Armstrong World Industries NYSE: AWI reported record second-quarter net sales and adjusted EBITDA, as growth in its Mineral Fiber and Architectural Specialties segments helped offset what management described as muted market conditions.
Total company net sales increased 11% from a year earlier, while adjusted EBITDA rose 8% and adjusted diluted earnings per share increased 13%, CEO Mark Hershey said on the company’s second-quarter 2026 earnings call. Hershey said the results came in modestly above the company’s expectations despite commercial-market conditions that remained largely flat from the first quarter.
Mineral Fiber Sales Rise on Pricing, Mix and Volume
Mineral Fiber net sales increased 8%, supported by 6% average unit value, or AUV, growth and 2% volume growth. Hershey said both pricing and product mix contributed to AUV gains, with continued demand for higher-end smooth white acoustical tile products.
The quarter marked the fourth time in the past five quarters that the segment generated volume growth, according to Hershey. He attributed the performance to commercial execution, customer relationships and growth initiatives, including the company’s digital sales and design-service platforms.
Mineral Fiber adjusted EBITDA increased 7%, and the segment’s adjusted EBITDA margin was 44.7%. CFO Chris Calzaretta said higher AUV, higher sales volume and a positive contribution from the Worthington Armstrong Venture, or WAVE, joint venture were partly offset by freight and raw-material inflation and increased selling, general and administrative expenses.
Management continues to expect a Mineral Fiber adjusted EBITDA margin of approximately 44% for the full year. Hershey said this would represent a record result for the segment and its fourth consecutive year of margin expansion.
The company said its Kanopi online selling platform and ProjectWorks automated design service continued to gain traction. Hershey said Kanopi is serving small businesses as well as companies with multiple locations that want a standardized purchasing path for approved ceiling materials. ProjectWorks, meanwhile, has contributed to higher quoted values and fulfilled projects, supporting both AUV and sales volume.
Data Centers and Energy Efficiency Remain Growth Priorities
Armstrong highlighted energy-efficient products and data-center solutions as key areas of investment. Hershey said the company’s TEMPLOK energy-saving ceiling tile initiative has generated a project-opportunity pipeline that more than doubled from the end of the first quarter.
In data centers, Armstrong has expanded beyond traditional ceiling tile and acoustical grid products used in office areas. Its offerings now include structural grid and containment solutions through the WAVE joint venture. Hershey said 2026 data-center project wins through the second quarter increased more than 50% from the prior year.
Management said it is investing in commercial resources and research and development to broaden awareness of its data-center capabilities among hyperscalers, co-location providers and other owners. Hershey said the data-center market has a more diverse and fragmented competitive environment, particularly for structural and containment products used in computing areas.
Architectural Specialties Delivers Broad-Based Growth
Architectural Specialties net sales rose 17%, including 9% organic growth and contributions from the February acquisition of Eventscape and the 2025 acquisitions of Parallel and Geometrik. The segment’s adjusted EBITDA increased 10%, and its adjusted EBITDA margin reached 20.4%.
Calzaretta said the segment benefited from $5 million of higher organic sales and $4 million related to recent acquisitions. Those gains were partly offset by a $4 million increase in SG&A expenses and a $2 million increase in manufacturing costs. The manufacturing-cost figure included a $2 million benefit from IEEPA tariff refunds.
On an organic basis, Architectural Specialties posted a 21.4% adjusted EBITDA margin, roughly flat from a year earlier and meaningfully improved from the first quarter. Management maintained its expectation for a full-year adjusted EBITDA margin of about 19% for the total segment and increased its organic margin outlook to about 20%.
Second-quarter order intake in Architectural Specialties continued at a double-digit rate, providing support for the company’s second-half expectations and early visibility into its 2027 backlog. Hershey said demand was broad-based across product categories and project types, with transportation, education, office and healthcare among the active verticals.
The company cited additional project activity at JFK, San Francisco International and Los Angeles International airports, along with new wins at San Antonio International Airport and with the Ohio Department of Transportation.
Company Raises 2026 Outlook and Expands Buyback Authorization
Following first-half performance, Armstrong raised the midpoints of its full-year guidance ranges. The company now expects total net sales growth of 9% to 11%, compared with prior guidance of 8% to 10%, and adjusted EBITDA growth of 9% to 12%, compared with 8% to 12% previously.
- Mineral Fiber sales growth is expected to be approximately 7%, including about 1 percentage point of volume growth and approximately 6% AUV growth.
- Architectural Specialties sales growth is expected to be 15% to 17%.
- Adjusted diluted earnings-per-share growth is expected to be 12% to 15%.
- Adjusted free-cash-flow growth is expected to be 10% to 14%.
Calzaretta said the revenue-guidance increase at the midpoint amounted to about $20 million, with roughly two-thirds attributable to Architectural Specialties and one-third to Mineral Fiber. Management said the revised outlook was primarily driven by better-than-expected second-quarter results, while its outlook for market conditions in the second half remained broadly consistent with the first half.
The company returned capital to shareholders through $15 million in second-quarter dividends and $75 million in share repurchases. Year-to-date dividends totaled $30 million and share repurchases totaled $135 million. Armstrong’s board also added $800 million to its repurchase authorization and extended the program through 2029.
Management said it expects continued inflation in freight, raw materials and energy costs, with freight inflation projected in the mid-teens for the full year. However, the company said it remains focused on commercial execution, investments in growth initiatives and disciplined capital allocation amid ongoing macroeconomic uncertainty.
About Armstrong World Industries (NYSE:AWI)
Armstrong World Industries, Inc is a leading global manufacturer of commercial ceiling and wall solutions. The company offers a diverse portfolio of acoustical, decorative and specialty ceiling systems designed to enhance interior environments in offices, healthcare facilities, schools, retail outlets and other non-residential settings. Through its focus on performance, aesthetics and sustainability, Armstrong World Industries addresses both functional and design requirements for architects, contractors and building owners.
Armstrong's product range includes mineral fiber, fiberglass, wood wool, metal and stone wool ceiling panels, as well as suspension and grid systems.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Armstrong World Industries, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Armstrong World Industries wasn't on the list.
While Armstrong World Industries currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
The space race is growing fast, and you don’t have to have gotten in early on SpaceX to profit. This report shows seven space stocks you can buy today that may grow as rockets, satellites, defense, space internet, and new space technology become more important.
Get This Free Report
