Fiscal 2027 first quarter
Filed Oct 6, 2026Record first-quarter sales of $2.22 billion increased 4.8% compared to the prior year; record adjusted diluted EPS of $1.98 increased 5.3% and record adjusted EBITDA of $405.5 million increased 4.5% compared to the prior year.
Sales, adjusted EBITDA and adjusted diluted EPS reached records, supported by PCG and Consumer growth, acquisitions, pricing and MAP actions. The result was tempered by CPG's 1.7% organic sales decline and 9.7% adjusted EBITDA decline, while the full-year adjusted EBITDA outlook moved from 5% to 10% growth to the mid-single-digit range.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net Sales (three months ended August 31, 2026, in thousands)GAAP | $2.22B | – | 4.8 % |
| Cost of Sales (three months ended August 31, 2026, in thousands)GAAP | 1.30B | – | – |
| Gross Profit (three months ended August 31, 2026, in thousands)GAAP | 914.0M | – | – |
| Selling, General & Administrative Expenses (three months ended August 31, 2026, in thousands)GAAP | 559.8M | – | – |
| Restructuring Expense (three months ended August 31, 2026, in thousands)GAAP | 5.16M | – | – |
| Interest Expense (three months ended August 31, 2026, in thousands)GAAP | 25.54M | – | – |
| Investment (Income), Net (three months ended August 31, 2026, in thousands)GAAP | −7.52M | – | – |
| Other (Income), Net (three months ended August 31, 2026, in thousands)GAAP | −6.03M | – | – |
| Income Before Income Taxes (three months ended August 31, 2026, in thousands)GAAP | 337.1M | – | 13.1 % |
| Provision for Income Taxes (three months ended August 31, 2026, in thousands)GAAP | 80.43M | – | – |
| Net Income (three months ended August 31, 2026, in thousands)GAAP | 256.6M | – | – |
| Net Income Attributable to RPM International Inc. Stockholders (three months ended August 31, 2026, in thousands)GAAP | $256.4M | – | 12.6 % |
| Basic EPS (three months ended August 31, 2026)GAAP | $ 2.02 | – | – |
| Diluted EPS (three months ended August 31, 2026)GAAP | $ 2.01 | – | 13.6 % |
| Adjusted EBIT, total consolidated (three months ended August 31, 2026, in thousands)non-GAAP | 352.7M | – | – |
| Adjusted EBITDA, total consolidated (three months ended August 31, 2026, in thousands)non-GAAP | $405.5M | – | 4.5 % |
| Adjusted Diluted EPS (three months ended August 31, 2026)non-GAAP | $ 1.98 | – | 5.3 % |
| CPG Segment Income Before Income Taxes (three months ended August 31, 2026, in thousands)GAAP | $149.1M | – | (6.3 %) |
| CPG Segment Adjusted EBITDA (three months ended August 31, 2026, in thousands)non-GAAP | $166.2M | – | (9.7 %) |
| PCG Segment Income Before Income Taxes (three months ended August 31, 2026, in thousands)GAAP | $107.3M | – | 23.6 % |
| PCG Segment Adjusted EBITDA (three months ended August 31, 2026, in thousands)non-GAAP | $121.1M | – | 18.2 % |
| Consumer Segment Income Before Income Taxes (three months ended August 31, 2026, in thousands)GAAP | $132.3M | – | 21.5 % |
| Consumer Segment Adjusted EBITDA (three months ended August 31, 2026, in thousands)non-GAAP | $146.6M | – | 5.5 % |
| Cash Provided By Operating Activities (three months ended August 31, 2026, in thousands)GAAP | 263.9M | – | – |
| Capital expenditures (three months ended August 31, 2026, in thousands)other | −58.51M | – | – |
| Cash dividends (three months ended August 31, 2026, in thousands)other | −68.07M | – | – |
| Repurchases of common stock (three months ended August 31, 2026, in thousands)other | −22.39M | – | – |
| Cash and cash equivalents (August 31, 2026, in thousands)GAAP | $312.8M | – | – |
| Total debt (August 31, 2026)other | $2.41B | – | – |
| Total liquidity (August 31, 2026)other | $1.21B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Construction Products GroupLower than expected sales growth reflected delayed sales from a slowdown in healthcare and education markets and supplier raw material availability issues. The Kalzip acquisition and pricing actions in response to inflation offset these headwinds. Sales included a 1.7% organic decline and 2.5% growth from acquisitions net of divestitures. | $859.2M | – | 0.8 % |
| Performance Coatings GroupRecord sales reflected broad-based growth, particularly engineered solutions for high-performance buildings, energy and infrastructure projects including in emerging markets, food coatings and ingredients, and pricing to offset inflation. Sales included 7.9% organic growth, a 1.8% increase from acquisitions, and a 0.5% benefit from foreign currency translation. | $629.6M | – | 10.2 % |
| Consumer GroupRecord sales reflected growth across all businesses, shelf space wins, new product introductions and pricing to offset inflation. Sales included 5.2% organic growth, 0.3% growth from acquisitions, and a 0.2% headwind from foreign currency translation. | $726.7M | – | 5.3 % |
Fiscal 2027 second quarter and fiscal 2027 full year outlook
- NoteFiscal 2027 second quarter consolidated sales to increase in the low- to mid-single-digit range compared to prior-year results.
- NoteFiscal 2027 second quarter CPG sales to increase in the low-single-digit range compared to prior-year results.
- NoteFiscal 2027 second quarter PCG sales to increase in the mid- to high-single-digit range compared to prior-year results.
- NoteFiscal 2027 second quarter Consumer Group sales to increase in the low- to mid-single-digit range compared to prior-year results.
- NoteFiscal 2027 second quarter consolidated adjusted EBITDA to increase in the low- to mid-single-digit range compared to prior-year results.
- NoteFiscal 2027 consolidated sales to increase in the mid-single-digit range compared to prior-year record results. The previous outlook was for 3% to 7% growth.
- NoteFiscal 2027 consolidated adjusted EBITDA to increase in the mid-single-digit range compared to prior-year record results. The previous outlook was for 5% to 10% growth.
Capital returns
- The company returned $90.5 million to stockholders through cash dividends and share repurchases, an increase of 10.2% compared to the prior year.
- Cash dividends were $68.1 million.
- Repurchases of common stock were $22.4 million.
What drove it
- Consolidated sales included 3.1% organic growth, 1.6% growth from acquisitions net of divestitures, and a 0.1% tailwind from foreign currency translation.
- Emerging-market regions generated revenue increases above 20%, supported by demand for engineered solutions used in high-performance buildings and infrastructure projects and expansion of the Platform model.
- Adjusted EBITDA benefited from higher sales, MAP operational improvement initiatives including SG&A optimization, and lower healthcare expenses from prescription-drug procurement efforts.
- PCG adjusted EBITDA benefited from sales, volume-driven fixed-cost leverage and SG&A-focused optimization actions.
- Consumer adjusted EBITDA benefited from sales growth, improved fixed-cost utilization and MAP operational improvements.
Concerns
- CPG sales growth was lower than expected because of delayed sales related to healthcare and education market softness and supplier raw material availability issues.
- CPG adjusted EBITDA declined due to lower fixed-cost absorption, raw material inflation from supply shortages, a $4.4 million increase in bad debt expense related to a customer bankruptcy, and a $6.3 million warranty charge at a small European business under review for closure.
- Higher raw material inflation affected consolidated adjusted EBITDA and is expected to create gross margin pressure in the second quarter.
- Consumer income before taxes included a $10.8 million gain on the sale of a facility closed under MAP 2025, which was excluded from adjusted EBITDA.
- Management expects CPG demand to remain soft in the second quarter.
What to watch
- Whether CPG returns to positive organic growth by the end of the year, as management anticipates.
- The ability of MAP operational improvements and selling price increases to offset persistent inflation, gross margin pressure and start-up costs at new facilities.
- PCG growth from expansion of the Platform emerging-market operating model and end-market demand.
- Consumer Group stabilization and the continuation of shelf-space wins and new product introductions.
- Full-year execution against the mid-single-digit sales and adjusted EBITDA growth outlook following prior outlooks of 3% to 7% sales growth and 5% to 10% adjusted EBITDA growth.
Balance sheet and cash flow
- Cash provided by operating activities was $263.9 million, compared to $237.5 million in the prior-year period, driven by improved working capital efficiency.
- Capital expenditures were $58.5 million compared to $62.5 million in the prior-year period.
- Cash and cash equivalents were $312.8 million as of August 31, 2026, compared to $297.1 million as of August 31, 2025 and $315.2 million as of May 31, 2026.
- Total debt was $2.41 billion compared to $2.67 billion a year ago, with the decrease driven by strong operating cash flow being used to reduce debt.
- Total liquidity, including cash and committed revolving credit facilities, was $1.21 billion, compared to $933.4 million a year ago.
Analysis
RPM opened fiscal 2027 with record first-quarter sales of $2.22 billion, up 4.8%, and record adjusted EBITDA of $405.5 million, up 4.5%. Organic sales growth was 3.1%, while acquisitions net of divestitures added 1.6% and currency translation provided a 0.1% tailwind. GAAP net income attributable to RPM stockholders rose 12.6% to $256.4 million, diluted EPS rose 13.6% to $2.01, and adjusted diluted EPS increased 5.3% to a record $1.98.
The segment mix was uneven. PCG was the principal growth contributor, with sales up 10.2% and adjusted EBITDA up 18.2%, driven by engineered solutions, energy and infrastructure activity, food coatings and ingredients, emerging markets, pricing and fixed-cost leverage. Consumer sales increased 5.3% and adjusted EBITDA increased 5.5%, supported by growth across its businesses, shelf-space wins, product introductions, pricing and SG&A-focused MAP actions. CPG sales increased 0.8%, but organic sales declined 1.7% and adjusted EBITDA fell 9.7% as healthcare and education activity slowed, suppliers constrained product availability, and inflation, bad debt and warranty costs weighed on profit.
Consolidated profitability benefited from higher sales, MAP operational initiatives and lower healthcare expenses, which more than offset raw material inflation, warranty costs and bad debt expense. CPG absorbed a $4.4 million increase in bad debt expense related to a customer bankruptcy and a $6.3 million warranty charge at a European business under review for closure. Consumer income before taxes included a $10.8 million gain from the sale of a MAP 2025-closed facility, and that gain was excluded from adjusted EBITDA.
Cash generation improved. Cash provided by operating activities was $263.9 million, compared with $237.5 million, with management citing improved working capital efficiency. Capital expenditures were $58.5 million, and RPM returned $90.5 million through cash dividends and share repurchases. Total debt was $2.41 billion versus $2.67 billion a year ago, and total liquidity was $1.21 billion versus $933.4 million.
For the second quarter, RPM expects consolidated sales and adjusted EBITDA to increase in the low- to mid-single-digit range, with PCG leading growth, Consumer stabilizing and CPG demand remaining soft. Full-year sales and adjusted EBITDA are both expected to increase in the mid-single-digit range. The full-year sales outlook previously was 3% to 7% growth, while the prior adjusted EBITDA outlook was 5% to 10% growth. Management expects MAP benefits and pricing to offset higher inflation and new-facility start-up costs, and anticipates CPG will return to positive organic growth by the end of the year.
Management, verbatim
The resilience of our associates and business model was on full display in the first quarter as we generated another quarter of record sales and adjusted EBITDA. Solid organic growth in our Performance Coatings Group and Consumer Group, and a focus on manufacturing, procurement and SG&A efficiencies overcame multiple challenges, including raw material inflation and a temporary slowdown in our Construction Products Group.
Frank C. Sullivan, RPM Chairman and CEO
Segment trends in the second quarter are expected to be similar to those in the first with the PCG segment leading growth as it benefits from its success with expanding the Platform emerging-market operating model and good end-market demand. Continued stabilization in the Consumer Group is also anticipated, while CPG demand remains soft.
Frank C. Sullivan, RPM Chairman and CEO
Not in the filing
stated, not guessed- Free cash flow was not reported.
- Gross margin was not reported.
- GAAP operating income was not reported.
- Income tax rate was not reported.
- Operating expense guidance was not reported.
- Gross margin guidance was not reported.
- Tax rate guidance was not reported.
- EPS guidance was not reported.
- Dividend per share was not reported.
- A previous release's outlook was not provided, so no reported actual-versus-prior-guidance comparison is available.
AlphAI 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.