The coatings maker missed on sales and beat on adjusted earnings, then narrowed its fiscal 2027 range to mid-single-digit growth. Its chief executive cited raw-material inflation and a slowdown in construction products.
Business · FinancialMarkets.com · October 6, 2026 · Tickers: RPM, SHW, PPG, AXTA
RPM International called its fiscal first quarter a record. Its outlook for the year was narrower than before, and the trading in its shares changed direction over the day.
For the quarter ended Aug. 31, the maker of coatings, sealants and building materials reported net sales of $2.216 billion, up 4.8% from a year earlier and slightly below the $2.221 billion analysts expected. Adjusted earnings were $1.98 a share, three cents above the $1.95 estimate. Earnings under generally accepted accounting principles were $2.01 a share.
The outlook change
RPM now expects fiscal 2027 sales and adjusted EBITDA each to grow by a mid-single-digit percentage. Its previous guidance called for sales growth of 3% to 7% and adjusted EBITDA growth of 5% to 10%.
On sales, the new wording sits around the middle of the old range. On profit, it removes the upper end. Adjusted EBITDA growth of 10% is no longer in the outlook, and a mid-single-digit midpoint is below the previous midpoint of 7.5%. For the fiscal second quarter, RPM expects sales and adjusted EBITDA to grow by a low- to mid-single-digit percentage.
Management's explanation
Chief Executive Frank Sullivan pointed to raw-material inflation and "a temporary slowdown in our Construction Products Group."
Raw-material costs matter for a coatings maker because resins, solvents and pigments are tied to petrochemical prices. Construction products are tied to building activity, which is sensitive to interest rates. On Monday the 10-year Treasury yield ended at a level last seen in 2002.
The trading
RPM shares fell about 3.9% in premarket trading and then reversed. By early afternoon they were up about 3.4%, a swing of more than 7 percentage points from the early low.
The release gives investors two ways to frame it. A record quarter with an earnings beat supports the view that the business is executing through a soft patch. A sales miss and a trimmed profit range support the view that cost and demand pressure are building.
The debate
One position is that investors had already priced a cautious outlook, so removing the top of the EBITDA range mattered less than the beat, and that "temporary" in Sullivan's description suggests management expects construction to recover.
The other position is that the narrower range, alongside a sales miss, shows the first effects of higher rates and input costs on a building-materials business, and that the second-quarter outlook of low- to mid-single-digit growth points to a slower start to the year than the full-year figure implies.
Second-quarter markers
Sales in the Construction Products Group and gross margin in the fiscal second quarter will show whether the slowdown proves temporary and whether RPM can price ahead of raw-material costs. Any change to the full-year range in January would show which way the narrowing ran.