Highlights

  • Q2 FY26 net sales increased 34% YoY to USD 1.29 billion.
  • Operating income declined as integration and acquisition-related costs weighed on margins.
  • Updated FY26 guidance reflects higher outlook for Siding & Trim and DR&A segments.

James Hardie Industries (ASX:JHX) reported Q2 FY26 net sales of USD 1.29 billion, an increase of 34% compared with the prior-year quarter. The rise was mainly supported by inorganic contributions from the AZEK Exteriors acquisition, while organic net sales declined 1%. Operating income fell to USD 24 million, down 84% year over year, reflecting higher acquisition-related expenses, lower utilization in North America manufacturing and increased SG&A costs. Adjusted EBITDA was USD 330 million, up 25% from Q2 FY25.

The company’s net loss for the quarter was USD 55.8 million, compared with net income of USD 83.4 million a year earlier. Adjusted net income was USD 154 million, a slight decline of 2% compared with the prior period.

Segment Update: Siding & Trim

Siding & Trim net sales reached USD 766 million, up 10% year over year, driven by AZEK Exteriors’ contribution. On an organic basis, segment net sales fell 3% due to lower volumes amid soft demand. Exterior product volumes declined mid-single-digits, with varying performance across Single-Family and Multi-Family categories. Interior product volumes fell low double-digits.

Adjusted EBITDA for the segment decreased 7% to USD 224 million, with margin contracting 530bps to 29.2%, reflecting lower production cost absorption and raw material pressures partially offset by pricing and savings initiatives. The company continues its focus on cost actions, manufacturing efficiencies and customer engagement across channels.

Deck, Rail & Accessories Performance

The Deck, Rail & Accessories (DR&A) segment posted USD 256 million in net sales for Q2 FY26. Compared with the same period before the acquisition, this reflects a 6% increase, supported by pricing, product mix and modest volume gains. Sell-through increased mid-single-digits, and adjusted EBITDA was USD 78.6 million with a margin of 30.7%. Margin performance was influenced by pricing, volume growth and investment-related costs.

ANZ and Europe Segments

In the Australia & New Zealand segment, net sales were USD 132.9 million, down 10%. In AUD terms, net sales declined 8%, reflecting lower volumes following the closure of the Philippines plant. Adjusted EBITDA was USD 43.5 million, with margins affected by R&D allocations and higher SG&A.

Europe net sales increased 18% to USD 137.5 million, driven by double-digit volume gains. In EUR terms, net sales were up 11%. EBITDA rose to USD 21 million, with margin expansion supported by improved plant performance and lower freight and material costs.

FY26 Guidance Update

The company raised its full-year net sales outlook for Siding & Trim to USD 2.93–2.99 billion, compared with the earlier range of USD 2.67–2.85 billion. DR&A guidance was set at USD 780–800 million. Total adjusted EBITDA guidance increased to USD 1.20–1.25 billion, incorporating partial-year AZEK contributions. Free cash flow is expected to be at least USD 200 million.

Share Performance of JHX

JHX was trading 9.94% higher at AUD 27.960 per share as of 18 November 2025.