Sales Jump 25% as Parts Supply Division Leads Growth
AAR Corp (NYSE: AIR) reported a significant financial outperformance in its third-quarter results on March 24, 2026, with total sales increasing 25% year-over-year to $845.1 million. This top-line growth translated directly to the bottom line, as adjusted diluted earnings per share rose 26% to $1.25. The results reflect strong underlying demand across the company's core aerospace operations.
The primary engine of this growth was the Parts Supply segment, which saw sales expand by 45% to $392.5 million. Within this division, new parts distribution was a standout performer, posting 36% organic growth. The company's Repair & Engineering division also delivered a solid 23% sales increase to $265 million, while Integrated Solutions sales grew 3%. This broad-based strength in its commercial business, which saw sales climb 27%, underscores a healthy recovery and sustained activity in the aviation sector.
Operating Margins Expand as Net Leverage Falls to 2.17x
Beyond revenue growth, AAR Corp demonstrated improved operational efficiency and financial discipline. The company's adjusted operating income increased 31% to $86.2 million, lifting its adjusted operating margin by 50 basis points to 10.2%. This was achieved even as the company integrates its HAECO Americas acquisition, a process noted to be ahead of schedule. Strong execution also produced $75 million in cash from operating activities during the quarter, allowing AAR to reduce its net debt-to-adjusted EBITDA ratio to 2.17x, well within its target range.
Management expressed confidence in the market's durability. CEO John Holmes noted that fundamental demand for air travel remains strong, with airlines planning for a busy summer despite elevated fuel prices. This sentiment, coupled with the strong quarterly performance, propelled AAR's stock, which has gained 54% over the past 12 months and hit $107.94 on the day of the announcement.
