Armstrong World Industries reported record‑setting full‑year 2025 results, with net sales rising 12.1% to $1,620.8 million and adjusted diluted earnings per share climbing 17.4% to $7.41. The company’s operating income grew 15.1% to $430.9 million, and adjusted EBITDA expanded 14.1% to $555 million, giving a 34.3% margin. Despite the strong annual performance, the fourth‑quarter results fell short of consensus estimates: revenue of $388.3 million missed the $398.58 million estimate, and adjusted diluted EPS of $1.61 fell short of the $1.67 consensus.
In the fourth quarter, revenue was $388.3 million, a 5.6% year‑over‑year increase, but it was 2.6% below analyst expectations. Adjusted diluted EPS of $1.61 was $0.06 lower than the $1.67 consensus, a miss of 3.6%. The shortfall was driven by a 2.5% decline in Mineral Fiber sales, which were pressured by a federal government shutdown and softer home‑center demand, and by higher operating costs in the Architectural Specialties segment as the company integrated recent acquisitions. The Mineral Fiber segment still delivered a 23.7% operating margin, up 140 basis points, while the Architectural Specialties segment saw a 5.2% decline in operating income due to increased SG&A and manufacturing costs.
The full‑year results were underpinned by a 12.1% rise in net sales, largely from a 15% increase in Mineral Fiber revenue and a 20% jump in Architectural Specialties sales driven by acquisitions such as 3form and Eventscape. Operating income margin expanded 70 basis points to 34.3%, reflecting pricing power in the Mineral Fiber segment and improved manufacturing productivity. Adjusted EBITDA margin grew 160 basis points to 32.0% in Q4, and the company’s free cash flow reached $346 million, a 15.9% increase, underscoring strong cash‑generation capability.
Armstrong’s 2026 guidance projects net sales of $1.745 billion to $1.785 billion, adjusted EBITDA of $600 million to $620 million, diluted EPS of $8.05 to $8.35, and adjusted free cash flow of $375 million to $395 million. The guidance reflects confidence in continued double‑digit growth, but the EPS range is slightly below the consensus estimate of $8.45, indicating modest headwinds in the near term. Management highlighted that the guidance assumes stable demand in the Mineral Fiber segment and continued integration of Architectural Specialties acquisitions, while acknowledging potential cost pressures.
During the earnings call, President and CEO Vic Grizzle announced that he will transition to Executive Chair, with Mark Hershey taking over as President and CEO effective April 1, 2026. Grizzle said, “These results represent another strong year for Armstrong with record‑setting sales and earnings for both the quarter and the full year as the key fundamental growth drivers of our business – Mineral Fiber average unit value growth, productivity and Architectural Specialties sales growth – were on full display.” Hershey added that the company remains focused on operational excellence and strategic investments to sustain growth.
Investors reacted to the fourth‑quarter miss on revenue and adjusted EPS, which outweighed the positive full‑year performance and forward guidance. The miss highlighted short‑term headwinds from a federal shutdown and softer home‑center demand, while the company’s strong margin expansion and cash‑flow generation reinforced confidence in its long‑term trajectory.
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