Brady Corporation (BRC) reported fourth-quarter 2026 adjusted earnings per share of $1.48, edging past consensus estimates of $1.47 by roughly 0.7%, while revenue of $436.9 million topped the $427.41 million forecast by about 2.2%. Shares fell 2.32% to $88.09 in premarket trading from $90.18.
The Milwaukee-based identifier manufacturer said organic sales grew 8.4% in the quarter, with acquisitions contributing 1.1% and foreign currency translation adding 0.5%, for total revenue growth of 10% year over year. Gross profit margin expanded to 52.9% from 50.4% a year earlier, with adjusted gross margin rising 110 basis points after factoring in facility consolidation charges and a $4 million tariff refund.
Operating cash flow surged 35.8% to $79.2 million in the quarter, while free cash flow climbed 22.9% to $60.7 million. The company held net cash of $172.2 million as of July 31, more than double the prior-year balance. Shareholders saw $28.1 million returned through repurchases of 333,000 shares at an average price of $84.36.
In the Americas and Asia segment, organic sales jumped 11.6%, driven by a 10.3% gain in the Americas and a 20.3% increase in Asia. Total regional revenue reached a record $296.1 million. Wire identification sales grew nearly 20%, accounting for 20% of regional revenue. Segment profit rose 43.9% to $74.3 million, with profitability as a percentage of sales improving from 19.8% to 25.1%.
Europe and Australia posted slower organic growth of 2.1%, with Europe up 2% and Australia up 3.1%. Region profit climbed 23.9% to $18.7 million, with segment margin expanding to 13.3% from 11%.
Full-year 2026 adjusted diluted EPS rose 15% from fiscal 2025, and operating cash flow increased nearly 35% year over year.
Looking ahead to fiscal year 2027, Brady guided for adjusted diluted EPS between $6.25 and $6.75, implying growth of 18% to 27.6% compared with 2026. The range includes approximately $0.80 of accretion from the Honeywell acquisition, with most of that benefit expected in the second half of the year.
The company expects its legacy Identification Solutions division to deliver organic revenue growth of roughly 5%, with segment profit around 20% of sales. The newly integrated Intelligent Productivity Solutions unit, formed from Honeywell’s Productivity Solutions and Services business, is expected to contribute about $1.15 billion in annual revenue and give Brady the number two position in the automatic identification and data capture market.
Brady targets roughly $25 million in synergies by the third year of ownership and expects net leverage to fall below twice earnings before interest, taxes, depreciation and amortization within two years. Depreciation expense is projected at approximately $45 million, capital expenditures at around $40 million, and the income tax rate at about 21%.
New CEO Vineet Nargolwala, who took the role roughly three months ago after serving on the board and previously working at Honeywell, told analysts the company is pivoting from a traditional industrial maker to an industrial technology company.
“We are entering new markets and immediately garnering the number two market position in the AIDC sector,” Nargolwala said.
David Barker, president of the IPS business unit, said the acquired portfolio strengthens Brady’s capabilities in RFID, printing and scanning technologies.
