.2% benefit from favourable foreign currency translation.
For fiscal 2027, RPM expects total sales to increase between 3% and 7%, implying midpoint growth of 5%.
The company also forecasts adjusted EBITDA growth of between 5% and 10% for the full year, with a midpoint of 7.5%.
During the first quarter of fiscal 2027, management expects both sales and adjusted EBITDA to increase at a mid-single-digit percentage rate.
RPM said it has adopted adjusted EBITDA as its primary profitability metric, replacing adjusted EBIT to better align its reporting with industry peers.
“Once again, our associates achieved record results for the quarter and full year during a volatile economic period,” said Frank C. Sullivan, RPM chairman and CEO.
“In the fourth quarter, we generated strong sales, including volume growth, by focusing on our restoration and maintenance solutions, nimbly targeting growing end markets, and winning a higher share of construction project spending through system sales and increased collaboration,” he said.
Record profitability continues
Adjusted EBIT reached a record $338.6 million during the fourth quarter, an increase of 7.7% from the previous year.
Higher sales, improved operating leverage from stronger volumes and benefits from the company’s MAP operational improvement programme helped offset higher healthcare, insurance and inflation-related costs.
For the full fiscal year 2026, RPM reported record revenue of $7.86 billion, representing growth of 6.7% from the prior year.
Adjusted diluted earnings per share also reached a record $5.53, an increase of 4.3% year over year.
Share buyback programme expanded
RPM’s Board of Directors approved a $700 million increase to the company’s share repurchase programme, raising the total remaining authorisation to $814.8 million.
The company also announced plans to host an investor day on November 9, 2026, where management will present its next operational improvement strategy.