Reliance Steel & Aluminum Co.

Second-quarter sales increased 27% year over year. Gross profit was $1.3 billion, up 11% from Q1 2026 and up 20% from Q2 2025. FIFO non-GAAP gross profit margin expanded to 30.5% versus 30.1% in Q1 and 30.6% a year ago. Non-GAAP pretax income rose 40% year over year to $429 million, and non-GAAP EPS was $6.27, up 42% year over year; the border wall project contributed 41 cents per share. Record tons sold increased 7% sequentially and 10.8% year over year, and average selling price increased 7.8% sequentially. For Q3 2026, management guided non-GAAP EPS to $6.40 to $6.60, including an estimated $75 million of LIFO expense, or about $1.10 per diluted share. Full-year 2026 capex is expected to be approximately $300 million, with about half for strategic growth investments.

Karla Lewis said the company delivered another excellent quarter with continued momentum, strong execution, and broad-based market strength. She highlighted improving customer activity, extended mill lead times, strong domestic pricing, and outperformance versus industry shipment trends. Her tone was confident and upbeat, emphasizing Reliance’s scale, diversification, domestic mill partnerships, and ability to capture opportunities across infrastructure, aerospace, semiconductor, and manufacturing.

Arthur Ajemyan emphasized the financial leverage from higher volumes and pricing, noting sales up 27% year over year, gross profit of $1.3 billion, pretax income of $429 million, and EPS of $6.27. He also detailed the LIFO impact: full-year LIFO expense outlook was raised to $300 million from $150 million, with Q2 LIFO expense of $112.5 million and expected Q3 LIFO expense of $75 million; the reserve ended at about $700 million. On cash and capital allocation, operating cash flow was about $162 million, capex was $93 million, dividends were $64 million, no shares were repurchased in the quarter, and debt was $1.7 billion with net debt to EBITDA of 0.9.

Analysts focused heavily on the border wall contract, asking whether the Q2 and Q3 shipment ramp represents a sustained run-rate and whether phase 2 could extend the contract beyond mid-2027. Management said Q3 should be close to a full shipment run-rate and likely sustained through subsequent quarters, while also saying the phase 1 work is $1.4 billion through mid-2027 and there is an additional roughly $800 million to $900 million that could be opted into. Questions also centered on inventory, lead times, and pricing discipline; management said inventory remains comfortable, some products are tight, flat-rolled lead times remain stretched, and industry consolidation could support a more disciplined pricing environment.