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RPM Tops Fourth-Quarter Views, Sees Continued Growth Despite Inflationary Pressures

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RPM Tops Fourth-Quarter Views, Sees Continued Growth Despite Inflationary Pressures

RPM International (RPM) reported higher-than-expected fourth-quarter results on Wednesday and projected continued sales growth for fiscal 2027 despite inflationary pressure stemming from events in the Middle East.

Adjusted per-share earnings rose to $1.89 in the three-month period ended May 31 from $1.72 a year earlier, topping the FactSet-polled consensus of $1.83. Sales grew 7.2% to a record $2.23 billion, while analysts expected $2.18 billion.

The specialty coatings manufacturer's fiscal 2026 sales grew 6.7% annually to $7.86 billion, compared with the Street's forecasts of $7.81 billion.

For fiscal 2027, RPM expects growth of 3% to 7% from the previous year, with first-quarter revenue projected to rise in the mid-single-digit range. The Street is looking for sales of $8.23 billion for the current fiscal year and $2.21 billion for the ongoing quarter.

"We expect the positive momentum generated in the second half of fiscal 2026 to continue in fiscal 2027, even as we face higher inflationary pressure resulting from events in the Middle East," Chief Executive Frank Sullivan said in a statement. "Strength in engineered solutions for high-performance buildings and infrastructure projects is anticipated to continue, and our consumer segment is showing signs of stabilization after a prolonged downturn."

Crude prices plunged in May and June, but have rallied this month as tensions between the US and Iran intensified.

The stock increased 4% in Wednesday trade, bringing its year-to-date gain to 1.5%. RPM is the parent of brands including Varathane, which offers wood-finishing products.

By segment, fourth-quarter sales in the construction products group climbed 8.8% year over year to $904.2 million, led by the concrete admixtures business.

Consumer revenue grew 7% to $764.8 million, driven by acquisitions and pricing. The performance coatings segment delivered 5% sales growth to $562.8 million.

RPM said its board approved a $700 million increase to its share buyback program, with $114.8 million remaining under the previously-authorized program.

Price: $105.30, Change: $+3.77, Percent Change: +3.71%

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