Russel Metals Inc.

Q2 2026 revenue was a quarterly record at $1.7 billion, up 37% versus Q2 of last year. Reported EPS was $1.43 and adjusted EPS was $1.63; adjusted EBITDA was $154 million versus $93 million in Q1. Overall gross margin improved 130 basis points versus Q1, and service center gross margin per ton was $529, up $71 per ton sequentially. The company said LTM EBITDA is over $400 million. For guidance, management said Q3 2026 should be better than Q3 2025, Q3 margins should be in the zone of the first half, and capital spending should average about $100 million per year over time, with Q2 CapEx at $18 million and an expected pickup in the back half of 2026 and into 2027.

John Reid said the demand backdrop is broad-based and stronger than normal seasonal patterns would suggest, with no meaningful summer slowdown seen so far and steel mills running at about 81% capacity. He highlighted extended customer and mill lead times, tight inventories, and strength across end markets including data centers, LNG, Western Canada projects and energy. His tone was upbeat but measured: he repeatedly framed the opportunity as both market-driven and supported by Russel’s access to product, value-added capabilities and recent modernization projects.

Martin Juravsky emphasized that the business has been reconfigured by roughly $700 million of acquisition and CapEx deployment since 2024 and $90 million of noncore asset sales, creating a higher-return earnings profile. He pointed to Q2’s 130 basis point gross margin improvement, the $16 million EBITDA contribution from Klockner in Q2, $48 million of cash used for working capital, $18 million of CapEx, and only $144 million of net debt. He also noted $24 million returned in dividends, no Q2 buybacks, $333 million spent since 2022 on 8.7 million shares at an average $38.13, liquidity above $500 million, and two newly approved modernization projects of about $10 million each.

Analysts focused on whether Q3 margin upside could exceed management’s apparent guide, and management said July margins were similar to June, with June better than the Q2 average, but also warned that cost catch-up can offset further price increases over time. Questions also probed demand durability, Canada versus the U.S., and whether Q2’s 6% same-store tonnage growth was share gain or market strength; management said it was a mix of both, helped by tight supply and better product availability. On M&A and capital allocation, management said it stays disciplined on one-off opportunities and treats dividends, buybacks, acquisitions and internal investment as independent choices rather than competing buckets.