RPM International Stock Dips On Earnings

RPM International Inc. (NYSE: RPM), a global leader in specialty coatings, sealants, and building materials, released fiscal first-quarter 2026 earnings this morning, with the stock initially pulling back on the print.

EPS came in at $1.88 (in line), whilst revenue of $2.11 billion was a beat on expectations. The company guided for sales to increase toward the high end of the previous outlook of low-single- to mid-single-digit growth.

The consensus among analysts was that RPM International will report earnings per share (EPS) of $1.88, a modest increase from $1.84 in the same quarter last year, reflecting cautious optimism about the company’s profitability. Analysts also project revenue of approximately $2.05 billion, representing 4.35% year-over-year growth, though expectations remain tempered by recent downward revisions to full-year earnings forecasts.

This expectation comes on the heels of a strong fourth quarter, where RPM reported record sales of $2.08 billion, a 3.7% increase year-over-year, and net income of $225.8 million. Can RPM maintain this momentum, or will headwinds impact its Q1 results?

RPM's diverse business segments each tell a different story. In the previous quarter, the Construction Products Group (CPG) saw a slight sales increase of 0.3%, driven by pricing and demand for concrete-related products. The Performance Coatings Group (PCG) performed strongly, with an 8.8% increase in sales, fueled by volume growth in engineered solutions.

The Consumer Group also experienced growth, with a 4.9% rise in sales due to increased selling prices. However, the Specialty Products Group (SPG) faced a significant 14.3% decline in sales due to lower volumes in OEM markets. Investors will be keen to see if these trends have continued or shifted in Q1 2026.

The upcoming earnings report will be crucial for several reasons. First, it will provide insights into whether RPM can sustain its overall growth trajectory. Second, it will shed light on the performance of each segment, helping investors understand which areas are thriving and which are struggling. Third, the report will offer clues about RPM's ability to manage costs and maintain profitability in a challenging economic environment.

While the consensus appears cautiously optimistic, a closer look suggests potential downside risks that the market may be underestimating. The anticipated EPS increase of just $0.04 per share, despite record sales in the previous quarter, could indicate margin pressures.

Furthermore, the SPG's significant sales decline raises concerns about its long-term viability and the potential need for restructuring. If RPM's management fails to address these challenges effectively, the stock could face further downward pressure.