Armstrong World Industries, Inc.

Second-quarter 2026 total company net sales increased 11% year over year and adjusted EBITDA increased 8%, both to record levels, while adjusted diluted EPS increased 13%. Mineral Fiber net sales rose 8% with 6% AUV growth and 2% volume growth; segment adjusted EBITDA increased 7% with a 44.7% margin versus 45.2% a year ago. Architectural Specialties net sales rose 17%, including 9% organic growth, and adjusted EBITDA increased 10% with a 20.4% margin; organic AS adjusted EBITDA margin was 21.4%. For the full year, the company now expects total revenue growth of 9% to 11%, Mineral Fiber sales growth of about 7% with about 1 point of volume growth and about 6% AUV growth, AS sales growth of 15% to 17%, adjusted EBITDA growth of 9% to 12%, adjusted EPS growth of 12% to 15%, and adjusted free cash flow growth of 10% to 14%. Management continues to expect full-year segment margins of approximately 44% for Mineral Fiber and approximately 19% for AS, with organic AS margin around 20%.

The CEO emphasized that Armstrong outperformed in a flat market through disciplined execution, product innovation, and portfolio breadth. He highlighted ongoing strength in higher-end Mineral Fiber products, digital tools like Kanopi and PROJECTWORKS, and newer growth areas such as TEMPLOK and data centers. His tone was constructive and confident, but he repeatedly noted that end markets remain muted and affected by macro uncertainty.

The CFO pointed to strong second-quarter profitability and said growth was driven by AUV, volume, and WAVE equity earnings, partly offset by freight and raw material inflation and higher SG&A tied to growth investments. He cited Mineral Fiber adjusted EBITDA margin of 44.7% versus 45.2% last year, AS adjusted EBITDA margin of 20.4% and organic margin of 21.4%, and total company organic adjusted EBITDA margin of 35.9%. He also noted year-to-date adjusted free cash flow was up 9%, the company paid $15 million of dividends and repurchased $75 million of shares in Q2, and the board added $800 million of share repurchase authorization through 2029.

Analysts pressed management on whether strong AS intake and Mineral Fiber volume gains can sustain into the second half and into 2027. Management said AS has now had roughly four consecutive quarters of double-digit intake, with a broad pipeline across transportation, office, health care, and education, and said Mineral Fiber volume should stay consistent in the back half, supported by commercial distribution and strong performance at the high end. Questions also focused on data centers, with management explaining the go-to-market is broader than just grid products and includes tile, containment, and structural solutions, with separate selling motions to hyperscalers, colocators, and owners. Management also said the new products do not imply shorter replacement cycles and that WAVE should still deliver mid-single-digit equity earnings growth.