RPM International Inc. reported record second-quarter sales of $1.91 billion, marking a 3.5% increase compared to the previous year.
The second-quarter net income was $161.2 million with diluted EPS of $1.26 and EBIT of $229.0 million.
Adjusted diluted EPS for the quarter saw a decline of 13.7% compared to the prior year, totaling $1.20, and adjusted EBIT was $226.6 million, indicating an 11.2% decrease.
SG&A-Focused Optimization Actions
RPM is implementing optimization actions to generate $100 million in annual benefits, with incremental savings expected in different fiscal quarters.
Sales Growth Outlook
The company's third-quarter outlook includes mid-single-digit sales growth and adjusted EBIT improvement, with similar expectations for the fourth quarter.
Market Comments
Prolonged government shutdown impacted sales growth, leading to negative consumer sentiment and declining earnings in the quarter.
- Sales growth driven by acquisitions and high-performance building solutions, partially offset by soft DIY demand.
- Adjusted EBIT declined due to growth investments, lower volumes, and temporary inefficiencies from facility consolidations.
- Adjusted diluted EPS decline attributed to lower adjusted EBIT and increased interest expenses from financing acquisitions.
Despite challenges from market conditions and lower demand environment, RPM International Inc. remains focused on cost optimization and growth investments to navigate through the current landscape.