Reliance Steel & Aluminum Co. reported fourth‑quarter 2025 results that were largely in line with revenue expectations but fell short on earnings, with non‑GAAP diluted earnings per share of $2.40 versus a consensus estimate of $2.80, a miss of $0.40 or 14.3%. The miss was driven by a significant LIFO expense of $38.7 million, a swing from the $113.7 million LIFO expense recorded for the full year, and higher aluminum costs that increased the LIFO charge for the quarter.
Net sales reached $3.4986 billion, essentially matching the $3.43 billion estimate and representing an 11.9% year‑over‑year increase from $3.13 billion in Q4 2024. The top‑line growth was supported by record tons sold—6.4 million, up 6.2% YoY—which lifted the company’s domestic market share to about 17% from 15% in 2024. The volume gain was largely driven by strong demand in construction and manufacturing, offset by inventory overhangs in aerospace and semiconductor markets that pressured margins.
Non‑GAAP FIFO pretax income rose 28.2% to $205.6 million, reflecting higher pricing power in core segments. However, the LIFO expense and inventory overhangs compressed the overall margin, with the LIFO gross profit margin declining as the company carried higher aluminum costs into the quarter. Management noted that the LIFO accounting method contributed to margin pressure and that the pressure is expected to ease as the company moves through 2026.
For the first quarter of 2026, Reliance guided for non‑GAAP EPS of $4.50 to $4.70 and a 5%–7% increase in tons sold, a range that aligns with analyst expectations and signals confidence in a sequential rebound. The guidance reflects management’s view that demand will continue to strengthen while the company’s domestic supply chain advantage and market share gains will support earnings growth.
Management emphasized its commitment to “smart, profitable growth.” CEO Karla Lewis said, “Our commitment to smart, profitable growth drove full‑year shipments to a record 6.4 million tons sold, representing a significant increase in our domestic market share to about 17% from 15% in 2024.” She also noted, “We expect this pressure to ease as we move through 2026. Finally, the impact of our LIFO accounting method also contributed to margin pressure this quarter.”
The earnings miss and margin compression highlight the company’s exposure to raw‑material cost volatility and inventory dynamics, but the record volume and market‑share gains suggest underlying operational strength. Investors will likely focus on how the company manages LIFO expense and inventory overhangs while maintaining growth momentum in the coming quarters.
The company’s strong capital allocation program—share repurchases of $594.1 million in 2025 and a dividend increase to $1.25 per share—underscores its commitment to returning value to shareholders despite the earnings miss.
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