RPM International (NYSE:RPM) reported record first-quarter sales, adjusted EBITDA and adjusted earnings per share for fiscal 2027, as growth in its Performance Coatings and Consumer segments offset temporary weakness in Construction Products.
Adjusted diluted EPS rose 5.3% year over year to a first-quarter record of $1.98, according to Vice President, Controller and Chief Accounting Officer Michael Laroche. The company said higher sales and benefits from its MAP operational improvement program, including SG&A optimization, more than offset raw-material inflation, warranty costs and bad-debt expense.
Segment performance diverged
Construction Products Group sales increased due to the Kalzip acquisition, but organic sales declined as education and healthcare markets slowed. Those two markets account for more than one-quarter of the segment’s end-market exposure, Laroche said. The segment also faced finished-product shortages stemming from supplier constraints involving polyurethane raw materials.
Construction Products adjusted EBITDA declined as reduced volume hurt fixed-cost absorption, while inflation, bad debt and warranty costs added pressure. Sullivan said the polyurethane supply shortage has been resolved from a production standpoint, although RPM is still rebuilding inventory in the second quarter and working through delayed projects.
The company expects Construction Products to improve sequentially in the second quarter and return to positive organic growth later in the fiscal year. However, Sullivan said the recovery in its roofing-related businesses will be weighted toward spring because of the seasonal nature of roofing work.
Performance Coatings Group posted record results, supported by broad-based demand for engineered solutions used in high-performance buildings, energy and infrastructure projects. Food coatings and ingredients also contributed. The segment’s adjusted EBITDA and adjusted EBITDA margin reached records as stronger fixed-cost utilization and SG&A actions offset inflation.
Consumer Group sales also reached a record, including 5.2% organic growth. RPM cited shelf-space gains, new products and pricing, as well as improved results for The Pink Stuff cleaning brand. The company also pointed to gains in abrasives, primers, retail automotive and Ready Seal exterior wood stains. Consumer adjusted EBITDA and margin increased as higher volume improved fixed-cost absorption.
Sullivan said underlying consumer conditions remain challenging, citing sluggish retail traffic, weak housing turnover and higher interest rates. Still, he said RPM generated positive unit-volume growth in Consumer through market-share gains, new placements and product initiatives.
Inflation outlook rises, guidance narrows
Chief Financial Officer Rusty Gordon said raw-material inflation expectations have increased since the company’s July earnings call. RPM now expects second-quarter inflation of 9% to 11%, compared with its previous estimate of 6% to 8%. Third-quarter inflation is expected to be 7% to 9%.
Higher polyurethane feedstock costs, sustained increases in oil and commodity prices, and elevated freight costs contributed to the revised outlook. RPM has implemented additional price increases across all segments and freight surcharges in some businesses. Sullivan said the company covered inflation on a dollar basis in the first quarter and expects to do “a little bit better” in the second quarter, although gross-margin pressure is expected for the year.
For the fiscal second quarter, RPM expects consolidated sales and adjusted EBITDA to increase in the low- to mid-single-digit range. Segment sales are projected to rise in the low-single digits for Construction Products, mid- to high-single digits for Performance Coatings, and low- to mid-single digits for Consumer.
RPM narrowed its full-year fiscal 2027 outlook to mid-single-digit sales growth, from a previous range of 3% to 7%. It now expects adjusted EBITDA growth in the mid-single digits, versus prior guidance for an increase of 5% to 10%.
The company said MAP benefits, including $75 million in previously announced SG&A-focused savings, and incremental pricing are expected to offset persistent inflation. However, the outlook also incorporates startup costs at new shared facilities and more difficult comparisons in the second half.
Cash flow, acquisitions and emerging markets
RPM said it generated strong cash flow from improved profitability and working-capital efficiency. Working capital improved by 150 basis points from the prior year. The company returned $90.5 million to shareholders through dividends and repurchases, up 10.2% year over year, while total debt declined by $263 million.
The company completed the acquisition of Volteco in early October. Volteco, an Italy-based supplier of below-grade waterproofing solutions, generated calendar 2025 sales of €28 million and joined the Construction Products Group.
Emerging-market revenue grew more than 20%, driven by demand for engineered solutions for high-performance buildings and infrastructure. Sullivan said the company’s Platform Group structure, which coordinates operations across Africa, the Middle East, Asia-Pacific and now South America, has helped accelerate growth. He said the Southern Hemisphere developing world represented 8% of first-quarter consolidated sales, up from slightly less than 5% about five years ago.
RPM plans to provide further details on MAP 2030, operational initiatives and longer-term financial goals at its Investor Day on Nov. 9 in Maple Shade, New Jersey.
About RPM International (NYSE:RPM)
RPM International Inc is a multinational manufacturer of specialty coatings, sealants, building materials and related products. The company serves the construction, industrial, automotive, marine and consumer markets through a portfolio of businesses that develop products for protecting, repairing, maintaining and enhancing surfaces and structures.
Its brands and businesses include Rust-Oleum consumer and industrial coatings, DAP caulks and sealants, Tremco and Euclid Chemical construction products, Carboline protective coatings, Stonhard seamless flooring systems and Flowcrete flooring products.
