Donaldson Q2 Sales Rise 3% to $896M, Margin Falls 150bps and Acquires Facet
Donaldson reported Q2 fiscal 2026 sales of $896 million, up 3%, with Mobile Solutions sales up 2% and Life Sciences up 16%, while gross margin slipped 150 basis points to 33.7%. The company reaffirmed $3.8 billion sales guidance, raised growth outlooks and will close its $110 million Facet acquisition soon.
1. Q2 Financial Highlights
Donaldson delivered record Q2 fiscal 2026 sales of $896 million, a 3% year-over-year increase. Adjusted earnings per share remained flat at $0.83, while gross margin declined 150 basis points to 33.7% and operating margin fell to 14.0%.
2. Segment Performance
Mobile Solutions sales reached $557 million, up 2% driven by currency benefits, with aftermarket up 1% and off-road first-fit sales rising 8%. Industrial Solutions sales grew 2% to $260 million, led by a 7% gain in IFS, while Aerospace and Defense fell 19%. Life Sciences surged 16% to $80 million on food, beverage and disk drive demand.
3. Facet Acquisition Details
Donaldson announced its largest deal ever, acquiring Facet for approximately $110 million. The transaction adds high-margin, recurring replacement part revenues and will raise net leverage from 0.7x to about 1.7x. Closing is expected in the coming quarters with rapid earnings accretion targeted.
4. Updated Guidance and Outlook
The company reaffirmed full-year sales growth of 1% to 5% for about $3.8 billion, raised Mobile Solutions outlook to 2%–6% growth and Life Sciences to 5%–9%, while Industrial Solutions is guided to down 1% to up 3%. Full-year operating margin is forecast at 16.0%–16.4% with EPS of $3.93–$4.01.