fiscal 2026 third quarter
Filed Aug 5, 2026Fiscal 2026 third-quarter revenue increased 7% to $481.4 million, while adjusted EBITDA from continuing operations increased 2% to $124.8 million and the Company completed strategic joint ventures for its AMES businesses.
Revenue growth was supported by favorable price and mix and higher residential volume, adjusted income from continuing operations increased, and leverage declined to 2.2x net debt to EBITDA. Adjusted EBITDA growth trailed revenue growth as material and selling, general and administrative costs increased.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $481,370 (in thousands) | – | 7% increase |
| Cost of goods and servicesGAAP | 255,316 (in thousands) | – | – |
| Gross profitGAAP | 226,054 (in thousands) | – | – |
| Selling, general and administrative expensesGAAP | 110,552 (in thousands) | – | – |
| Goodwill and intangible asset impairmentsGAAP | — | – | – |
| Total operating expensesGAAP | 110,552 (in thousands) | – | – |
| Income (loss) from continuing operationsGAAP | 115,502 (in thousands) | – | – |
| Interest expenseGAAP | (21,124) (in thousands) | – | – |
| Interest incomeGAAP | 1,002 (in thousands) | – | – |
| Loss from debt extinguishmentGAAP | (833) (in thousands) | – | – |
| Other, netGAAP | (2,576) (in thousands) | – | – |
| Total other expense, netGAAP | (23,531) (in thousands) | – | – |
| Income (loss) before taxes from continuing operationsGAAP | 91,971 (in thousands) | – | – |
| Provision (benefit) for income taxes from continuing operationsGAAP | 25,660 (in thousands) | – | – |
| Income from continuing operationsGAAP | $66.3 million | – | – |
| Income from continuing operations per shareGAAP | $1.47 per share | – | – |
| Adjusted income from continuing operationsnon-GAAP | $68.0 million | – | – |
| Adjusted income from continuing operations per sharenon-GAAP | $1.51 per share | – | – |
| Adjusted EBITDA from continuing operationsnon-GAAP | $124.8 million | – | 2% increase |
| Effective tax rateGAAP | 27.9% | – | – |
| Adjusted effective tax ratenon-GAAP | 27.9% | – | – |
| Revenue, nine months ended June 30GAAP | $1,357,490 (in thousands) | – | – |
| Gross profit, nine months ended June 30GAAP | 626,776 (in thousands) | – | – |
| Income from continuing operations, nine months ended June 30GAAP | $168,820 (in thousands) | – | – |
| Free cash flow from continuing operations, nine month period ended June 30, 2026non-GAAP | $194.2 million | – | – |
| Capital expenditures, net, nine month period ended June 30, 2026other | $23.7 million | – | – |
fiscal 2026 outlook
- Revenue$1.8 billion
- Tax rate28%
- NoteAdjusted EBITDA: $458 million
- NoteFree cash flow from continuing operations, including capital expenditures of $50 million, is expected to exceed net income from continuing operations
- NoteDepreciation: $27 million
- NoteAmortization: $15 million
- NoteFiscal year 2026 interest expense: $80 million
Capital returns
- During the first nine months, the Company returned $135 million to shareholders through dividends and share repurchases.
- Share repurchases during the quarter ended June 30, 2026 totaled 626 thousand shares of common stock, for a total of $53.2 million, or an average of $85.00 per share.
- As of June 30, 2026, $193.8 million remained under the Board authorized share repurchase program.
- Since April 2023 and through June 30, 2026, the Company purchased 12.1 million shares of common stock or 21.2% of the outstanding shares, for a total of $664.1 million or an average of $54.86 per share.
What drove it
- Third-quarter revenue growth reflected favorable price and mix of 6% driven by both residential and commercial.
- Increased volume of 1% was driven primarily by residential.
- Adjusted EBITDA growth was driven by increased revenue, partially offset by increased material and selling, general and administrative costs.
- The strategic actions announced on February 5, 2026 were substantially complete, and Griffon stated that it is now a pure play building products company.
Concerns
- Adjusted EBITDA from continuing operations increased 2%, compared with a 7% increase in revenue, as increased material and selling, general and administrative costs partially offset revenue growth.
- Fiscal 2026 interest expense is expected to be $80 million, although the Company said this reflects reduced debt and interest income from transaction related notes receivable.
- Total debt outstanding was $1.3 billion and net debt was $1.2 billion as of June 30, 2026.
What to watch
- Execution of fiscal 2026 revenue guidance of $1.8 billion and adjusted EBITDA guidance of $458 million.
- Whether free cash flow from continuing operations exceeds net income from continuing operations, including capital expenditures of $50 million.
- Residential and commercial price, mix, and volume trends.
- The effect of the AMES Australasia and AMES North America joint ventures, including the PIK notes receivable and equity interests.
- Leverage after the quarter-end debt reduction of approximately $137.0 million and future capital returns.
Balance sheet and cash flow
- As of June 30, 2026, cash and equivalents were $110.4 million.
- Total debt outstanding was $1.3 billion, resulting in net debt of $1.2 billion.
- During the quarter, debt was reduced by approximately $137.0 million.
- Leverage was 2.2x net debt to EBITDA as of June 30, 2026, compared to 2.5x as of June 30, 2025 and 2.4x as of September 30, 2025.
- Free cash flow from continuing operations was $194.2 million for the nine month period ended June 30, 2026.
- At June 30, 2026, borrowing availability under the revolving credit facility was $472.3 million, subject to certain loan covenants.
- On July 31, 2026, Griffon received $181 million in cash, a $49 million paid-in-kind note receivable, and a 49% equity interest in the AMES Australasia joint venture.
- On June 9, 2026, Griffon received $100 million in cash, a $161 million second-lien PIK debt receivable, and a 43% equity interest in the AMES North America joint venture.
Analysis
Griffon reported fiscal 2026 third-quarter revenue of $481.4 million, a 7% increase compared to $449.7 million in the prior-year quarter. The Company attributed the gain to favorable price and mix of 6%, driven by both residential and commercial, plus increased volume of 1% driven primarily by residential. Third-quarter gross profit was 226,054 (in thousands), compared with 218,841 (in thousands) in the prior-year quarter, while selling, general and administrative expenses were 110,552 (in thousands), compared with 107,283 (in thousands).
Reported results from continuing operations turned positive following the prior-year impairment charge. Income from continuing operations was $66.3 million, or $1.47 per share, compared with a loss from continuing operations of $108.7 million, or $2.40 per share, in the prior-year quarter. The prior-year quarter included 243,612 (in thousands) of goodwill and intangible asset impairments, while the current-year quarter reported no such charge. Excluding items affecting comparability, adjusted income from continuing operations was $68.0 million, or $1.51 per share, versus $64.5 million, or $1.39 per share.
Adjusted EBITDA from continuing operations was $124.8 million, a 2% increase from $122.3 million. The Company said increased revenue was partially offset by increased material and selling, general and administrative costs. For the nine months ended June 30, revenue was $1,357,490 (in thousands), compared with $1,319,829 (in thousands), while gross profit was 626,776 (in thousands), compared with 628,575 (in thousands). Free cash flow from continuing operations was $194.2 million and capital expenditures, net, were $23.7 million for the nine month period ended June 30, 2026.
Capital allocation included $53.2 million of share repurchases during the quarter, representing 626 thousand shares at an average of $85.00 per share. The Company returned $135 million to shareholders through dividends and share repurchases during the first nine months. Cash and equivalents were $110.4 million, total debt was $1.3 billion, and net debt was $1.2 billion as of June 30, 2026. Leverage declined to 2.2x net debt to EBITDA from 2.5x as of June 30, 2025, following a debt reduction of approximately $137.0 million during the quarter.
The outlook calls for fiscal 2026 revenue from continuing operations of $1.8 billion and adjusted EBITDA of $458 million. Griffon expects free cash flow from continuing operations, including capital expenditures of $50 million, to exceed net income from continuing operations. Interest expense is now expected to be $80 million, and the normalized tax rate is expected to be 28%. The completed AMES Australasia and AMES North America joint ventures mark the strategic shift described by management as establishing Griffon as a pure play building products company.
Management, verbatim
Griffon has executed particularly well this quarter, which is reflected in today's solid operational and financial results.
Ronald J. Kramer, Chairman and CEO of Griffon
With the strategic actions we announced on February 5, 2026 substantially complete, Griffon is now a pure play building products company.
Ronald J. Kramer, Chairman and CEO of Griffon
We will continue to follow our balanced capital allocation strategy to maintain our strong balance sheet while returning value to our shareholders.
Ronald J. Kramer, Chairman and CEO of Griffon
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported quarterly metrics
- Reported gross margin for the third quarter and nine-month period
- Segment revenue and segment profit disclosures
- Quarterly operating cash flow
- Quarterly free cash flow
- Quarterly capital expenditures
- A separately quantified dividend amount
- A numeric fiscal 2026 free cash flow guidance target
- Fiscal 2026 gross margin guidance
- Fiscal 2026 operating expense guidance
- Previous-release outlook for comparison with actual results
- The remainder of the condensed consolidated statements of operations and comprehensive income (loss), which is truncated in the provided filing text
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.