RPM Clocks More Than 9% Sales Growth In Q2; Margins Expand Aided By MAP 2025

RPM International Inc RPM reported second-quarter FY23 sales growth of 9.3% year-over-year to $1.79 billion, missing the consensus of $1.81 billion.
Sales by segments: Construction Products Group $634.1 million (+3.2% Y/Y), Performance Coatings Group $335.2 million (+10.8% Y/Y), Specialty Products Group $212.1 million (+9.5%Y/Y) and Consumer Group $610.4 million (+15.3% Y/Y).
Adjusted EPS of $1.10 was in-line with the consensus. Gross margin expanded by 300 bps to 38.5%.
Adjusted EBIT margin expanded by 238 bps to 12%. The adjusted EBIT increased 36.4% Y/Y to $214.7 million, driven by solid sales growth and MAP 2025 benefits, primarily from manufacturing and commercial improvement initiatives.
During the six months of FY23 operating cash flow was $190.9 million compared to $159.4 million during the prior-year period.
Chair and CEO Frank C. Sullivan said, "We also introduced our MAP 2025 operating improvement program at an investor day during the quarter and are off to a promising start with year-to-date MAP benefits exceeding our targets."
3Q23 outlook: The company expects sales to increase in the low to mid-single-digit percentage range.
RPM sees adjusted EBIT of $75 million - $85 million.
Price Action: RPM shares closed higher by 0.17% at $98.02 on Wednesday.
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