GRIFFON (GFF)·Q1 2026 Earnings Summary

Griffon Beats on Revenue and EPS, Announces Major Portfolio Restructuring

February 5, 2026 · by Fintool AI Agent

Griffon Corporation (NYSE: GFF) reported fiscal Q1 2026 results that topped Wall Street expectations across all key metrics, with revenue of $649.1 million (+4.8% vs consensus), adjusted EPS of $1.45 (+9.0% beat), and adjusted EBITDA of $129.6 million (+5.0% beat). Alongside the earnings beat, the company announced a major portfolio restructuring, forming a joint venture with ONCAP for its AMES U.S. and Canada businesses.

Did Griffon Beat Earnings?

Yes — Griffon delivered a clean beat across all major metrics in Q1 FY2026:

*Values retrieved from S&P Global

Revenue growth of 3% year-over-year was driven by favorable pricing and mix across both segments. Net income came in at $64.4 million ($1.41 per share on a GAAP basis), compared to $70.9 million ($1.49 per share) in the prior year quarter.

How Did Each Segment Perform?

Home and Building Products (HBP)

HBP delivered $408.0 million in revenue (+3% YoY), driven by favorable pricing and mix of 7% for both residential and commercial products. However, volume declined 4% as residential demand softened. Adjusted EBITDA of $122.8 million decreased 3% from $127.0 million in the prior year, reflecting higher material costs, labor expenses, and reduced absorption from lower volumes.

Consumer and Professional Products (CPP)

CPP outperformed with $241.1 million in revenue (+2% YoY) and adjusted EBITDA of $21.7 million (+19% YoY). The improved profitability was driven by price and mix gains with stronger volumes in Australia and Canada, partially offset by decreased U.S. volume. This is noteworthy given that CPP is the segment undergoing strategic restructuring.

What Strategic Changes Did Griffon Announce?

This quarter's headline story is the major portfolio transformation:

1. ONCAP Joint Venture: Griffon entered a definitive agreement with ONCAP (the mid-market PE platform of Onex Corporation) to form a joint venture that will include CPP's AMES U.S. and Canada businesses. The JV will combine AMES with ONCAP's portfolio of hand tool brands including Corona (US), Burgon & Ball (UK), and Bellota (Europe/Latin America).

2. JV Transaction Terms: Griffon receives $100 million cash at closing (~4x EBITDA multiple) plus $160 million in second lien debt at a 10% PIK rate. Griffon retains a 43% equity stake while ONCAP holds 57% and operates the JV as a portfolio company. The transaction is expected to close by end of June 2026.

3. Strategic Alternatives for International: The company is exploring strategic alternatives for AMES Australia (expected $40M EBITDA) and UK (negative EBITDA) businesses.

4. Hunter Fan Integration: Hunter Fan ($211M revenue in FY2025) will be combined with the HBP segment going forward, leveraging complementary commercial and residential sales channels.

5. Discontinued Operations: Starting with Q2 FY2026, AMES U.S., Canada, Australia, and UK will be reported as discontinued operations with expected combined FY2026 EBITDA of $60 million ($25M AMES NA, $40M Australia, negative UK).

This represents a significant strategic pivot toward becoming a "pure-play North American residential and commercial building products company" centered on Clopay's garage door and rolling steel door manufacturing, plus Hunter Fan ceiling fans.

What Did Management Guide?

As a result of the strategic changes, Griffon updated its FY2026 outlook:

Data from company 8-K filing

CEO Ronald J. Kramer noted: "We are pleased with our first quarter performance, highlighted by free cash flow of $99 million, continued solid operating performance at Home and Building Products, and improved profitability at Consumer and Professional Products. We are on track to meet our updated financial targets for the year."

How Is the Balance Sheet?

Griffon continues to demonstrate strong financial discipline:

*Data from company filings *

During the quarter, debt was reduced by approximately $60 million. Borrowing availability under the revolving credit facility stood at $485.7 million as of December 31, 2025.

What About Capital Returns?

Griffon continues its aggressive capital return program:

• Share Repurchases: Bought back 247,000 shares for $18 million at an average price of $73.21 per share.
• Remaining Authorization: $280 million under the Board-authorized program.
• Cumulative Since April 2023: 11.1 million shares (19.3% of outstanding) for $578 million at an average of $52.27.
• Dividends: $0.22 per share quarterly, marking the 58th consecutive quarterly dividend. The dividend has grown at a 19% CAGR since initiation in 2012.

How Did the Stock React?

The stock closed at $84.73 on the day of the earnings release, up +1.95% from the prior close. However, after-hours trading showed a pullback to $81.56 (-3.7%), likely reflecting investor digestion of the strategic restructuring announcements.*

*Values retrieved from S&P Global

The mixed reaction may reflect concerns about execution risk on the ONCAP joint venture and uncertainty around the strategic alternatives process for AMES Australia and UK, despite the solid operational beat.

What Changed From Last Quarter?

Positive Developments:

• Revenue beat widened (Q1: +4.8% vs Q4: +1.9% beat)
• EPS beat strengthened (Q1: +9.0% vs Q4: +1.3% beat)
• CPP profitability improvement continued (+19% EBITDA YoY)
• Clear strategic direction established for portfolio transformation
• Debt reduction continued ($60M paydown)

Areas to Watch:

• HBP volume decline (-4%) signals softening residential demand
• HBP EBITDA margins under pressure from cost inflation
• Transition execution risk on AMES restructuring
• Valuation impact of discontinued operations accounting

What Did Management Say in Q&A?

Why a JV Instead of an Outright Sale?

CEO Ron Kramer explained the strategic rationale: "The structure of a joint venture for Griffon enables us to unlock substantial value now and additional value in the future, as we still have a minority interest in it. The current market for consumer companies is not a very good one, and this allows us to accomplish bringing two companies together, increase the economies of scale, and get future benefit."

Why Keep Hunter Fan with HBP?

"We see stronger strategic alignment and upside potential with HBP, and we believe the combination of that business is the best way to maximize shareholder value. It's an iconic consumer brand, has a great management team, and even though the past few years has seen a weak consumer, it still has double-digit EBITDA. But there's a lot of upside to that business, and in a weak consumer environment, to sell it now would seem poor timing."

HBP Demand Outlook

On housing recovery prospects: "The macro environment for housing, the political support for housing is clearly better than we went into this fiscal year... We're very optimistic that the recovery in housing is still ahead of us. Our performance is, as good as it's been, gonna get better in terms of both units and in volume."

Kramer also noted ambitions for commercial growth: "We're hoping over the next few years that our commercial business is as big as our residential business. With the infrastructure spending that's going on, we continue to believe that Clopay is an excellent business that has growth in front of it."

Cross-Selling Between Hunter and HBP

CFO Brian Harris highlighted synergies: On the commercial side, Clopay's rolling steel products often go into large warehouses and industrial facilities that also use Hunter's large commercial fans. On the residential side, Hunter developed a garage fan product designed for easy installation.

Capital Allocation Priorities

When asked about use of proceeds, Kramer was emphatic: "We believe that our stock is the best acquisition we can make. Our balance sheet has never been stronger... you should expect us to continue to be an active buyer of our stock, deleveraging from free cash flow and being an increased dividend payer in the future."

Key Takeaways

1. Solid Beat: Griffon delivered across all metrics, with particularly strong EPS performance (+9.0% beat) driven by pricing discipline and CPP margin improvement.

2. Portfolio Transformation: The ONCAP JV for AMES represents a strategic pivot toward a more focused building products company, with Hunter Fan joining HBP.

3. Strong Cash Generation: $99.3 million in free cash flow supports continued debt paydown and shareholder returns.

4. Balance Sheet Improvement: Leverage declined to 2.3x from 2.4x, with $60M in debt reduction and $280M remaining for buybacks.

5. Execution Watch: The key question going forward is execution on the strategic alternatives and JV, along with HBP's ability to manage through residential volume softness.

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Griffon Corporation is a diversified management and holding company operating through Home and Building Products (Clopay garage doors) and Consumer and Professional Products (AMES tools, Hunter Fan, ClosetMaid). For more information, visit griffon.com.