MWA · Mueller Water Products, Inc.

Mueller Water Products delivered a strong fiscal 2026 second quarter, with net sales rising 5.5% to $384.4 million, driven by higher pricing across most product lines and increased volumes. Gross margin expanded 250 basis points to 37.6%, benefiting from pricing, manufacturing efficiencies, and volume, partially offset by tariffs and inflation. Operating income grew 15.0% to $80.4 million, and adjusted operating income rose 16.0% to $84.8 million, with adjusted operating margin reaching 22.1%. Net income increased 15.2% to $59.1 million, and adjusted net income per diluted share rose 17.6% to $0.40. Adjusted EBITDA grew 15.0% to $97.2 million, with margin expanding 210 basis points to 25.3%. Segment performance was mixed: Water Flow Solutions saw modest sales growth of 1.0% but strong margin expansion (adjusted EBITDA margin up 440 bps to 33.2%), while Water Management Solutions grew sales 12.2% with adjusted EBITDA margin slightly declining to 24.4%. Management highlighted disciplined execution, resilient demand, and operational efficiencies. The company raised its fiscal 2026 adjusted EBITDA guidance to $360-$365 million (from prior range) and reiterated net sales guidance of $1,470-$1,490 million. Free cash flow for the first six months was $16.5 million, down from $47.3 million, due to higher capex and working capital. The balance sheet remains strong with $421 million cash and $452.4 million debt, and no near-term maturities. The company noted increased uncertainty from tariffs and potential slowdown in new residential construction but remains focused on driving growth and margin improvement.