Brady (BRC) Q3 2026 earnings summary

Executive summary

• Achieved strong revenue and net income growth for the quarter and nine months ended April 30, 2026, driven by organic sales, acquisitions, and favorable currency impacts.

• Achieved record adjusted EPS in fiscal Q3 2026, with strong organic and acquisition-driven sales growth.

• Announced a $1.4 billion pending acquisition of Honeywell's Productivity Solutions and Services (PSS) business, expected to close in the second half of 2026.

• Continued focus on operational efficiency, digital transformation, and integration of recent acquisitions.

• Net income and cash flow from operations both increased significantly year-over-year.

Financial highlights

• Net sales increased 13.8% year-over-year to $435.2 million for the quarter and 9.7% to $1,224.7 million for the nine months; organic sales up 8.2%, acquisitions 2.1%, FX 3.5%.

• Gross margin rose to 51.8% for the quarter and 51.3% for the nine months, up from 51.0% and 50.2% respectively.

• Operating income grew 9.0% to $73.2 million for the quarter and 14.7% to $203.4 million for the nine months.

• Net income increased to $57.8 million for the quarter and $159.8 million for the nine months, with diluted EPS of $1.21 and $3.35, respectively; adjusted net income for Q3 was $71.9 million, adjusted diluted EPS $1.50.

• Cash flow from operations was $164.9 million for the nine months, with cash and equivalents at $175.5 million as of April 30, 2026.

Outlook and guidance

• Expects to close the PSS acquisition in the second half of 2026, funded by cash and new debt financing.

• Fiscal 2026 GAAP EPS guidance raised to $4.66–$4.76; adjusted EPS guidance raised to $5.20–$5.30, assuming a 21% tax rate, $44M depreciation/amortization, $45M capex, and continued economic growth.

• Guidance excludes any impact from the pending PSS acquisition.

• Anticipates continued investment in organic growth, acquisitions, and operational efficiency.

• Management believes liquidity and financial resources are sufficient to support growth and manage macroeconomic risks.