RPM Inc. (RPM, Financial), a specialty chemicals manufacturer, faced significant challenges in Q3 2025, leading to missed EPS and revenue expectations. The company projected flat year-over-year revenue for Q4 at $2.01 billion, below estimates due to ongoing macroeconomic difficulties.

• Weather-sensitive construction markets negatively impacted RPM in Q3. The Construction Products Group (CPG) saw a 4.5% revenue decline to $473.4 million, affected by unseasonably cold weather in the southern U.S. and wildfires in the west.
• The Specialty Products Group experienced a 10.1% revenue drop to $158.7 million, with reduced demand for disaster restoration products compared to the previous year when freeze-related flooding boosted sales. Additionally, the consolidation of eight manufacturing plants led to transitional costs, causing a 44.5% drop in segment adjusted EBITDA.
• Overall, RPM's adjusted EBIT fell by 29% to $78.2 million, and adjusted EPS decreased by nearly 33% to $0.35. The company's focus on cash flow generation under the MAP 2025 initiative contributed to lower profitability. RPM generated $91.5 million in operating cash flow in Q3, its second-highest Q3 total, aided by disciplined inventory management. However, this led to a $36 million inventory reduction and lower production levels, resulting in reduced fixed cost absorption and compressed margins.
• Despite these challenges, RPM sees potential growth opportunities. The company is well-positioned to benefit from consumers and businesses seeking to extend asset life in an uncertain economic environment. With new product launches and efficiency improvements, RPM expects modest earnings growth in Q4 and more substantial improvements when volume growth returns.

RPM's Q3 performance highlights the impact of weather disruptions and strategic trade-offs under the MAP 2025 initiative. Strong cash flow generation was offset by margin pressures, compounded by plant consolidations and reduced fixed cost absorption. However, RPM anticipates more favorable year-over-year revenue and EPS comparisons in upcoming quarters.