AAR's Fiscal Year 2026 Fourth Quarter Results: Record Sales and Double-Digit Growth
AAR, a leading provider of parts, repair, and software solutions to the commercial and government sectors, recently reported its fiscal year 2026 fourth quarter results. The company's performance was marked by record sales and double-digit growth across key metrics.
According to John Holmes, Chairman, President, and Chief Executive Officer, AAR's momentum continued in the quarter, with a strong set of results demonstrating the power of the company's connected platform approach. This strategy delivered higher and more profitable growth, with 26% growth in adjusted sales, 27% growth in adjusted EBITDA, and 32% growth in adjusted earnings per share for the period.
The adjusted sales increase included 13% organic adjusted sales growth, led by 19% organic growth in AAR's new parts distribution activities and significant growth at Trax. The company also reported a 31% increase in sales to commercial customers and a 5% increase in sales to government customers compared to the same period last year.
AAR's adjusted EBITDA margin, excluding Legacy Commercial Programs segment, was 13%, already demonstrating the company's ability to achieve the three-year range provided at its Investor Day event held in May. While progress will not be linear, this quarter's results underscore AAR's confidence that it will ultimately be able to achieve or exceed the high end of its range as it continues to execute on its strategy.
The company also reported strong cash flow generation, with adjusted cash from operations of $58 million in the first quarter and $94 million for the full year. This allowed AAR to further reduce its net leverage and continue to carefully manage its balance sheet in order to support its disciplined approach to capital allocation and preserve financial flexibility.
Looking ahead, AAR continues to expect double-digit sales growth and further margin expansion as it executes on its plan. The company's strong operational performance drove adjusted diluted EPS up 32% year-over-year to $1.53 per share. This was driven by the company's ability to expand EBITDA margins despite the year-over-year comparable impact of a one-time gain in used serviceable material in the prior year.
The integration of HAECO Americas is tracking ahead of schedule and slightly dilutive to near-term margins, with the impact being roughly 40 basis points this quarter compared to 70 basis points last quarter. AAR's full-year fiscal 2026 results were marked by growth across all key performance metrics, demonstrating its disciplined execution and the power of its parts repair and software platform.
The company closed on four separate acquisitions in 2026 and has been successfully executing on complicated integrations that involve site consolidation, workforce repositioning, and detailed customer coordination. Overall, AAR's fiscal year 2026 fourth quarter results demonstrate the company's strong performance and its ability to execute on its strategy.
AAR's continued focus on innovation, customer satisfaction, and operational excellence has driven its success in the commercial and government sectors. The company's connected platform approach is delivering higher and more profitable growth, and its disciplined execution is expected to drive double-digit sales growth and further margin expansion in the future.
