Griffon Fiscal Q3 2026 Earnings: Revenue Rises 7% as Margins Narrow

Griffon Corporation (NYSE: GFF) reported fiscal third-quarter 2026 revenue of $481.4 million, up 7% from $449.7 million, while diluted EPS from continuing operations was $1.47 versus a loss of $2.40 per share a year earlier. For the quarter ended June 30, favorable pricing and product mix produced most of the growth, but higher material and SG&A costs limited the increase in adjusted EBITDA and compressed margins.

Core earnings data

Favorable price and mix contributed six percentage points to revenue growth, while volume added one point, primarily from residential demand. Gross profit and adjusted EBITDA both increased more slowly than revenue, indicating that the additional sales did not fully translate into margin expansion.

The GAAP comparison was affected by a $243.6 million goodwill and intangible asset impairment in the prior-year quarter. Adjusted EPS therefore provides a more comparable view of the underlying improvement.

NM means the comparison is not meaningful because the prior-year period recorded a loss.

Pricing and mix drove most of the revenue increase

Griffon attributed the 7% revenue increase primarily to a 6% favorable price-and-mix contribution across both residential and commercial products. Volume added only 1%, with the increase coming mainly from residential products.

That mix shows that pricing and product composition, rather than broad-based unit growth, were the main operating drivers. Residential volume provided additional support, but the release did not disclose separate residential and commercial revenue figures.

Profitability, cash flow, and the balance sheet

Gross margin declined to approximately 47.0% from 48.7%. Adjusted EBITDA margin also narrowed to about 25.9% from 27.2%, as higher material and selling, general and administrative costs partly offset revenue growth. SG&A expense increased to $110.6 million from $107.3 million.

Cash-flow figures in the release cover the first nine months of fiscal 2026 rather than the quarter alone. Continuing operations generated $217.9 million of operating cash flow and $194.2 million of free cash flow after $23.7 million of net capital expenditures. Nine-month operating cash flow was lower than the prior-year figure of $234.5 million.

Griffon ended June with $110.4 million of cash, approximately $1.3 billion of total debt, and $1.2 billion of net debt. The company reduced debt by about $137.0 million during the quarter, bringing net debt-to-EBITDA leverage to 2.2 times from 2.5 times a year earlier and 2.4 times at the end of fiscal 2025. Revolving-credit availability was $472.3 million.

During the quarter, Griffon repurchased 626,000 shares for $53.2 million, or an average of $85.00 per share. Another $193.8 million remained under its authorized repurchase program at quarter-end.

The prior-year impairment explains most of the GAAP earnings swing

Griffon moved from a $108.7 million continuing-operations loss to $66.3 million of income, but the reversal was primarily a comparability effect. Fiscal Q3 2025 included the $243.6 million impairment charge, whereas the current quarter did not have a similar expense.

The adjusted figures show a more moderate operating improvement: adjusted income from continuing operations increased by about $3.5 million to $68.0 million, and adjusted EBITDA rose by about $2.5 million to $124.8 million. The gap between the GAAP rebound and these smaller adjusted gains is important when assessing the quarter’s underlying earnings trajectory.

Joint ventures complete the shift to a building-products pure play

Griffon completed the AMES North America joint venture on June 9, receiving $100 million in cash, a $161 million second-lien payment-in-kind debt receivable, and a 43% equity interest. The transaction occurred before quarter-end and contributed to the company’s restructured balance sheet.

After the quarter, on July 31, Griffon completed the AMES Australasia joint venture. It received $181 million in cash, a $49 million payment-in-kind note, and a 49% equity interest. Together, the two transactions provided $281 million in cash and $210 million in notes while leaving Griffon with minority stakes in both ventures.

Management said these strategic actions were substantially complete and described Griffon as a pure-play building products company. Because the Australasia transaction closed after June 30, its proceeds were not included in the reported quarter-end cash balance.

Fiscal 2026 guidance

Griffon expects fiscal 2026 continuing-operations revenue of $1.8 billion and adjusted EBITDA of $458 million. Interest expense is now projected at $80 million, reflecting lower debt and interest income from transaction-related notes receivable.

Based on the reported nine-month results, the full-year outlook implies approximately $442.5 million of fourth-quarter revenue and $126.2 million of fourth-quarter adjusted EBITDA. These are calculated amounts based on rounded annual guidance, not separate company forecasts.

Recent insider transactions

Over the reported six-month period, insiders purchased 14,400 shares across 11 transactions and sold 183,792 shares across 13 transactions, resulting in net sales of 169,392 shares. That represented 1.90% of the 8.58 million shares reported as held by insiders. The records below are presented objectively and do not establish the reasons for any transaction.

Risks investors should monitor

• Margin pressure: Material and SG&A costs already caused gross and adjusted EBITDA margins to decline despite higher revenue. Further input-cost increases, including potential tariff effects, could create additional pressure.
• Limited volume contribution: Volume accounted for only one percentage point of quarterly growth. Softer residential or commercial building-product demand would leave results more dependent on pricing and product mix.
• Debt and interest costs: Net leverage improved to 2.2 times, but Griffon still had approximately $1.2 billion of net debt and expects $80 million of fiscal 2026 interest expense.
• Joint-venture value realization: Consideration from the AMES transactions includes $210 million of payment-in-kind notes and minority equity interests, making the performance and value of the joint ventures relevant to future balance-sheet outcomes.

Summary

Griffon’s fiscal third quarter produced 7% revenue growth, driven mainly by pricing and mix, while adjusted earnings increased at a slower rate and margins narrowed under higher material and SG&A costs. Debt reduction and the completion of the AMES joint ventures strengthened the company’s transition to a building-products-focused structure. The main items to monitor are fourth-quarter execution against the full-year outlook, margin performance, leverage reduction, and the value generated from the retained joint-venture interests and notes.