RPM International: Building for Stability in a Volatile World
Record Q4 results and a quiet pivot to EBITDA guidance set the stage for another year of geopolitical whiplash.
RPM · Earnings Call · 2026-07-22
Record quarter, but the real story is the whiplash
RPM International closed fiscal 2026 with another quarter of record results—each segment grew sales and adjusted EBIT. The headline is strong, but Frank Sullivan's language on the call was a study in tempered optimism.
This change will help comparisons to peer companies and will better reflect underlying earnings during periods of acquisition activity.
That is Russell Gordon explaining the switch to adjusted EBITDA guidance, a quiet but telling shift. The company is deliberately aligning with peers, but the underlying message is that the environment remains anything but stable.
System selling and data centers are the growth engines
The Construction Products Group and Performance Coatings Group continue to outgrow their markets, powered by data centers and infrastructure projects. Matt Schlarb walked through how the company has moved from selling components to complete systems: “we have developed system offerings for all six sides of the building rather than just selling singular components.” — Matt Schlarb, Vice President of Investor Relations and Sustainability · 2026-07-22 Frank later cautioned not to overstate the data-center boom: “I think it feels like it's even keel... not to overstate the impact of data centers on our results.” — Frank Sullivan, Chair and CEO · 2026-07-22 That mix of enthusiasm and restraint is classic RPM. The SG&A focused optimization actions that have been a recurring theme for the past year are now delivering $75 million in expected savings for fiscal 2027, but the company is already signaling that this is only a down payment on the next stage of MAP 3.0.
Raw materials, tariffs, and the patience to hold price
The company is navigating a second consecutive year of raw-material inflation and tariff volatility. Frank's frustration was evident when he said: “Very proud of how the RPM companies and our associates have dodged and weaved and adjusted in this VUCA environment. If you can sense some frustration in response to your question, it's there.” — Frank Sullivan, Chair and CEO · 2026-07-22 That sentiment echoes the prior quarter's comments: “we seem to have a whole of government that doesn't like stability, whether it's tariffs or government shutdowns and now war.” — Frank Sullivan, Chairman and Chief Executive Officer · 2026-04-08 The company remains confident in its ability to pass through costs: “Typically, we retain 100% of the price we put forward, given the strength of our brands.” (inline_quote from 2800882637434595394) That pricing power is visible in the gross margin, which has held above 39% for the past two years. Gross margin has defied a wave of cost inflation, staying in the high-30s even as input prices surged.
Capital returns, guidance, and the path forward
The company raised its buyback authorization and signaled willingness to be opportunistic. Frank: “Certainly with a stock price that has been declining with the broader market... there'll be opportunities for us to be opportunistic in the event of weakness in our stock pricing.” — Frank Sullivan, Chair and CEO · 2026-07-22 The stock itself has been in a broad drawdown of about 23% from its late-2024 peak, and the last 90 days have been flat—suggesting investors are waiting for clarity on the macro environment. The shift to EBITDA guidance is meant to make comparisons easier, but it also aligns RPM with peers. As Frank put it in the prior call, “For the most part, we will offset all of that impact.” — Frank Sullivan, Chairman and CEO · 2025-04-08 That persistent optimism is now tempered by the realization that the next year may not bring stability. Still, with a healthy balance sheet and a refreshed focus on system selling, RPM is positioning itself to outperform when the worm turns.