Carlisle Companies Incorporated (CSL) Earnings & Analysis

Latest quarter

Carlisle reported Q3 FY2026 revenue of $1.5 billion, above the $1.4 billion consensus, while adjusted earnings per share of $5.92 missed the $5.95 consensus. Revenue rose from $1.3 billion a year earlier, with the filing attributing the increase to higher volumes, price increases and freight surcharges.

Carlisle said Construction Materials revenue grew 8% to $1.1 billion, helped by re-roofing demand and pricing. Weatherproofing Technologies revenue grew 9% to $379 million, as share gains and demand for roof coatings offset softness in new construction.

Gross margin fell to 33.8% from 36.0%, and operating margin declined to 20.0% from 21.8%. The filing attributed the gross-margin decline primarily to higher petrochemical-based raw material, diesel and freight costs that outpaced price increases.

Free cash flow declined to $277.3 million from $393.4 million a year earlier. CFO Kevin Zdimal said the year-over-year decrease primarily reflected higher working capital needs to support increased sales and higher raw material costs.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Chris Koch said demand held through Carlisle’s price increases and freight surcharges. At Construction Materials, he described re-roofing as a continuing mid-single-digit contributor, while new construction remained soft. CFO Kevin Zdimal said channel inventories were normal for the season and October bookings remained strong.

Koch said price realization historically lags cost increases because Carlisle honors existing quotes and firm orders. Further increases in oil, diesel and freight costs pushed back the expected timing of price-cost parity. As Koch put it, “We view the pressure as a timing issue, not a structural one.” He said margin expansion should resume as costs normalize, supported by pricing, productivity and efficiency programs.

Asked about data centers, Koch said Carlisle’s business there grew about 200% in the third quarter. He attributed the growth partly to a dedicated team and greater market awareness, but declined to quantify its dollar contribution. He said the company wanted to become involved earlier in project specifications.

At Weatherproofing Technologies, Zdimal said automation, manufacturing consolidation and in-house resin production were contributing to results. Asked about those investments, investor relations vice president Mehul Patel said they were substantially complete and expected to contribute between $20 and $30 million in 2026, with some benefit carrying into the first quarter of 2027.

On competition, Koch said Carlisle had seen new entrants but no meaningful impact on its volumes. For the quarter ahead, Zdimal said pricing and re-roofing demand should offset slower new construction at Construction Materials, while pricing and share gains should offset end-market softness at Weatherproofing Technologies. Koch added that Carlisle would evaluate further pricing actions if costs remained elevated or increased.

Guidance

Koch said Carlisle now expects to reach price-cost parity as it exits 2026, one quarter later than previously anticipated. On the prior call, he said, the company had expected price and costs to be close to parity in the third quarter and pricing to turn slightly positive against costs in the fourth quarter. He attributed the delay to unanticipated third-quarter cost increases.