Janus International Cuts Full-Year Outlook as Margins Compress
Janus International Group lowered its 2026 revenue and profit guidance after adjusted EBITDA fell 18% in the second quarter even as sales edged up 2.4%.
Janus International Group (JBI) cut its full-year 2026 guidance after second-quarter profitability deteriorated faster than revenue growth slowed. The maker of self-storage doors, hallway systems and access-control technology said total revenue rose 2.4% year over year to $233.5 million, down from 5.8% growth in the first quarter, while adjusted EBITDA fell 18.0% to $40.2 million.
The quarter marked a shift from a deceleration story to a margin story. Adjusted EBITDA margin fell roughly 430 basis points year over year to 17.2%, a steeper drop than the first quarter's 340-basis-point decline, even though the margin improved sequentially from 14.8%. Gross margin compressed to 34.4% from 40.9% a year earlier, as cost of revenues climbed 13.6% against revenue growth of just 2.4%. Net income fell 48.3% to $10.7 million, or $0.08 a diluted share, from $20.7 million, or $0.15 a diluted share, in the prior-year quarter.
The divergence between segments widened. Self-storage New Construction revenue rose 20.3% to $113.0 million, though the increase leaned on the Kiwi II Construction acquisition, which contributed $19.2 million versus $18.1 million in the first quarter. Commercial and Other revenue fell 21.2% to $64.1 million, a sharp reversal from the first quarter's 0.5% decline and the fourth quarter's 5.0% decline. Self-storage R3 revenue grew 6.6%, an acceleration from 5.3% in the first quarter but still well below the pace of the construction segment.
Restructuring and acquisition costs added further pressure to the EBITDA bridge. Restructuring charges doubled to $1.6 million from $0.8 million, and acquisition expense rose to $2.1 million from $0.8 million.
Janus lowered its full-year revenue guidance to a range of $925 million to $945 million, implying 5.7% growth at the midpoint, down from the $940 million to $980 million range that implied 8.6% growth and had been reaffirmed at the first-quarter release. Adjusted EBITDA guidance was cut to $150 million to $170 million, implying a 4.9% decline at the midpoint, from a prior range of $165 million to $185 million that had implied 4.0% growth.
The balance sheet also showed strain from the acquisition activity. Net leverage rose to 2.7 times as of July 4 from 2.1 times at the start of the year, as net debt increased to $422.6 million from $356.6 million and cash fell to $127.0 million from $194.4 million, partly reflecting roughly $98.8 million paid for Kiwi II. Trailing-twelve-month free cash flow conversion of adjusted net income declined to 129% from 211% a year earlier, and six-month free cash flow fell to $55.0 million from $86.5 million.
Janus slowed its pace of share repurchases, buying back about 367,000 shares for $1.9 million in the quarter, down from roughly 2.9 million shares for $15.7 million in the first quarter. The company highlighted that its Nokē Smart Entry System surpassed 500,000 installed units for the first time, reaching 501,000 units, up 22.5% year over year.