Carlisle Companies NYSE: CSL reported first-quarter fiscal 2026 results that reflected lower revenue but improved profitability, as management pointed to winter weather disruptions and the absence of a prior-year tariff-related pull-forward as key headwinds. Leadership also reiterated its full-year outlook, while highlighting recent price increases intended to offset rising petrochemical-linked input costs and freight driven by geopolitical volatility.
First-quarter results: revenue down, margins up
Chairman, President and CEO Chris Koch said first-quarter revenue totaled $1.1 billion, down 4% year over year, attributing the decline primarily to project and shipment delays caused by winter weather across North America and the lack of approximately $15 million in tariff-related Canadian order pull-forward that benefited the first quarter of fiscal 2025.
Despite lower revenue, Koch said Carlisle expanded profitability, emphasizing execution on cost and productivity initiatives. Adjusted earnings per share rose to $3.63, up 1% from a year earlier, while adjusted EBITDA margin expanded 50 basis points to 22.3%.
CFO Kevin Zdimal said adjusted EBITDA was $235 million, and credited the margin gains to “COS-driven productivity gains, procurement discipline, and efficient management of selling and administrative costs.” He added that share repurchases more than offset lower organic earnings and higher interest expense in driving the year-over-year increase in adjusted EPS.
Segment performance: CCM pressured by weather; CWT margin work continues
In Carlisle Construction Materials (CCM), Zdimal reported revenue of $758 million, down 5% year over year, driven by weather-related volume pressure, the absence of the prior-year pull-forward, and continued softness in commercial new construction, partially offset by “solid reroofing growth.” CCM adjusted EBITDA was $208 million, down 4%, but adjusted EBITDA margin improved 30 basis points to 27.4%.
Koch characterized reroofing as a stable demand driver, noting reroofing activity grew “low single digits” and remains the company’s primary revenue engine. He said commercial reroofing accounts for roughly 70% of CCM’s commercial roofing business, supported by an aging installed base and increasing content per square foot from innovations aimed at improving energy efficiency and reducing labor needs.
In Carlisle Weatherproofing Technologies (CWT), Zdimal said revenue was $294 million, down 1% year over year. Contributions from recent acquisitions largely offset volume pressure tied to softness in both residential and non-residential new construction. CWT adjusted EBITDA declined 3% to $45 million, and adjusted EBITDA margin decreased 40 basis points to 15.2% due to lower volumes, partially offset by internal initiatives including footprint consolidation and expanded in-house production of expanded polystyrene resin following the Plasti-Fab acquisition.
During Q&A, Koch said improving CWT profitability was a key focus, with actions including automation, footprint consolidation, and insourcing. He also cited mix as a factor in first-quarter margins, noting a heavier mix toward foam products relative to retail. Zdimal outlined an expected quarterly improvement trajectory, saying CWT could be “around 19%” EBITDA margin in Q2, improving to “23% in Q3,” and that the company’s guidance contemplates “at least 100 basis points of margin improvement year-over-year for CWT.”
Pricing actions and raw materials: targeting neutral price-cost for the year
Management focused heavily on evolving input cost pressures, particularly those linked to oil and petrochemicals. Koch said rising oil prices affected “petrochemical-linked raw materials and freight,” prompting mid-March price increases across both CCM and CWT effective mid-April, along with “real-time freight surcharges.” He also said Carlisle announced a second round of CCM price increases on the day of the call due to “additional cost pressures that disruptions in the petrochemical supply chain are driving.”
Asked about magnitude, Koch said the second increase was similar to the first, “approximately 5%-8%,” following the March announcement. Zdimal said the company expects price-cost dynamics to be neutral for the year, with price intended to offset raw material inflation rather than expand EBITDA dollars. “On price cost for Q2, we’re looking at offsetting any of the cost increases with price,” Zdimal said, adding the same assumption for Q3 and Q4.
Investor Relations VP Mehul Patel quantified the inflation assumption embedded in guidance. With price-cost neutral, Patel said the implied raw material inflation is “about high single digit raw material inflation” as a percentage of raw materials for the full year.
Patel also provided examples of specific input trends:
- MDI (the company’s largest raw material purchase) is up double digits, impacted by supply-demand dynamics and benzene pricing.
- TPO resins linked to propylene are up double digits.
- Polyols are up in the high single-digit range, tied to supply-demand dynamics and diethylene glycol.
On supply, Patel said Carlisle was “in a pretty good position with options” to secure polyol volumes, noting the material has a bigger impact on CWT given the types used in its products.
Demand signals, channel inventory, and product pipeline
Koch said orders improved as the quarter progressed and that Carlisle exited March with better momentum than it had entering the year. He described April activity as encouraging, with reroofing “in line with seasonal norms” and improved backlog conversion as weather disruptions eased, while new construction remained soft due to interest rates and broader uncertainty.
On distribution channel inventory, Koch said the company was moving toward a “more normal inventory situation” heading into construction season after de-stocking trends late last year and continued lean levels in the first quarter. He added that price increases could also influence near-term inventory behavior.
Regarding consolidation among distributors and channel partners, Koch said Carlisle continued to see improvement with QXO, describing “great conversations” and progress post-integration. He also said other industry consolidation dynamics, including a referenced QXO acquisition of TopBuild, were “not as impactful” to Carlisle because the acquired businesses have significant exposure to categories where Carlisle does not participate, such as fiberglass insulation and shingles.
On innovation, Koch said Carlisle expects to release “just over 10-12 new products” in fiscal 2026, highlighting ThermaThin R7 insulation as a major launch. He said the product won two awards at IRE and is undergoing test-site feedback, with deliveries expected to begin “probably July.” He also pointed to a new foam adhesives gun and other products designed to improve energy efficiency and “get labor off the roof,” while tying service improvements to the “Carlisle Experience,” which he described as ensuring the right product is delivered to the right place at the right time.
Cash flow, capital allocation, and reaffirmed outlook
Zdimal said Carlisle ended the quarter with $771 million in cash and cash equivalents and $1 billion available under its revolving credit facility. Net debt-to-EBITDA was 1.7x, within the company’s stated target range of 1x to 2x.
Operating cash flow was seasonally negative, with net cash used in operating activities of $45 million and free cash flow used in continuing operations of $73 million. Zdimal said free cash flow reflected a $125 million post-year-end settlement of an accrued tax-related liability; excluding the payment, operating cash flow improved year over year due to lower working capital use. Carlisle invested $28 million in capital expenditures and returned $296 million to shareholders through $250 million of share repurchases and $46 million of dividends. Zdimal said the company is maintaining its pace toward a $1 billion share repurchase target for fiscal 2026.
Management reiterated its full-year expectations. Koch said Carlisle is reaffirming its fiscal 2026 outlook, citing “low single-digit revenue growth and approximately 50 basis points of adjusted EBITDA margin expansion.” Zdimal also said the company is reaffirming its outlook, while noting that with recent pricing announcements it expects revenue growth at the higher end of its low single-digit range, and “double-digit growth for EPS.” He characterized the guidance as conservative given uncertainty tied to the geopolitical situation.
Looking longer term, Zdimal said the company remains committed to Vision 2030 targets, including $40 of adjusted EPS and 25%+ ROIC, built on organic growth driven by reroofing demand, COS-led margin improvement, disciplined share repurchases, and targeted synergistic M&A.
About Carlisle Companies NYSE: CSL
Carlisle Companies Inc is a diversified global manufacturer serving a broad array of markets with engineered products, systems and solutions. The company's operations span several core business segments, including construction materials, fluid technologies, interconnect technologies, brake and friction systems, and engineered products. Carlisle is known for its expertise in developing high-performance building envelope solutions, precision-engineered hoses and fluid-handling components, lightweight interconnect systems for aerospace and defense, and heavy-duty brake and friction products.
Within its construction materials segment, Carlisle offers single-ply roofing membranes, polyiso insulation, and waterproofing systems designed for commercial and industrial buildings.
Featured Stories
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 Carlisle Companies, 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 Carlisle Companies wasn't on the list.
While Carlisle Companies currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
With the proliferation of data centers and electric vehicles, the electric grid will only get more strained. Download this report to learn how energy stocks can play a role in your portfolio as the global demand for energy continues to grow.
Get This Free Report
