James Hardie Q1 FY27 Pro Forma Sales Up 12%, View Raised

James Hardie Industries plc (ASX:JHX) reported results for the first quarter ended 30 June 2026. Group net sales were $1,474.6 million, an increase of 64%, with pro forma net sales up 12%; the company said both sales and adjusted EBITDA were ahead of its original guidance. Operating income rose 57% to $217.7 million at a margin of 14.8%, down 60 basis points, and net income rose 67% to $104.3 million, giving diluted earnings per share of $0.18. Adjusted net income was $209.3 million and adjusted EBITDA was $422.1 million at a margin of 28.6%, up 230 basis points; adjusted EBITDA rose 79% against reported Q1 FY26 and 16% against pro forma Q1 FY26 of $363.2 million. From the first quarter of FY27 the company revised its non-GAAP definitions to exclude share-based compensation costs, with prior periods recast. Siding & Trim net sales rose 34% to $859.8 million, or 20% on an organic basis, with an adjusted EBITDA margin of 33.5%. Deck, Rail & Accessories net sales were $305.1 million, down 5% on a pro forma basis, and the segment recorded an operating loss of $3.3 million and an adjusted EBITDA margin of 27.1%; the company said the volume decline reflected a planned reduction in production and shipments to align channel inventory with end-market demand rather than any weakening in the underlying category, with total sell-through approaching double digit growth. Australia & New Zealand net sales rose 26% to $153.3 million, or 14% in Australian dollars to A$216.0 million, and Europe net sales rose 15% to $156.4 million, or 12% in euros.

First quarter operating cash flow was $344.0 million, up from $206.9 million a year earlier, and after capital expenditure of $89.8 million free cash flow was $254.2 million, more than double the prior year. The company raised its full year FY27 outlook, targeting pro forma sales growth of 5.9% to 9.0% and pro forma adjusted EBITDA growth of 7.4% to 13.7%, with updated full year planning assumptions of total net sales of $5.564 billion to $5.723 billion and total adjusted EBITDA of $1.536 billion to $1.625 billion. The free cash flow target of at least $500 million was reaffirmed, and the company is targeting less than 2.0x net leverage by the end of the second quarter of FY2028. Second quarter guidance assumptions are total net sales of $1.485 billion to $1.575 billion and total adjusted EBITDA of $420 million to $455 million. Chief Executive Aaron Erter said the first quarter results reflected disciplined execution and above-market growth rather than a meaningful improvement in the underlying U.S. housing market, and that the company is not assuming a housing market improvement.