James Hardie Raises Fiscal 2027 Free Cash Flow Target

The Tip Desk · November 6, 2026 · 3 min read

Continuing-operations sales were $1.428 billion, up 24% at the high end of guidance, as adjusted EBITDA margin reached 31.8%.

James Hardie Industries plc (JHX), a provider of exterior home and outdoor living solutions, reported continuing-operations net sales of $1.428 billion for the second quarter ended September 30, 2026, up 24% from a year earlier and at the high end of its guidance range.

Adjusted EBITDA was $454.7 million, with a 31.8% margin that the company said was above the high end of guidance and 450 basis points higher than a year earlier. Net income from continuing operations was $149.8 million, or $0.26 a share, versus a loss of $64.3 million, or $0.11 a share, a year earlier. Adjusted diluted earnings were $0.42 a share.

In August 2026 the company announced the strategic divestiture of its European operations and the intended closure of its European fiber cement operations. Europe is now presented in discontinued operations; results and outlook in the release are on a continuing-operations basis. Income from discontinued operations was $1.2 million in the quarter.

Chief executive Aaron Erter said sales from continuing operations were well above the market and that North America fiber cement and Deck, Rail & Accessories both delivered double-digit sell-through growth, driven by execution against sales initiatives, material conversion and commercial synergies. Australia & New Zealand also delivered strong growth, he said, driven by continued share gains.

Siding & Trim net sales were $880.3 million, above the high end of guidance, led by continued fiber cement volume growth, favorable price/mix and strategic initiatives. Fiber cement volumes increased mid-single digits, with multi-family up high-teens; fiber cement sell-through increased low double digits, the company said, well ahead of declining end markets. Operating income margin in the segment was 26.4%, up 670 basis points year over year. Adjusted EBITDA margin was 34.6%. The company attributed the increase primarily to favorable net price and mix, volume leverage and lower manufacturing costs, partially offset by higher freight and diesel costs.

Deck, Rail & Accessories net sales were $387.0 million, up 51%, or $131.2 million, versus the year-ago quarter, reflecting strong sell-through, completion of planned channel inventory normalization in the first quarter and the initial load-in of new business with Boise Cascade. The segment swung to operating income of $48.6 million from a loss of $11.9 million. Adjusted EBITDA margin was 33.3%.

Australia & New Zealand net sales were $160.9 million, up 21% in U.S. dollars and 12% in Australian dollars, on high single-digit volume growth and a foreign-exchange tailwind. Operating income margin was 31.0%.

The company reaffirmed consolidated fiscal 2027 net sales and Adjusted EBITDA guidance and raised its free cash flow target to more than $650 million, from the $500 million-plus target reaffirmed after the first quarter. First-half free cash flow was $535.4 million versus $58.4 million a year earlier. The company repaid $111 million of term loan debt in the quarter and said it remains on track to reach net leverage below 2.0x by the end of the second quarter of fiscal 2028, together with expected proceeds from the Europe divestiture.

For the third quarter, the company guides total net sales of $1.058 billion to $1.140 billion and total Adjusted EBITDA of $298 million to $320 million. It expects Adjusted EBITDA to be lower in the third quarter and second half, driven by Deck, Rail & Accessories seasonality, incremental freight costs and a weaker macro environment. Full-year planning assumptions remain $4.990 billion to $5.133 billion of net sales and $1.446 billion to $1.534 billion of Adjusted EBITDA.

Erter said the U.S. housing market remains challenging, particularly new construction, and that the plan does not depend on a near-term recovery.