Why Did Reece (ASX:REH) Report Higher Sales but Lower Profit in FY26?

Sonal Goyal

21 October 2026 05:31 PM AEDT

Why Did Reece (ASX:REH) Report Higher Sales but Lower Profit in FY26?

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Key highlights

Reece reported FY26 sales revenue of $9,378 million, up 4.5%, and EBIT of $534 million, down 2.6%, in its 24 August 2026 release.
NPAT was $308 million, down 2.8%, EPS was 49.5 cents, and the final dividend is 13.40 cents per share, fully franked.
Net debt rose to $744 million from $590 million, and the company expects more modest growth in the US.

Shares in Reece Ltd (ASX:REH) ended 21 October 2026 at $17.05, down 1.96%. The S&P/ASX 200 Industrials [XNJ] index stood at 8,113.90, a rise of 0.99% (79.50 points), while the S&P/ASX 200 [XJO] was at 8,831.30, a rise of 0.16% (14.40 points), at 4:25 pm GMT+11. Reece Group is a distributor of plumbing, waterworks and HVAC-R products with about 1,000 branches in Australia, New Zealand and the United States.

What Reece does

Reece Limited, established in 1920, distributes plumbing, waterworks and HVAC-R products to commercial and residential customers through about 1,000 branches in Australia, New Zealand and the United States. The group has about 9,000 employees.

FY26 financial results

In an ASX announcement dated 24 August 2026, Reece reported sales revenue of $9,378 million, up 4.5% (up 7.3% in constant currency), EBITDA flat at $901 million, EBIT of $534 million, down 2.6%, and NPAT of $308 million, down 2.8%. EPS was 49.5 cents, up 0.7%, and return on capital was 11.9%, up 5 basis points. The final dividend is 13.40 cents per share, fully franked.

Regional performance

The company said ANZ volumes recovered during the year and it ended with 678 branches in that region, while a subdued residential housing market in the United States led to softer growth there. It opened a net 25 new US branches during the year. Net debt increased to $744 million from $590 million, driven by ongoing investment to support future growth.

FY27 outlook

Reece said it enters FY27 with a pipeline of activity in ANZ that should support first-half momentum, while it expects more modest growth in the US, where residential new construction remains a challenge.

Sector context

Industrial companies span transport, infrastructure, engineering, services and manufacturing, and they are tracked through the S&P/ASX 200 Industrials index, which closed at 8,113.90, up 0.99%, on 21 October 2026 alongside a 0.16% rise in the S&P/ASX 200 to 8,831.30. Plumbing and building products distribution follows housing construction, renovation activity and commercial building, and the release links US results to residential new construction.

Risks and uncertainties

EBIT and NPAT declined despite higher sales, and net debt rose. US residential construction remains subdued, and the company expects modest US growth. Currency movements, housing demand, supply chain disruption, input costs and investment in branches and digital capabilities can affect outcomes.

Catalysts to watch

Items to watch include ANZ first-half momentum, US residential construction trends, branch network expansion, net debt and the half-year result.

Wrapping up

Reece’s 24 August 2026 release reported higher sales but lower EBIT and NPAT, with a recovery in ANZ and softer US growth. The next result will show whether those trends continue.

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