RPM Posts Record $2.22 Billion Fiscal Q1 Sales, Narrows FY2027 Outlook

RPM International reported record fiscal first-quarter sales of $2.22 billion and lifted profit again as its Performance Coatings and Consumer businesses offset a softer quarter in Construction Products. The coatings and building materials group also updated its full-year view, saying it now expects both sales and adjusted EBITDA to rise in the mid-single-digit range in fiscal 2027.

That full-year outlook is narrower than the range RPM gave in July, when it projected sales growth of 3% to 7% and adjusted EBITDA growth of 5% to 10%. For the fiscal second quarter, management said it expects consolidated sales and adjusted EBITDA to increase in the low- to mid-single-digit range from a year earlier.

RPM set out the figures in its quarterly results materials for the three months ended August 31, 2026. The company said net income attributable to stockholders rose 12.6% to $256.4 million, while diluted earnings per share increased to $2.01 from $1.77. Adjusted diluted EPS rose 5.3% to a record $1.98 and adjusted EBITDA increased 4.5% to a record $405.5 million.

Performance Coatings and Consumer drove most of the growth

Sales growth was not especially broad-based, which matters for how investors read the quarter. Consolidated revenue increased 4.8%, but RPM said the main engines were its Performance Coatings Group, where sales climbed 10.2% to $629.7 million, and its Consumer Group, where sales rose 5.3% to $726.7 million. Construction Products Group sales, by contrast, edged up only 0.8% to $859.2 million.

At the consolidated level, RPM said 3.1 percentage points of the sales increase came from organic growth, 1.6 points came from acquisitions net of divestitures and 0.1 points came from foreign currency translation. The company said all emerging-market regions posted revenue increases above 20%, helped by demand for engineered solutions used in high-performance buildings and infrastructure projects, as well as the expansion of RPM’s regional platform model.

The strongest operating improvement came from Performance Coatings. Adjusted EBITDA there rose 18.2% to $121.1 million as higher volumes improved fixed-cost leverage and SG&A optimization added support. RPM also pointed to demand in engineered solutions for high-performance buildings, energy and infrastructure projects, along with growth in food coatings and ingredients.

Consumer also turned in a solid quarter. RPM said shelf-space gains, new product introductions and pricing supported revenue, while adjusted EBITDA rose 5.5% to $146.6 million. Income before taxes in that segment benefited from a $10.8 million gain on the sale of a facility previously closed under the MAP 2025 program, though the gain was excluded from adjusted EBITDA.

The weak spot was Construction Products. RPM said delayed demand in healthcare and education, along with raw-material availability issues, held back volume growth. Although pricing and the Kalzip acquisition helped offset part of the pressure, adjusted EBITDA in the segment fell 9.7% to $166.2 million. The company also cited a $4.4 million increase in bad-debt expense linked to a customer bankruptcy and a $6.3 million warranty charge at a small European business under review for closure.

Cash flow improved and debt moved lower

The quarter was not only about income-statement gains. RPM said cash provided by operating activities increased to $263.9 million from $237.5 million a year earlier, which management attributed to better working capital efficiency. Capital expenditures were $58.5 million, down from $62.5 million in the prior-year period.

That stronger cash generation helped the company keep returning capital to shareholders while still reducing leverage. RPM said it returned $90.5 million through dividends and share repurchases during the quarter, up 10.2% from a year earlier. Total debt at August 31 stood at $2.41 billion, down from $2.67 billion a year earlier, while total liquidity improved to $1.21 billion from $933.4 million.

RPM also flagged a reporting change that affects comparability within its segment data. Effective June 1, the company moved certain Latin American businesses that generate about $143 million of annual revenue into the Performance Coatings Group from the Construction Products and Consumer segments. RPM said the change has no effect on consolidated results and that prior-period quarterly figures have been recast to reflect the new structure.

Another piece of background is the recently completed Volteco acquisition. RPM closed that deal on October 1 and said the Italy-based supplier of below-grade waterproofing products will sit within Construction Products. In the near term, though, the October 6 earnings update suggests investors are more focused on whether RPM can restore better organic momentum in that segment before fiscal year-end.

Guidance now points to steadier, not faster, full-year growth

RPM’s updated outlook was constructive, but it also signaled a more centered view of the year. For the fiscal second quarter, the company said it expects Construction Products sales to rise in the low-single-digit range, Performance Coatings sales to increase in the mid- to high-single-digit range and Consumer sales to improve in the low- to mid-single-digit range. Consolidated adjusted EBITDA is also expected to rise in the low- to mid-single-digit range.

For the full fiscal year, RPM now expects consolidated sales and adjusted EBITDA to increase in the mid-single-digit range. That narrows the broader ranges it gave with fourth-quarter results in July. Management said it still expects benefits from MAP operational improvements and selling-price increases to help offset inflation and start-up costs at new facilities, while Construction Products is expected to return to positive organic growth by the end of the year.

Chief Executive Frank Sullivan said segment trends in the second quarter should look similar to those in the first, with Performance Coatings leading growth and Consumer continuing to stabilize while Construction Products remains soft. That leaves the market with a clear near-term test for RPM: whether margin discipline and cash generation can continue to outweigh weaker demand pockets until Construction Products improves.

The company is due to host an investor day on November 9 at its Stonhard facility in New Jersey, where management is expected to provide an updated view of strategic priorities and operating improvement plans. Until then, the first-quarter report points to a business that is still producing record top-line and adjusted profit figures, but doing so with a more uneven segment mix than the headline numbers alone suggest.