Rust-Oleum Maker RPM Attributes Weak Outlook to Economic Conditions, Weather
Key Takeaways
- RPM International said difficult economic conditions and bad weather will hurt current-quarter results.
- The maker of Rust-Oleum and other coatings and sealants anticipates third-quarter fiscal 2025 sales to be flat, and adjusted EBIT to be up or down by a low-single-digit percentage.
- The company explained that high mortgage rates and worse-than-expected winter weather are impacting demand.
Rust-Oleum and DayGlo parent RPM International (RPM) on Tuesday issued soft guidance as it said difficult economic conditions and bad weather will hurt current-quarter results.
RPM said it expects third-quarter sales to be flat from the record $1.52 billion it posted in the prior-year period. It sees adjusted earnings before interest and taxes (EBIT) of up or down a low-single-digit percentage. Analysts surveyed by Visible Alpha were looking for sales of $1.55 billion and adjusted EBIT up 13.5%.
CEO Frank Sullivan explained that RPM faced "a mixed economic environment," and "market pressure caused by winter weather that is meaningfully harsher than the prior year." Sullivan added that the bad weather along with high mortgage rates have hurt demand at its Consumer and Specialty Products unit.
Q2 Results Top Estimates
The news offset better-than-expected second-quarter results. RPM reported adjusted earnings per share (EPS) of $1.39, and revenue up 3% to $1.85 billion. Both were Q2 records and exceeded Visible Alpha forecasts.
RPM International shares were little changed soon after the opening bell Tuesday. They have gained about 15% over the last year.
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