Techtronic Industries profit jumps 17.5% as margins hit record

Techtronic Industries Co. Ltd. (00669.HK) reported first-half 2026 net profit of US$738 million, up 17.5 percent from a year earlier, as record gross margins and lower finance costs lifted earnings at the world's largest cordless power-tool maker.

"With the best people and strongest culture, deepest relationships with the core trades and customers, the most robust product roadmap, and the healthiest balance sheet in TTI's history, we are poised to continue leading the industry in the years to come," Executive Chairman Horst Pudwill said.

Revenue rose 5.9 percent to US$8.29 billion in the six months ended June 30, with gross margin expanding 258 basis points to a record 42.9 percent. EBIT climbed 15.9 percent to US$822 million, pushing EBIT margin to 9.9 percent, up 86 basis points and within reach of the company's 10 percent target for 2027. Basic earnings per share rose 17.8 percent to US40.50 cents, while free cash flow reached US$753 million, leaving the group in a net cash position of US$1.066 billion.

The Hong Kong-listed company declared an interim dividend of HK$1.50 per share, up 20 percent from HK$1.25 a year earlier, with a payout ratio of 47.8 percent. Its two core brands, MILWAUKEE and RYOBI, grew at a combined 8.2 percent underlying rate in local currency, with MILWAUKEE up 10.5 percent after adjusting for a planned ERP conversion timing impact and RYOBI up 1.7 percent to US$1.9 billion. The Professional segment, led by MILWAUKEE, delivered sales of US$5.9 billion, up 9.7 percent, while the Consumer segment fell 2.5 percent to US$2.4 billion as the company exited the HART business and rationalized non-core brands, which now account for 6.6 percent of revenue.

Shares rose 7.9 percent to HK$143.50 on turnover of HK$450 million, with the stock trading near its 52-week high. Citi lifted its price target to HK$168 from HK$150 and Nomura raised its target to HK$173 from HK$163, both maintaining Buy ratings. Management raised its 2026 free cash flow target to about US$1.3 billion from more than US$1 billion and commenced a US$500 million share repurchase plan in June, buying back US$42 million of stock through July.

The margin expansion signals management expects tariff-mitigation efforts and a favorable product mix toward higher-margin MILWAUKEE tools to keep driving profitability, even as second-half tariff rates rise to 10 percent to 12.5 percent. Investors will watch the second-half results for whether the group reaches its 10 percent EBIT margin target a year ahead of schedule and how it deploys its growing cash pile through dividends and buybacks.

This article is for informational purposes only and does not constitute investment advice.