Mueller Water Products (MWA) Q2 2026 earnings summary

Executive summary

• Achieved record quarterly net sales of $384.4 million, adjusted EBITDA of $97.2 million, and adjusted net income per diluted share of $0.40, driven by strong brand performance, disciplined execution, and resilient end-market demand.

• Adjusted EBITDA margin expanded by 210 basis points year-over-year to 25.3%, reflecting operational excellence and cost management.

• Raised annual adjusted EBITDA guidance for fiscal 2026 based on strong first-half performance and ongoing operational initiatives.

• Leadership transition occurred in February 2026, with related reorganization charges of $4.4 million excluded from adjusted results.

• Strategic priorities include above-market sales growth, margin expansion, disciplined capital allocation, and investments in commercial and operational capabilities.

Financial highlights

• Net sales for Q2 FY2026 reached $384.4 million, up 5.5% year-over-year, driven by higher pricing and modest volume growth.

• Gross profit increased 12.9% to $144.5 million, with gross margin expanding 250 basis points to 37.6%.

• Adjusted EBITDA was $97.2 million, up 15% year-over-year, with margin expanding to 25.3%.

• Adjusted net income per diluted share rose 17.6% to $0.40.

• Free cash flow for the six-month period decreased to $16.5 million, primarily due to higher working capital and capital expenditures.

Outlook and guidance

• Fiscal 2026 consolidated net sales expected between $1,470 million and $1,490 million, up 2.8% to 4.2% year-over-year.

• Adjusted EBITDA guidance raised to $360–$365 million, up 10.4% to 11.9% year-over-year.

• Adjusted EBITDA margin projected to exceed 24.5% for the year, up 170 basis points.

• Free cash flow as a percentage of adjusted net income expected to exceed 70% in fiscal 2026, reduced from prior outlook due to higher inventory and capex.

• Capital expenditures expected between $60 million and $65 million, focused on growth and operational efficiency.