Key Takeaways:
Techtronic Industries reported H1 2026 net profit of $738 million, up 17.5% year on year, as gross margin hit a record 42.9%.
"After delivering a 9.9% EBIT margin in the first six months, our confidence in meeting or exceeding our internal target of 10 percent EBIT margin by 2027 has only increased," Chief Executive Steve Richman said.
Revenue rose 5.9% to $8.3 billion, with Milwaukee and Ryobi together growing 8.2% on an underlying basis in local currency. Milwaukee grew 10.5% while Ryobi rose 1.7% to $1.9 billion. EBIT increased 15.9% to $822 million, with margin up 86 basis points to 9.9%. The board declared an interim dividend of HKD1.50 per share, up 20%, with a payout ratio of 47.8%.
Shares rose 7.9% to HKD143.5 on the results. Management raised its 2026 free cash flow target to more than $1.3 billion and reaffirmed the 10 percent EBIT margin goal for 2027. Citi lifted its price target to HKD168 from HKD150, and Nomura to HKD173 from HKD163, both keeping Buy ratings.
The company, which changed its reporting structure to professional and consumer segments, said the professional business led by Milwaukee delivered sales of $5.9 billion, up 9.7%, with EBIT margin up 57 basis points to 10.5%. The consumer segment, led by Ryobi, posted sales of $2.4 billion, down 2.5%, but lifted EBIT margin 133 basis points to 8.5% as it exited the HART brand and trimmed non-core floor care lines. Non-core businesses now make up 6.6% of revenue, down 19.4% in local currency.
TTI generated $753 million of free cash flow in the half, up $285 million, and ended the period with a net cash position of $1.066 billion. In June it began a $500 million share buyback, repurchasing $41.5 million of stock through July. Gross margin expansion of 163 basis points on a normalized basis came from annualized tariff-mitigation work, favorable mix toward higher-margin Milwaukee products, and margin gains in Europe and Australia, offsetting higher commodity and freight costs.
The guidance raise points to continued cash generation from the two core brands, which now account for 93% of sales. Investors will watch the second-half earnings call for updated segment margins and any tariff refunds, which management said it would treat as a one-off item.
This article is for informational purposes only and does not constitute investment advice.
