Zurn Elkay Q2 Sales Surge 10% to $491M, Tariff Refund Boosts Margins
ZWS sits 35% above its 52-week low of $37.89.
Summary
Zurn Elkay's Q2 2026 revenue jumped 10% to $491M, exceeding estimates, aided by a $47.6M tariff refund. The company bought back $99.6M in stock and announced a $108.5M acquisition of Intellihot.
Key Events · Earnings and Guidance · ZWS
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Q2 Revenue Beats Consensus
Net sales rose 10% YoY to $491M, exceeding the $483M consensus estimate. Core sales grew 10% across all product categories.
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Tariff Refund Lifts Margins
A $47.6M IEEPA reciprocal tariff refund was recognized as a reduction in cost of sales, boosting gross margin. Excluding this item, operating income still increased 380 bps YoY.
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Aggressive Share Buybacks Continue
The company repurchased 2.1M shares for $99.6M in H1 2026 at an average price of $47.98. $382.5M remains under the current authorization.
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Credit Facility Expanded
The revolving credit facility was increased from $200M to $550M and its maturity extended to February 2031, enhancing liquidity.
Analysis · ZWS · Technology
A standout quarter for Zurn Elkay saw sales climb 10% to $491 million, comfortably ahead of the $483 million consensus. Margins got a lift from a one-time $47.6 million tariff refund, yet even without that benefit, operating income expanded sharply on higher volumes and productivity gains. The company stayed aggressive on capital deployment, buying back $99.6 million in stock during the first half and upsizing its credit facility to $550 million. After the quarter closed, the $108.5 million acquisition of Intellihot added tankless water heating technology, broadening the product portfolio. A director retirement was also disclosed.
At the time of this filing, ZWS was trading at $51.00 on NYSE in the Technology sector, with a market capitalization of approximately $8.2B. The 52-week trading range was $37.89 to $53.76. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.