Brady Corporation Surpasses Expectations with Record-High Adjusted Earnings per Share
The Brady Corporation recently announced its fiscal 2025 third quarter earnings, which saw the company surpass expectations with record-high adjusted earnings per share. The company's strong performance was driven by organic sales growth of 1.6%, acquisitions growing sales by 10.5%, and adjusted earnings per share increasing by 11.9% in the quarter.
According to Russell Shaller, President and Chief Executive Officer of Brady Corporation, the Americas and Asia region reported excellent organic sales growth of 5.4% and adjusted operating income growth of 20.2%. In contrast, the Europe and Australia region faced a tougher macro environment, resulting in an organic sales decline of 5.4%, but still managed to increase adjusted operating income by 3.8% due to restructuring actions taken to lower costs.
Shaller expressed confidence that the company is in a position to drive future earnings growth in Europe following the efficiency actions implemented this fiscal year. Furthermore, Brady Corporation continued to invest in research and development (R&D), growing its R&D expenditure by more than 8% this quarter, which was driven by both organic business investments and the acquisition of Gravotech at the beginning of the fiscal year.
The integration of R&D functions has allowed for combined new product road maps, including direct part marking technologies. Additionally, Brady Corporation announced the acquisition of Funai's Microfluidics Solutions business based in Lexington, Kentucky, with a main production facility in the Philippines. This further rounds out their portfolio to enable custom part marking and provides an additional source of specialty ink cartridges.
Regarding global trade and tariffs, Shaller acknowledged the uncertainty presented by these factors but noted that Brady Corporation's largely in-country manufacturing operations and geographic diversification help mitigate the impact of tariffs. The company distributes certain product lines globally from their various locations for sale within specific countries, with some exceptions for specialty adhesives materials produced in the U.S., printers manufactured in Malaysia, and specialty identification products made in Mexico.
Brady Corporation's revenue breakdown through the first three quarters of this fiscal year shows 52% generated in the U.S., 30% in Europe, 8% in Asia, with the remaining 10% in Australia and the rest of Americas. Breaking down Asia further reveals that 3% was in China and 5% was in the rest of Asia.
With a strong performance across various regions and continued investment in R&D, Brady Corporation's record-high adjusted earnings per share demonstrate its ability to adapt to changing market conditions and drive future growth.
