Allegion Raises 2026 Revenue Outlook to 6%-8% on DCI Acquisition
Allegion raised its annual revenue outlook by 200 basis points to 6%-8% after acquiring DCI to boost West Coast service and reduce costs. The company plans pricing surcharges and cost actions to offset a 1% COGS headwind and forecast margin expansion in the back half of the year.
1. Strong Demand and Revenue Guidance
John Stone noted broad-based strong spec activity in non-residential Americas and no elongation from spec to order, supporting a raised annual revenue outlook to 6%-8% driven by organic growth and strategic acquisitions.
2. DCI Acquisition Enhances Competitiveness
The acquisition of DCI is expected to strengthen service capabilities on the West Coast, reduce operating costs and contribute to the upward revision of full-year revenue projections by approximately 200 basis points.
3. Mitigating 1% COGS Headwind
To neutralize a 1% cost-of-goods-sold increase from tariffs and inflation, the company plans to implement surcharges or list price increases alongside cost actions, targeting neutral impact on adjusted operating income and EPS.
4. ERP Disruption and International Recovery
An ERP implementation in a European mechanical business led to organic revenue and margin declines in Q1; improved production rates, existing orders and backlog are expected to drive full-year recovery.