RPM International reported second-quarter revenues of $1.91 billion, representing a 3.5% increase year-over-year, while adjusted diluted EPS of $1.20 fell short of consensus estimates. Adjusted EBIT declined 11.2% to $226.6 million, driven by growth investments and temporary inefficiencies from facility consolidations. Despite the miss, the company’s strong top-line growth, three out of four consecutive quarters beating consensus on at least one metric and ongoing benefits from MAP 2025 operational improvements have led analysts to upgrade RPM to a Buy, estimating the shares remain more than 10% undervalued relative to intrinsic fair value.

Cost pressures from lower fixed-cost absorption and higher SG&A spending weighed on margins during the quarter. In response, RPM has initiated a $100 million annual SG&A cost optimization program, expected to deliver roughly $5 million of savings in the third quarter of fiscal 2026, an additional $20 million in the fourth quarter, and the remaining $75 million in fiscal 2027. These measures should help restore adjusted EBIT growth to the mid- to high-single-digit percentage range, as management forecasts for the upcoming quarter.

RPM continues to execute its MAP 2025 strategy, which has delivered sustained improvements in working capital efficiency and margin expansion. Recent acquisitions, including the purchase of premium metal roofing and façade systems provider Kalzip, have broadened the company’s global building-envelope platform. Acquisitions contributed 3.4% to consolidated net sales in Q2, while foreign currency translation added 0.6%. With a debt-to-equity ratio of approximately 0.11 and a current ratio near 2.2, RPM maintains a strong balance sheet to support further bolt-on deals and fund ongoing growth investments.

Looking ahead to the fiscal 2026 third quarter, RPM projects consolidated sales growth in the mid-single-digit percentage range and adjusted EBIT expansion in the mid- to high-single-digit range. Management highlights a robust pipeline of deferred construction projects set to resume, and expects further margin tailwinds from full implementation of optimization initiatives. These factors, combined with steady cash flow generation—operating cash flow reached $583.2 million in the first half of fiscal 2026—underscore the company’s ability to sustain dividend growth and share repurchases even as demand environments fluctuate.