LCI Industries has reported its Q2 2026 financial results, with sales declining year-on-year but profitability and earnings improving.
LCI Industries, through its Lippert subsidiary, supplies engineered components to the outdoor recreation and transportation markets for original equipment manufacturers and the aftermarket.
For the quarter ended 30 June 2026, net sales were $968.7m, down 12.5 per cent from $1.11bn in the second quarter of 2025. Adjusted net sales, which exclude an $88.8m reduction relating to IEEPA tariff refunds expected to be passed through to customers, fell 4.5 per cent to $1.06bn.
Operating profit margin increased to 9.9 per cent from 7.9 per cent a year earlier. Net income rose 16 per cent to $67.1m, while diluted earnings per share increased from $2.29 to $2.75. Adjusted EBITDA increased 7 per cent to $129.4m.
The company also reported an 11 per cent increase in towable RV content per unit to $5,831.
The news comes after Patrick Industries and LCI Industries entered into a definitive agreement to combine in an all-stock merger, subject to shareholder and regulatory approval.
During the quarter, LCI Industries generated $346m in operating cash flow on a last 12-month basis, returned $28m to shareholders through dividends, repaid the remaining $92m of its 2026 Convertible Notes at maturity and ended the period with liquidity of $812m, including $216.5m in cash and $595.2m available under its revolving credit facility.
Solid second quarter results via self-help initiatives
“We delivered solid second quarter results with expanded profitability despite continued soft outdoor recreation industry demand,” says Johnny Sirpilla, interim CEO.
“Our 2026 performance has been driven first and foremost by our self-help initiatives. Through disciplined operational efficiencies and strategic cost reduction actions, we’ve structurally improved our cost base and expanded net margins despite a challenging wholesale RV production environment and continued retail softness. Our disciplined cost management execution and increased product content per unit has fundamentally strengthened our earnings power and position us to generate higher returns throughout the cycle.”
Sirpilla adds: “I am energised by the opportunities ahead and appreciate the value LCI delivers to its customers across the many dynamic markets we serve. I’m equally excited about the compelling strategic and financial rationale for our proposed merger with Patrick. Together, we expect to create a broader, more innovative product platform, expand our addressable market, and cost-effectively bring more products within reach of outdoor recreation consumers. In the meantime, our talented, innovation-minded team remains squarely focused on advancing our strategic investments and cost optimisation initiatives, and we look forward to finishing the year strong in our drive to enhance shareholder value.”
Consolidated net sales were affected mainly by lower North American RV wholesale shipments, partly offset by targeted price increases, contributions from acquired businesses, automotive aftermarket growth and higher RV content per unit from recent product launches.
Operating profit margin improved year-on-year, supported by cost reduction measures, including materials sourcing initiatives, and the net impact of IEEPA tariff refunds, partly offset by merger-related expenses and investment in Aftermarket Segment capacity and distribution.
OEM segment
OEM net sales fell 20 per cent to $674.8m from $839.6m in the second quarter of 2025.
RV OEM net sales declined 33 per cent to $336.1m, reflecting IEEPA tariff refunds expected to be passed through to customers, lower North American travel trailer and fifth-wheel shipments and a shift towards lower-content single axle travel trailers. Price increases and recent product introductions partly offset the decline.
Adjacent Industries OEM net sales increased 1 per cent to $338.7m, supported by acquired businesses and higher sales to North American marine OEMs, partly offset by IEEPA tariff refunds expected to be passed through to customers.
OEM operating profit was $44.1m, or 6.5 per cent of net sales, compared with $51.7m, or 6.2 per cent, a year earlier. Margins benefited from tariff refund impacts, commodity-linked pricing, targeted price increases and cost improvement measures, although these gains were partly offset by lower production volumes, higher material, steel, aluminium and fuel costs, and merger-related expenses.
Aftermarket segment
Aftermarket net sales increased 10 per cent to $293.9m from $267.7m in the second quarter of 2025. Growth reflected targeted price increases, higher material cost recovery, acquired businesses and stronger automotive aftermarket volumes, partly offset by IEEPA tariff refunds expected to be passed through to customers.
Operating profit rose to $51.9m, or 17.7 per cent of net sales, compared with $36.1m, or 13.5 per cent, a year earlier. Margins benefited from tariff refund impacts, pricing actions and cost reduction initiatives, partly offset by higher material, freight, steel, aluminium and fuel costs, merger-related expenses and continued investment in capacity and distribution.
The company’s effective tax rate for the quarter was 25.6 per cent, compared with 26.2 per cent in the second quarter of 2025.
Looking ahead, LCI Industries expects July 2026 net sales of about $315m, around 4 per cent below the prior year. It has lowered its forecast for North American RV wholesale shipments in 2026 to between 280,000 and 300,000 units, down from its previous range of 315,000 to 330,000 units.
The company expects full-year revenue of $3.9bn to $4.1bn, reaffirmed its operating profit margin guidance of 7.5 per cent to 8.0 per cent and continues to expect adjusted earnings per share of $8.25 to $8.75.
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