Results
Fourth Quarter Net Sales of $1.4 Billion Up 10.4% YoY; Up 9.7% on an Organic Basis
Fourth Quarter Net Income of $118.6 Million, or $3.17 Per Share Up 13.2% YoY
8Fourth Quarter Operating Income of $159.3 Million; EBITDA of $177.6 Million Up 16.1% YoY
Full-Year Net Sales of $5.0 Billion Up 8.8% YoY; Up 5.4% on an Organic Basis
7Full-Year Net Income of $414.5 Million, or $10.95 Per Share Up 8.2% YoY
Full-Year Operating Income of $549.5 Million; EBITDA of $618.2 Million Up 10.0% YoY
Outlook
Establishes FY27 Guidance Including Total Sales +4.0% to +6.5% and EPS of $11.65 to $12.15
Increases Intermediate Financial Targets to Sales of $7 Billion and EBITDA Margins of 14%Guidance raised
Results
CLEVELAND, OHIO (August 13, 2026) – Applied Industrial Technologies (NYSE: AIT), a leading value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies, today reported results for its fiscal 2026 fourth quarter and full year ended June 30, 2026.
Net sales for the quarter of $1.4 billion increased 10.4% over the prior year.
The change includes a 0.3% increase from acquisitions and a benefit of 0.4% from foreign currency translation.
Excluding these factors, sales increased 9.7% on an organic basis reflecting a 12.9% increase in the Engineered Solutions segment and a 7.9% increase in the Service Center segment.
The Company reported net income of $118.6 million, or $3.17 per share, and EBITDA of $177.6 million.
On a pre-tax basis, results include $6.4 million ($0.13 after tax per share) of LIFO expense compared to $2.9 million ($0.06 after tax per share) of LIFO expense in the prior-year period.
2For the twelve months ended June 30, 2026, sales of $5.0 billion increased 8.8% compared with the prior year.
6On an organic basis, sales increased 5.4%.
Net income was $414.5 million, or $10.95 per share, and EBITDA was $618.2 million.
On a pre-tax basis, full-year results include $21.5 million ($0.43 after tax per share) of LIFO expense compared to $7.7 million ($0.16 after tax per share) of LIFO expense in the prior-year period.
Management commentary
Neil A. Schrimsher, Applied’s President & Chief Executive Officer, commented, “We had a strong finish to fiscal 2026 with fourth quarter sales, EBITDA, and EPS achieving record quarterly levels and exceeding our expectations.
3Organic sales growth of 10% was the strongest in more than three years with trends strengthening across both segments.
The growth momentum building across the business reflects our differentiated technical position and ongoing sales initiatives, which are intensifying within an increasingly favorable end-market backdrop.
4Combined with steady gross margin performance and solid operating leverage, we expanded EBITDA margins by more than 60 basis points, and achieved mid-teens EBITDA, EPS, and free cash growth compared to the prior-year fourth quarter.
Overall, fiscal 2026 was a pivotal year showcasing the ongoing positive transformation at Applied including early signs of the growth potential taking shape across our business.
The foundation of this progress is rooted in the power of the Applied team, and their commitment to our strategy and long-term vision of the Company.”
Mr. Schrimsher added, “We enter fiscal 2027 in a great position with various growth tailwinds and operational momentum continuing to develop.
5Positive top-line trends have sustained into the first quarter with organic sales up year over year by an estimated 7% to date.
We are mindful of ongoing inflationary headwinds and macro uncertainty, as well as more difficult comparisons as fiscal 2027 plays out.
That said, the demand recovery appears durable and increasingly influenced by structural and secular tailwinds.
Our Service Center segment continues to benefit from elevated technical MRO spending and internal sales initiatives, while order momentum remains positive across our Engineered Solutions segment reflecting demand for our leading engineering and application expertise, as well as exposure to faster growing verticals.
Combined with an active M&A pipeline and ongoing margin expansion opportunities, we are well positioned moving forward.”
Outlook
Fiscal 2027 Guidance and Updated Intermediate Financial Targets
Applied is introducing guidance for the fiscal year ending June 30, 2027 as follows:
EPS: $11.65 to $12.15
Total sales growth: 4.0% to 6.5%
EBITDA margins: 12.5% to 12.8%
Guidance incorporates macro uncertainty tied to ongoing geopolitical events and trade policy dynamics, as well as broader inflationary headwinds and growth investments.
Guidance does not assume contribution from future acquisitions or share buybacks.
1In addition, the Company is increasing its intermediate financial objectives and now targets sales of $7 billion and EBITDA margins of 14%.Guidance raised
The Company expects to achieve these targets over the next five years depending on various factors including the trajectory of broader macro conditions, the timing and scope of M&A, progress with internal initiatives, and other factors.
Management commentary
Mr. Schrimsher concluded, “Given our performance in recent years and the meaningful growth opportunity we have moving forward, we believe now is an opportune time to update our intermediate financial objectives.
Our ongoing evolution has positioned Applied at the intersection of exciting and powerful growth trends tied to rising technical support at customer plants, industrial system upgrades, automation adoption, and the build out of critical infrastructure across both legacy and emerging customer verticals.
In addition, our balance sheet and cash generation provide meaningful capacity to further compound our growth through ongoing M&A, while our margin expansion potential remains notable and supported by structural mix tailwinds, internal initiatives, and inherent operating leverage as we continue to scale the business.
Overall, our teams and strategy are now firmly focused on these next milestones, which highlight a compelling outlook for sustained value creation long-term.”
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