Financial Data and Key Metrics Changes - Consolidated sales increased by 7.4% to a record level, with a balance between organic and M&A growth [11] - Adjusted EBIT increased by 2.9% to a record, driven by volume growth and MAP 2025 initiatives, despite headwinds from higher raw material costs [11] - First quarter adjusted EPS reached a record $1.88, influenced by adjusted EBIT improvement, partially offset by increased interest expense from acquisition financing [11] Business Line Data and Key Metrics Changes - Construction Products Group sales increased to a record, driven by systems and turnkey roofing solutions, although offset by softness in Europe and disaster restoration business [12][13] - Performance Coatings Group achieved record sales with broad-based strength in turnkey flooring and protective coatings, with adjusted EBIT also reaching a record [14] - Consumer Group sales increased to a record due to successful integration of acquisitions, although DIY demand remained soft [14] Market Data and Key Metrics Changes - Growth was led by Europe, benefiting from acquisitions and favorable effects, while North America grew by 5.9% [12] - Emerging markets showed mixed performance, with strength in Africa and the Middle East driven by infrastructure projects [12] Company Strategy and Development Direction - The company is focused on a pivot to growth, investing in sales associates and support staff, while competitors are cutting costs [9][10] - Strategic M&A activities are being rebuilt, with a focus on core and adjacent markets [16] - The company is expanding its presence in new retail channels, including grocery and dollar stores, to capture additional market share [80] Management's Comments on Operating Environment and Future Outlook - Management expects another quarter of record sales and adjusted EBIT, driven by systems and turnkey solutions and a focus on repair and maintenance [19][20] - The company anticipates continued challenges from economic uncertainty and inflation, but remains optimistic about growth investments [21][22] - Management highlighted the importance of maintaining benefit programs and investing in growth despite a challenging environment [10][16] Other Important Information - The company returned $82 million to shareholders through dividends and share repurchases during the first quarter [16] - Inventory increases were driven by strategic purchases to mitigate future tariffs and ensure high service levels during plant consolidations [17] Q&A Session Summary Question: Outlook for the year and impact of investments - Management indicated that investments for growth are delivering higher organic growth levels than the market, with deliberate spending on new hires and advertising [25][26] Question: Industry demand for the Consumer Group - Management believes the Consumer Group is outperforming the broader industry, with new product introductions helping to gain market share [29][30] Question: Details on increased marketing spend - The increase in marketing spend is primarily in advertising, focusing on social media and e-commerce, particularly in the cleaners category [34][35] Question: Impact of manufacturing inefficiencies - Management noted about $10 million of unfavorable conversion costs due to plant consolidations, which are expected to continue into the second quarter [37] Question: Backlog and growth in Construction Products and Performance Coatings - Management highlighted strong backlogs in reroofing and institutional projects, with aggressive expansion in sales forces contributing to growth [44][48] Question: Changes in guidance and challenges - Management cited challenging dynamics in gross profit margins and unexpected healthcare cost increases as reasons for adjusting guidance to the lower end of the range [55][56] Question: Pricing strategies in response to tariffs - Management acknowledged the difficulty in raising prices earlier due to the unpredictable nature of tariffs, but expects to implement higher prices in the upcoming quarters [59][60] Question: Working capital management and inventory purchases - Management indicated strategic inventory purchases were made to mitigate tariff impacts and ensure service levels during transitions [66] Question: Future growth expectations - Management does not view the current year as normal due to ongoing uncertainties, but anticipates that in a more stable environment, revenue growth should lead to higher earnings growth [108]

Financial Data and Key Metrics Changes - Consolidated sales increased by 7.4% to a record level, with both organic and M&A growth contributing [11] - Adjusted EBIT increased by 2.9% to a record, driven by volume growth and MAP 2025 initiatives, despite headwinds from higher raw material costs [11] - First quarter adjusted EPS reached a record $1.88, influenced by adjusted EBIT improvement, partially offset by increased interest expense due to higher debt levels from acquisition financing [11] Business Line Data and Key Metrics Changes - Construction Products Group sales reached a record, driven by systems and turnkey roofing solutions, although there was softness in Europe and disaster restoration business [12][14] - Performance Coatings Group achieved record sales with broad-based strength in turnkey flooring and protective coatings, supported by acquisitions [14] - Consumer Group sales increased to a record due to successful integration of The Pink Stuff and Ready Seal acquisitions, despite soft DIY demand [14] Market Data and Key Metrics Changes - Growth was led by Europe, benefiting from acquisitions and favorable effects, while North America grew by 5.9% [12] - Emerging markets showed mixed performance, with strength in Africa and the Middle East driven by infrastructure projects [12] Company Strategy and Development Direction - The company is focused on a pivot to growth, emphasizing strategic acquisitions, new product introductions, and efficiency initiatives [6][8] - Investments in sales associates and support staff are being made, contrasting with competitors who are cutting costs [9][10] - The company is expanding its presence in adjacent markets, particularly in cleaning products and consumer categories [30][102] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing economic uncertainty and challenges in the construction market, but expressed confidence in achieving record sales and EBIT in the upcoming quarter [19][20] - The company anticipates continued growth in sales and adjusted EBIT, driven by acquisitions and a focus on repair and maintenance [21] - Management highlighted the importance of maintaining growth investments despite rising healthcare costs and inflationary pressures [26][56] Other Important Information - The company returned $82 million to shareholders through dividends and share repurchases during the first quarter [16] - Inventory increases were strategic to mitigate future tariff impacts and ensure high service levels during plant consolidations [17] Q&A Session Summary Question: Outlook for the year and impact of investments - Management indicated that investments are delivering higher organic growth levels than the market, with deliberate spending on new hires and advertising contributing to growth [25][26] Question: Industry demand for the Consumer Group - Management believes the Consumer Group is outperforming the broader industry, with new product introductions helping to gain market share [29] Question: Details on increased marketing spend - The increase in marketing spend is primarily in advertising, focusing on social media and e-commerce, particularly in the cleaners category [34] Question: Impact of manufacturing inefficiencies - Management noted about $10 million of unfavorable conversion costs due to plant consolidations, which are expected to continue into the second quarter [37] Question: Organic growth drivers in Construction and Performance Coatings - Management highlighted strong backlogs in reroofing projects and aggressive sales force expansion as key drivers of growth in these segments [44][49] Question: Changes in full-year guidance - Management cited challenging gross profit margins and unexpected healthcare cost increases as reasons for adjusting guidance to the lower end of the range [55][56] Question: Pricing strategy in response to tariffs - Management acknowledged the difficulty in timing price increases due to fluctuating tariff impacts, with expectations for higher prices in the upcoming quarter [59][60] Question: Working capital management and inventory strategy - Management explained strategic inventory purchases to prepare for tariff impacts and ensure product availability during transitions [66] Question: Future growth expectations and market conditions - Management expressed optimism for improved market conditions in the coming year, anticipating better dynamics in the housing market [87]

Financial Data and Key Metrics Changes - Consolidated sales increased by 7.4% to a record level, with a balance between organic and M&A growth [10] - Adjusted EBIT increased by 2.9% to a record, driven by volume growth and MAP 2025 initiatives, despite headwinds from higher raw material costs [10] - First quarter adjusted EPS reached a record $1.88, influenced by adjusted EBIT improvement, partially offset by increased interest expense from higher debt levels [10] Business Line Data and Key Metrics Changes - Construction Products Group sales reached a record, driven by systems and turnkey roofing solutions, although there was softness in Europe and disaster restoration business [11] - Performance Coatings Group achieved record sales with broad-based strength in turnkey flooring and protective coatings, with acquisitions contributing to the sales increase [12] - Consumer Group sales increased to a record due to successful integration of The Pink Stuff and ReadySeal acquisitions, despite soft DIY demand [12] Market Data and Key Metrics Changes - Growth was led by Europe, benefiting from acquisitions and favorable effects, while North America grew by 5.9% driven by systems and turnkey solutions [11] - Emerging markets showed mixed performance, with strength in Africa and the Middle East driven by infrastructure projects [11] Company Strategy and Development Direction - The company is focused on a pivot to growth, investing in sales associates and support staff, while competitors are cutting costs [8][9] - Strategic M&A activities are being rebuilt, with a focus on core and adjacent markets, as evidenced by the acquisition of ReadySeal [15] - The company is implementing pricing actions to recover from inflation impacts, particularly in metal packaging and niche products [18] Management's Comments on Operating Environment and Future Outlook - Management expects another quarter of record sales and adjusted EBIT, driven by systems and turnkey solutions and a focus on repair and maintenance [18] - The company anticipates continued economic uncertainty, which may affect growth dynamics throughout the fiscal year [19] - Management highlighted the importance of maintaining growth investments despite challenging market conditions [19] Other Important Information - The company returned $82 million to shareholders through dividends and share repurchases during the first quarter [15] - Inventory increases were driven by strategic purchases to mitigate future tariff impacts [16] Q&A Session Summary Question: Outlook for the year and impact of investments - Management indicated that investments for growth are delivering higher organic growth levels than the market, with deliberate spending on new hires and advertising [22][23] Question: Industry demand for the Consumer Group - Management believes the Consumer Group is outperforming the broader industry, with new product introductions helping to gain market share [25] Question: Increased marketing spend in the Consumer Group - The increase in marketing spend is focused on social media and e-commerce, particularly in the cleaners category [28] Question: Impact of manufacturing inefficiencies - Management noted about $10 million of unfavorable conversion costs due to plant consolidations, which are expected to continue into the second quarter [31] Question: Organic growth in Construction Products Group and Performance Coatings Group - Management highlighted strong backlogs in roofing and aggressive sales force expansion as key drivers of growth in these segments [36] Question: Changes in guidance and profitability headwinds - Management cited challenging dynamics in gross profit margins and unexpected healthcare cost increases as reasons for adjusting guidance to the lower end [44] Question: Tariff impacts and mitigation strategies - Management discussed efforts to mitigate tariff impacts through production shifts and pricing agreements, with about half of the $90 million impact being offset [85] Question: M&A appetite and focus areas - Management expressed a strong appetite for M&A, particularly in Performance Coatings Group and Construction Products Group, while remaining open to opportunities in consumer and cleaning sectors [87]

Core Viewpoint - RPM International Inc. is expected to report its first-quarter fiscal 2026 results on October 1, with adjusted EPS estimated at $1.87, reflecting a 1.6% year-over-year growth, and net sales projected to rise 3.8% to $2.04 billion [1][3][9] Financial Performance - In the last reported quarter, RPM's adjusted EPS and net sales exceeded the Zacks Consensus Estimate by 7.5% and 3.2%, respectively, with year-over-year growth of 10.3% and 3.7% [1][2] - The company has topped analysts' expectations in three of the last four quarters, with an average negative surprise of 4.4% in the remaining quarter [2] Sales and Growth Drivers - RPM's net sales are expected to grow year over year due to contributions from all reportable segments: Construction Products Group (CPG), Performance Coatings Group (PCG), and Consumer Group [4] - The growth is driven by increased sales of systems and turnkey solutions for high-performance buildings, as well as maintenance and repair products [4] - Acquisitions of The Pink Stuff and Ready Seal are anticipated to contribute positively, despite challenges from reduced DIY sales and soft demand in specialty OEM markets [5] Segment Performance - The CPG segment, contributing 38.9% to the previous quarter's net sales, is expected to see a growth of 3.1% year over year to $818.8 million [6] - The Consumer Group and PCG segments are projected to grow by 5.2% and 2.5% year over year, respectively [6] Cost Management and Margins - RPM's bottom line is expected to benefit from MAP 2025 initiatives, leading to savings in procurement, manufacturing, and commercial excellence [8] - Adjusted EBIT is projected to increase by 4.5% year over year to $343 million, supported by lower advertising, insurance, and bonus expenses [9][10] Earnings Estimates - The Zacks Consensus Estimate for RPM's adjusted EPS has decreased slightly from $1.88 to $1.87 over the past 30 days, indicating a 1.6% growth from the previous year's figure of $1.84 [3] - The company expects selling, general, and administrative expenses as a percentage of net sales to decline by 10 basis points year over year to 26.6% [10]