Executive Summary

Q3 FY2025 was pressured by severe weather, FX headwinds, and transitional plant consolidation costs: revenue $1.48B (-3.0% YoY), GAAP diluted EPS $0.40, adjusted EPS $0.35, EBIT $62.7M, adjusted EBIT $78.2M .
Versus S&P Global consensus, RPM missed: revenue $1.48B vs $1.51B*, adjusted EPS $0.35 vs $0.50*; 13 EPS and 12 revenue estimates were outstanding*, driven by under-absorption from lower volumes and FX .
Cash flow execution remained a bright spot (Q3 operating cash flow $91.5M; second-highest third quarter historically), with operating working capital/sales improving 70 bps to 20.7% and total debt reduced to $2.10B .
Q4 FY2025 guidance: consolidated sales flat YoY; adjusted EBIT up low-single digits; PCG mid-single-digit growth; CPG flat; SPG and Consumer low-single-digit declines; tariffs expected to lift raw material inflation from low- to mid-single digits .

What Went Well and What Went Wrong

What Went Well
- “By prioritizing cash flow over profitability, we generated another quarter of strong cash flow… inventories declined $36 million versus last year” .
- Fiberglass reinforced plastic structures (PCG) grew double digits, supported by data center demand .
- Announced definitive agreement to acquire The Pink Stuff (~£150M CY2024 sales), expanding Consumer cleaners globally and across e-commerce/grocery/drug channels .
What Went Wrong
- Unseasonably cold weather (southern U.S.) and wildfires (west) reduced construction and outdoor project activity; foreign currency and eight plant consolidation transitions pressured margins .
- Seasonally low quarter magnified under-absorption from disciplined inventory draw-down; corporate/other expenses rose on higher M&A and compensation .
- SPG faced lower specialty OEM and disaster restoration demand; Consumer experienced raw material inflation (packaging/solvents) and under-absorption from lower production .

Financial Results

Metric	Q1 FY2025 (Aug 31, 2024)	Q2 FY2025 (Nov 30, 2024)	Q3 FY2025 (Feb 28, 2025)
Net Sales ($USD)	$1,968,789,000	$1,845,318,000	$1,476,562,000
EBIT ($USD)	$303,859,000	$227,633,000	$62,678,000
Adjusted EBIT ($USD)	$328,342,000	$255,076,000	$78,236,000
Diluted EPS (GAAP)	$1.77	$1.42	$0.40
Adjusted Diluted EPS	$1.84	$1.39	$0.35
Operating Cash Flow (Quarter)	$248,059,000	$279,400,000	$91,500,000

Segment sales and earnings (Q3 YoY):

Segment	Net Sales Q3 FY2024	Net Sales Q3 FY2025	Adjusted EBIT Q3 FY2024	Adjusted EBIT Q3 FY2025
CPG	$495,753,000	$473,408,000	$20,487,000	$12,730,000
PCG	$343,536,000	$340,625,000	$47,092,000	$43,789,000
SPG	$176,494,000	$158,737,000	$12,101,000	$6,716,000
Consumer	$507,199,000	$503,792,000	$64,994,000	$54,184,000

KPIs and balance sheet:

KPI	Current	Prior
Operating Working Capital / Sales (%)	20.7% (9M FY2025)	21.4% (9M FY2024)
Total Debt ($USD)	$2.10B (Feb 28, 2025)	$2.19B (Feb 29, 2024)
Total Liquidity ($USD)	$1.21B (Feb 28, 2025)	$1.29B (Feb 29, 2024)
Dividend	Declared $0.51 per share payable Apr 30, 2025	Prior increase of 11% in Oct 2024

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated Sales	Q3 FY2025	Flat YoY	Actual: -3.0% YoY	Miss vs guide
Consolidated Adjusted EBIT	Q3 FY2025	Up or down low-single digits YoY	Actual: down 29.0% YoY	Miss vs guide
Consolidated Sales	Q4 FY2025	—	Flat YoY	New quarterly outlook
Adjusted EBIT	Q4 FY2025	—	Up low-single digits YoY	New quarterly outlook
CPG Sales	Q4 FY2025	—	Flat YoY	New
PCG Sales	Q4 FY2025	—	Mid-single-digit increase YoY	New
SPG Sales	Q4 FY2025	—	Low-single-digit decline YoY	New
Consumer Sales	Q4 FY2025	—	Low-single-digit decline YoY	New
FY2025 Sales	Full Year	Low-single-digit growth	Unchanged (not reiterated in Q3 release)	Maintained prior
FY2025 Adjusted EBIT	Full Year	+6% to +10%	Unchanged (not reiterated in Q3 release)	Narrowed in Q2, maintained

Earnings Call Themes & Trends

Topic	Q1 FY2025	Q2 FY2025	Q3 FY2025	Trend
Weather impact	No-growth macro; Q2/Q3 seasonality commentary	“Real winter” expected to pressure Q3	Severe cold/wildfires cut activity; March only marginal improvement	Deteriorated in Q3, improving into Q4
MAP 2025 execution	Record adjusted EBIT; SG&A streamlining; manufacturing efficiency	Record adjusted EBIT; continuous cash cycle gains	Benefits masked by under-absorption; $28M MAP savings noted	Structural progress; leverage returns with volume
Tariffs/raw material inflation	Neutral commodity cycle; modest H2 raw inflation expected	Inflation to ~1.5–2%; preparedness for tariffs/port strike	Tariff impact ~3.2% global, ~4.3% U.S.; mitigation plans; mid-single-digit raw inflation expected	Inflation risk rising; mitigations active
High-performance buildings/data centers	Pivot to high-performance, strong backlog	PCG benefiting; easier comps in Q4	Double-digit FRP demand; backlog strong	Structural demand intact
Consumer demand/new products	DIY weak; margin expansion via mix	Stabilization; targeted campaigns; bad debt hit	New launches (Mean Green), low odor aerosol; cautious consumer	Stabilizing; innovation-led
Plant consolidations/under-absorption	Startups/COE investments impacting P&L	Consolidations progressing	Transitional costs continue; temporary redundancies to maintain service	Near-term headwind; long-term efficiency
Europe progress	Profitability despite lower sales; MAP rollout	Strong PCG Europe growth via collaboration	COE opened; consolidations; centralized distribution (Belgium)	Improving profitability

Management Commentary

“The unfavorable weather conditions we discussed in early January continued and became more widespread… Unseasonably cold weather in the southern U.S. and wildfires in the west reduced demand…” .
“By prioritizing cash flow over profitability, we generated another quarter of strong cash flow… inventories declined $36 million versus last year.” .
“We anticipate… modest earnings growth in the fourth quarter… with the financial benefits of MAP 2025 becoming even more evident when sustained volume growth returns.” .
On tariffs: “Unmitigated impact… about 3.2%, larger in the U.S. about 4.3%… ~$74–$75M on a $2.5B spend. Mitigations include Annex 2 exemptions, alternative sourcing, vendor partnerships, product substitutions, and price increases.” .

Q&A Highlights

Macro and guidance: management sees a “low growth, no growth” environment continuing; a return to profitable growth in Q4 driven by self-help, share gains, and new products .
Operating rates: organic growth down 1.8%; lower production to reduce inventories drove under-absorption of fixed costs (DIO down ~8 days YTD) .
Tariffs detail: quantified impact and mitigation; highlighted predatory domestic metal pricing behavior; expect to offset most inflation via sourcing and pricing .
Backlog: roofing/WTI backlog remains strong; projects largely pushed from Q3 to Q4; PCG backlog solid near-term .
Corporate expense: non-op running ~$35M/quarter; elevated in Q3 due to M&A costs; likely above $35M in Q4 .
M&A appetite: pipeline improving; multiples down; Pink Stuff structured with ~20% earnout to sales/profit targets .

Estimates Context

Metric	S&P Global Consensus	Actual	Beat/Miss
Revenue ($USD)	$1,507,226,390*	$1,476,562,000	Miss
Adjusted/Primary EPS ($USD)	$0.49547*	$0.35	Miss
EPS – # of estimates	13*	—	—
Revenue – # of estimates	12*	—	—

Values retrieved from S&P Global.*

Implications: Results likely prompt near-term estimate revisions lower given Q3 shortfall and Q4 guide to low-single-digit adjusted EBIT growth; management highlighted tariff-driven mid-single-digit raw inflation and ongoing plant consolidation transitions, which may temper near-term margin expectations while structural MAP benefits re-accelerate with volume .

Key Takeaways for Investors

Expect modest Q4 earnings growth with a flat sales backdrop; PCG strength and backlog should lead, while Consumer and SPG remain soft near-term .
Structural MAP 2025 gains are intact; leverage will improve as volumes normalize (watch weather normalization and seasonality) .
Raw material inflation risks rising to mid-single digits from tariffs; RPM’s mitigation playbook (sourcing shifts, pricing) should limit P&L impact .
Cash discipline is a differentiator (Q3 CFO $91.5M; OWC down 70 bps); debt down to $2.10B supports M&A and dividend continuity .
Pink Stuff acquisition is strategically accretive to Consumer cleaners, expanding channels (e-commerce/grocery/drug) with above-average margin profile; closing expected late Q4 or early Q1 FY2026 .
Watch PCG’s data center/building envelope exposure (double-digit FRP) for growth resilience; CPG system-selling supports repair/maintenance thesis in tight budgets .
Near-term trading: Q3 miss vs consensus and cautious Q4 guide may cap upside until visibility improves; catalysts include normalization of activity, tariff mitigation execution, and M&A additions .

RPM INTERNATIONAL INC/DE/ (RPM)·Q3 2025 Earnings Summary