RPM International Inc. (RPM (RPM)) shares climbed Wednesday after the company reported record fiscal fourth-quarter 2026 earnings that topped Wall Street estimates and expanded its share repurchase program. But the real story might be what management said about the year ahead: the Iran conflict is going to sting, especially early on.

Adjusted earnings per share rose 9.9% year over year to a record $1.89, beating the analyst consensus estimate of $1.85. Revenue increased 7.2% to $2.23 billion from a year earlier, exceeding expectations of $2.18 billion. Not bad for a company that makes everything from concrete admixtures to roof coatings.

Sales growth included 2.5% organic growth, a 3.5% contribution from acquisitions and a 1.2% benefit from foreign exchange. The company said demand remained strong for engineered solutions used in high-performance buildings and infrastructure projects. Acquisitions, pricing actions and favorable currency also supported growth.

Adjusted EBIT increased 7.7% to a record $338.6 million, driven by higher sales, improved fixed-cost leverage and operational improvements under the company's MAP initiative.

Cash Flow Strength Supports Buybacks

RPM generated $898.7 million in operating cash flow during fiscal 2026, up from $768.2 million a year earlier and the second-highest level in company history. Capital expenditures totaled $223.5 million.

The company returned $349.2 million to shareholders through dividends and share repurchases.

RPM's board also approved a $700 million increase to its share repurchase authorization, adding to the remaining $114.8 million available under the existing program. That's a big vote of confidence in the company's cash generation.

Total debt declined to $2.53 billion as of May 31, 2026, from $2.65 billion a year earlier, reflecting strong cash generation and debt reduction.

Construction And Coatings Drive Growth

Emerging markets delivered double-digit growth, while North America benefited from turnkey and system solutions. European sales also gained from acquisitions.

The Construction Products Group posted 5.7% organic sales growth, supported by demand for concrete admixtures, roofing restoration systems and wall solutions. The segment also reported record adjusted EBIT.

Performance Coatings Group organic sales increased 2.2%, while adjusted EBIT reached a record despite a $3.2 million bad debt charge. Growth was driven by fireproofing systems, infrastructure projects, food coatings and emerging markets.

The Consumer Group reported a 0.8% decline in organic sales because of weaker do-it-yourself demand. However, adjusted EBIT improved through operational efficiencies and acquisition integration, excluding a $9.7 million non-cash impairment charge.

RPM International Outlook

RPM expects fiscal 2027 revenue between $8.10 billion and $8.41 billion, compared with analysts' estimate of $8.19 billion.

The company projects first-quarter fiscal 2027 sales and adjusted EBITDA growth in the mid-single digits. For the full year, it expects sales growth of 3% to 7% and adjusted EBITDA growth of 5% to 10%.

CEO Frank Sullivan said momentum from the second half of fiscal 2026 is expected to continue into fiscal 2027 despite inflationary pressures related to the Middle East.

He added that demand for engineered building and infrastructure solutions remains strong, while the Consumer business is beginning to recover after a prolonged slowdown.

What Management Said This Quarter

On the earnings call, RPM executives said demand remains strong in the Construction Products and Performance Coatings segments, supported by data center, infrastructure, restoration and maintenance projects, while the Consumer business is showing signs of stabilization after a prolonged downturn in DIY demand.

Management said raw material inflation is expected to be highest in the first half of fiscal 2027 as the impact of the Iran conflict flows through the profit-and-loss statement.

The company has already implemented price increases to offset those costs and expects price-cost dynamics to improve in the second half of the fiscal year as inflation moderates.

Executives also said SG&A-focused optimization actions—part of the company's broader MAP 3.0 operational improvement efforts—are expected to generate about $75 million in benefits during fiscal 2027.

RPM International Price Action

RPM Price Action: RPM International shares were up 4.04% at $105.63 at the time of publication on Wednesday, according to market data.