RPM International: A Season of Growth Amidst Turbulence

RPM International, the diversified industrial company, has just reported its strongest quarterly performance in recent history. Despite facing headwinds from a customer bankruptcy charge and mixed economic conditions, RPM managed to achieve records in several key areas, including sales, adjusted EBIT margin, and adjusted EPS.

According to Frank Sullivan, Chair and CEO of RPM International, the company's associates have consistently made progress implementing the MAP 2025 operating improvements while navigating the challenges of a no-to-low growth macroeconomic environment. "Our pipeline of MAP improvements remains full and continues to grow," he said in the recent conference call, "and we will implement these initiatives for the balance of the 2025 fiscal year and in fiscal 2026."

RPM's ability to outgrow its markets was evident during the quarter as each of its segments generated positive organic volume and sales. The company's focus on repair and maintenance, combined with its entrepreneurial culture, allowed it to capture growth opportunities across all segments. Demand for technical products serving high-performance construction projects was particularly strong in the Construction Product Group's turnkey roofing systems business.

Residentially focused end markets, which have been under pressure for some time, showed signs of stabilizing during the second quarter, aided by favorable weather conditions through the first two months. This was an incremental positive for RPM's consumer and specialty products groups.

RPM continued executing on MAP 2025 initiatives, including SG&A streamlining. The company's focus on structurally reducing expenses while improving efficiencies drove adjusted EBIT growth in each of its four segments. As Rusty Gordon noted during the conference call, "after more than a year of increasing SG&A as a percent of sales declined during the quarter."

However, RPM is facing real winter conditions compared to mild conditions in the prior year, which is putting pressure on some of its businesses, particularly in the consumer segment. Despite this temporary interruption, RPM's strong MAP 2025-driven performance is expected to continue into the spring fourth quarter, where the company expects to see a return to strong sales and earnings growth.