Stella-Jones (SJ) Q2 2026 earnings summary

Executive summary

• Q2 2026 sales reached $1,042 million (CAD 1.042 billion), a slight increase from Q2 2025, driven by utility products and the Brooks acquisition, with strong demand across infrastructure markets.

• Operating income declined to $95 million from $155 million year-over-year, impacted by $32 million in network optimization and restructuring charges.

• Adjusted EBITDA was $167 million (16.0% margin), down from $189 million (18.3%) in Q2 2025, reflecting cost pressures, operational inefficiencies, and non-recurring items.

• Cash flow from operations was robust at $192 million, supporting net debt reduction and strong liquidity of $759 million at quarter-end.

• Integration of recent acquisitions, especially crossarms, is progressing well and contributing to results.

Financial highlights

• Gross profit for Q2 2026 was $186 million (17.9% margin), down from $206 million (19.9%) in Q2 2025, mainly due to higher site-specific and fuel costs.

• Net income for Q2 2026 was $61 million ($1.12 per share), compared to $106 million ($1.91 per share) in Q2 2025; adjusted net income was $87 million ($1.59 per share).

• Year-to-date sales reached $1,833 million, up from $1,807 million in the prior year period.

• Net debt-to-adjusted EBITDA at quarter-end was 2.5x, with net debt reduced by over $100 million in H1.

• Available liquidity at quarter-end was $759 million.

Outlook and guidance

• Margin performance is expected to improve in H2 2026 as cost pressures moderate, but full-year adjusted EBITDA margin will remain below the 17.5%-18.5% three-year target.

• Confident in achieving three-year average adjusted EBITDA margin objectives of 17.5%-18.5% for 2026-2028, supported by optimization and pricing actions.

• Utility pole volume growth guided to mid-single digits for the full year, despite Q2 weather impacts.

• Residential lumber sales expected to remain within $600-650 million for the year.

• Operational improvement initiatives in poles and ties expected to deliver full benefits starting in 2027.