Franklin Electric Reports Second Quarter 2026 Results

Rhea-AI Summary

Franklin Electric (NASDAQ: FELE) reported second quarter 2026 net sales of $622.9 million, up 6% from $587.4 million a year earlier. Operating income rose to $93.6 million from $88.1 million, maintaining a 15.0% operating margin. Diluted EPS was $1.46 versus $1.31, while non-GAAP adjusted diluted EPS increased to $1.55 from $1.31.

Water Systems net sales grew 5% to $358.5 million, Distribution rose 11% to $221.1 million, and Energy Systems increased 3% to $80.2 million. Energy Systems included a $4.5 million legal settlement loss. The company raised its 2026 guidance to net sales of $2.21–$2.29 billion and adjusted diluted EPS of $4.50–$4.70.

Positive

• Consolidated net sales +6% to $622.9 million YoY in Q2 2026
• Operating income +6% to $93.6 million with 15.0% margin
• Diluted EPS +11% to $1.46; adjusted diluted EPS +18% to $1.55
• Water Systems net sales +5% to $358.5 million; Distribution +11% to $221.1 million
• Raised 2026 guidance to $2.21–$2.29 billion net sales and $4.50–$4.70 adjusted EPS

Negative

• $4.5 million legal settlement loss recorded in Energy Systems operating income
• Net debt increased as net change in debt was +$75.9 million in first half 2026

News Explained

At June 30, cash was $97,283 thousand versus $108,491 thousand of current debt maturities and short-term borrowings.

Franklin Electric reported its second-quarter 2026 results on July 28, 2026; at June 30, 2026, it had $97,283 thousand of cash against $108,491 thousand of current debt maturities and short-term borrowings, placing reported cash below those near-term obligations.

The cash-flow statement records $5,063 thousand of proceeds from common-stock issuance and $18,326 thousand of common-stock purchases during the six months ended June 30, 2026. Issuing additional shares reduces an existing holder's percentage ownership absent offsetting changes, but the release does not provide the number of shares issued, so it does not establish the resulting ownership effect.

For the same six-month period, operating cash flow was $58,705 thousand, while investing cash flow was negative $90,928 thousand, including $71,926 thousand for acquisitions; financing cash flow was positive $36,118 thousand.

Market Context

-4% was the average 24-hour move across the tag-specific earnings history. Against that record, the ...

Analysis

-4% was the average 24-hour move across the tag-specific earnings history. Against that record, the current earnings report is best assessed alongside its raised guidance, while low short positioning and Net Selling remain relevant context.

Key Figures

Net Sales: $622.9 million Operating Income: $93.6 million Operating Margin: 15.0% +5 more

8 metrics

Net Sales $622.9 million Q2 2026, up 6% year over year

Operating Income $93.6 million Q2 2026, up 6% year over year

Operating Margin 15.0% Q2 2026

GAAP Diluted EPS $1.46 Q2 2026, up 11% year over year

Adjusted Diluted EPS $1.55 Q2 2026, up 18% year over year

Full-Year Net Sales Guidance $2.21 billion to $2.29 billion Fiscal year 2026, raised guidance

Full-Year Adjusted Diluted EPS Guidance $4.50 to $4.70 Fiscal year 2026, raised guidance

Legal Settlement Expense $4.5 million Energy Systems operating income, Q2 2026

Previous Earnings Reports

5 past events · Latest: Apr 28 (Positive)

Same Type Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Apr 28	Q1 earnings report	Positive	-0.4%	Sales and adjusted EPS growth were reported while full-year guidance remained unchanged.
Feb 17	Q4 earnings report	Negative	-14.7%	A substantial pension settlement charge accompanied the fourth-quarter and full-year results.
Oct 28	Q3 earnings report	Negative	-3.3%	A pension settlement loss reduced GAAP EPS despite sales and operating-income growth.
Jul 29	Q2 earnings report	Positive	+2.8%	Sales and operating income increased across segments while full-year guidance was maintained.
Apr 29	Q1 earnings report	Negative	-4.4%	Sales, operating income, and EPS declined amid weaker Distribution performance and weather impacts.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Tag-specific earnings history averaged -4%; four of five events aligned with the reported direction, while Q1 2026 diverged.

Key Terms

non-gaap measure, foreign currency translation

2 terms

non-gaap measure financial

"Adjusted diluted EPS is a non-GAAP measure."

A non-GAAP measure is a company-crafted financial metric that adjusts or excludes items from standard accounting numbers to highlight what management sees as the business’s core performance. Investors use these figures like a filtered photo to reveal trends or cash flow drivers that raw accounting totals might hide, but because companies decide which items to remove, these measures should be compared with standard statements to avoid being misled.

foreign currency translation financial

"Foreign currency translation, net"

Foreign currency translation is the process of converting financial statements prepared in one currency into another currency so they can be combined or compared. Investors care because exchange rate swings can change reported revenue, profit and asset values even when a company’s underlying business hasn’t changed — like converting vacation spending back to your home money and seeing the total rise or fall depending on the day’s exchange rate.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Second Quarter 2026 Highlights

• Consolidated net sales of $622.9 million, an increase of 6% to the prior year
• Net sales increased across all three segments: 5% in Water Systems, 3% in Energy Systems, and 11% in Distribution
• Operating income was $93.6 million, an increase of 6% to the prior year, with operating margin of 15.0%
• GAAP fully diluted earnings per share (EPS) was $1.46, an increase of 11 percent; Adjusted diluted EPS was $1.55¹, an increase of 18 percent

FORT WAYNE, Ind., July 28, 2026 (GLOBE NEWSWIRE) -- Franklin Electric Co., Inc. today announced its second quarter financial results for fiscal year 2026.

Second quarter 2026 net sales were $622.9 million compared to second quarter 2025 net sales of $587.4 million. Second quarter 2026 operating income was $93.6 million, compared to second quarter 2025 operating income of $88.1 million. Second quarter 2026 diluted EPS was $1.46, compared to second quarter 2025 EPS of $1.31. Second quarter adjusted diluted EPS¹ was $1.55, compared to 2025 second quarter adjusted diluted EPS¹ of $1.31.

^{1 – Adjusted diluted EPS is a non-GAAP measure. Please refer to our Note Regarding Non-GAAP Financial Measures below for further explanation as well as the final page of this release for a reconciliation of non-GAAP measures to the appropriate GAAP measure.}

“In the second quarter, we delivered 6 percent year-over-year top-line growth, balanced between organic and inorganic contributions, along with 18 percent growth in adjusted EPS. With this strong performance and continued momentum in our core businesses, we are increasing both our revenue and EPS guidance for the year.  These results reflect the progress of our organic volume growth initiatives — adding new customers, strengthening our channels, and investing in innovation across the highest-growth applications in the Water and Energy segments. We’re seeing solid demand in areas such as dewatering for mining, pressure-boosting, and water treatment solutions in fast-growing regions,” commented Joe Ruzynski, Franklin Electric’s CEO.

“At the same time, we continue to manage closely the inflationary price pressures we’re seeing in sourced materials and logistics lanes. Our global footprint and in-region manufacturing model help us serve critical water and energy needs reliably while maintaining the operational discipline that supports profitable growth and long-term value for our shareholders,” concluded Mr. Ruzynski.

Segment Summaries

Water Systems net sales were $358.5 million in the second quarter, an increase of $17.7 million or 5 percent compared to the second quarter of 2025. The incremental sales were driven by the sales impact of recent acquisitions, favorable foreign exchange, and price realization. Water Systems operating income in the second quarter of 2026 was $65.2 million, an increase of 6 percent over second quarter 2025 operating income of $61.8 million. Water Systems had $0.4 million of restructuring expenses in the second quarter with adjusted operating income² of $65.6 million, an increase of 6 percent over the second quarter of 2025 adjusted operating income² of $61.9 million.

Distribution net sales were $221.1 million, an increase of $21.1 million or 11 percent compared to the second quarter of 2025. Sales increases were driven by higher volumes, the incremental sales impact of recent acquisitions, and price realization. The Distribution segment operating income in the second quarter 2026 was $19.7 million, an increase of 22 percent over second quarter 2025 operating income of $16.1 million.

Energy Systems net sales were $80.2 million in the second quarter 2026, an increase of $2.7 million or 3 percent compared to the second quarter 2025. Sales increases were driven by higher price realization and volumes. Energy Systems operating income in the second quarter of 2026 was $27.9 million compared to the second quarter 2025 operating income of $29.1 million. Energy Systems operating income in the second quarter of 2026 included a $4.5 million legal settlement expense compared to $0.0 million in the second quarter of 2025. Energy Systems adjusted operating income² was $32.4 million, an increase of 11 percent over the second quarter of 2025 adjusted operating income² of $29.1 million.

^{2 – Adjusted operating income is a non-GAAP measure. Please refer to our Note Regarding Non-GAAP Financial Measures below for further explanation as well as the final page of this release for a reconciliation of non-GAAP measures to the appropriate GAAP measure.}

2026 Guidance

The Company is raising its guidance for full year 2026 net sales to be in the range of $2.21 billion to $2.29 billion and full year 2026 Adjusted Diluted EPS to be in the range of $4.50 to $4.70.

Earnings Conference Call

A conference call to review earnings and other developments in the business will commence at 10:00 am ET. The second quarter 2026 earnings call will be available via a live webcast. The webcast will be available in a listen only mode by going to:

https://edge.media-server.com/mmc/p/bv4pobwm

For those interested in participating in the question-and-answer portion of the call, please register for the call at the link below.

https://register-conf.media-server.com/register/BIf86cd5e922ea464585fd65d6489735a4

All registrants will receive dial-in information and a PIN allowing them to access the live call. It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call).

A replay of the conference call will be available from Tuesday, July 28, 2026, through 10:00 am ET on Tuesday, August 4, 2026, by visiting the listen-only webcast link above.

Forward Looking Statements

"Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including those relating to market conditions or the Company’s financial results, costs, expenses or expense reductions, profit margins, inventory levels, foreign currency translation rates, liquidity expectations, business goals and sales growth, involve risks and uncertainties, including but not limited to, risks and uncertainties with respect to general economic and currency conditions, various conditions specific to the Company’s business and industry, weather conditions, new housing starts, market demand, competitive factors, changes in distribution channels, supply constraints, effect of price increases,  raw material costs, technology factors, integration of acquisitions, litigation, government and regulatory actions, changes in tariffs or the impact of any such changes on the Company’s financial results, the Company’s accounting policies, future trends, epidemics and pandemics, and other risks which are detailed in the Company’s Securities and Exchange Commission filings, included in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2025, Exhibit 99.1 attached thereto and in Item 1A of Part II of the Company’s Quarterly Reports on Form 10-Q. These risks and uncertainties may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements made herein are based on information currently available, and the Company assumes no obligation to update any forward-looking statements.

Note Regarding Non-GAAP Financial Measures

The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management believes that the non-GAAP financial measure Adjusted Diluted EPS and Adjusted Operating Income provide additional meaningful information regarding the company’s performance and financial strength. Non-GAAP financial measures should be viewed in addition to and not as an alternative for the company’s reported results prepared in accordance with GAAP. In addition, not all companies use identical calculations for Adjusted Diluted EPS and Adjusted Operating Income; therefore, Adjusted Diluted EPS and Adjusted Operating Income included in this release may not be comparable to similarly titled measures of other companies.   Adjusted Diluted EPS and Adjusted Operating Income are defined and reconciled to what management believes to be the most comparable GAAP measures in a schedule at the end of this release, except for forward-looking measures where a reconciliation to the corresponding GAAP measures is not available due to the variability, complexity and limited visibility of the items that are excluded from the non-GAAP outlook measure.

About Franklin Electric

Franklin Electric is a global leader in the production and marketing of systems and components for the movement of water and energy. Recognized as a technical leader in its products and services, Franklin Electric serves customers worldwide in residential, commercial, agricultural, industrial, municipal and fueling applications. Franklin Electric is proud to be recognized in Newsweek’s lists of America’s Most Responsible Companies 2025, Most Trustworthy Companies 2025, and Greenest Companies 2025. 

Franklin Electric Contact:
Jennifer Wolfenbarger / Dean Cantrell
Franklin Electric Co., Inc.
InvestorRelations@fele.com

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
	Second Quarter Ended								Six Months Ended
	June 30, 2026				June 30, 2025				June 30, 2026				June 30, 2025
Net sales	$	622,880			$	587,434			$	1,123,317			$	1,042,681
Cost of sales		392,275				375,608				717,743				666,952
Gross profit		230,605				211,826				405,574				375,729
Selling, general, and administrative expenses		132,088				123,521				255,100				243,164
Restructuring expense		406				164				4,278				323
Legal settlement loss		4,512				—				4,512				—
Operating income		93,599				88,141				141,684				132,242
Interest expense		(3,524	)			(2,805	)			(5,835	)			(4,604	)
Other income (expense), net		1,345				(164	)			971				679
Foreign exchange expense, net		(2,497	)			(4,548	)			(2,122	)			(5,841	)
Income before income taxes		88,923				80,624				134,698				122,476
Income tax expense		22,822				20,061				33,902				30,539
Net income	$	66,101			$	60,563			$	100,796			$	91,937
Less: Net income attributable to noncontrolling interests		(359	)			(423	)			(724	)			(835	)
Net income attributable to Franklin Electric Co., Inc.	$	65,742			$	60,140			$	100,072			$	91,102
Earnings per share:
Basic	$	1.48			$	1.32			$	2.25			$	1.99
Diluted	$	1.46			$	1.31			$	2.23			$	1.97

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
	June 30, 2026				December 31, 2025
ASSETS
Cash and cash equivalents	$	97,283			$	99,662
Receivables (net)		352,459				247,511
Inventories		597,736				552,981
Other current assets		49,390				58,472
Total current assets		1,096,868				958,626
Property, plant, and equipment, net		256,064				252,164
Lease right-of-use assets, net		66,574				67,867
Goodwill and other assets		731,226				665,728
Total assets	$	2,150,732			$	1,944,385
LIABILITIES AND EQUITY
Accounts payable	$	206,192			$	174,954
Accrued expenses and other current liabilities		121,534				116,747
Current lease liability		19,580				20,518
Current maturities of long-term debt and short-term borrowings		108,491				31,827
Total current liabilities		455,797				344,046
Long-term debt		134,317				135,184
Long-term lease liability		45,930				46,481
Deferred income taxes		49,817				39,275
Employee benefit plans		18,486				22,833
Other long-term liabilities		34,994				29,541
Redeemable noncontrolling interest		1,770				1,657
Total equity		1,409,621				1,325,368
Total liabilities and equity	$	2,150,732			$	1,944,385

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Six Months Ended
(In thousands)
	June 30, 2026				June 30, 2025
Cash flows from operating activities:
Net income	$	100,796			$	91,937
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization		33,895				30,203
Non-cash lease expense		10,756				10,674
Share-based compensation		7,655				7,969
Other		(1,069	)			4,509
Changes in assets and liabilities:
Receivables		(98,781	)			(61,458	)
Inventory		(30,750	)			(49,215	)
Accounts payable and accrued expenses		37,945				11,514
Operating leases		(10,956	)			(10,513	)
Income taxes-U.S. Tax Cuts and Jobs Act		—				(4,837	)
Other		9,214				1,214
Net cash flows from operating activities		58,705				31,997
Cash flows from investing activities:
Additions to property, plant, and equipment		(20,383	)			(18,415	)
Proceeds from sale of property, plant, and equipment		1,342				727
Acquisitions and investments		(71,926	)			(109,687	)
Other investing activities		39				54
Net cash flows from investing activities		(90,928	)			(127,321	)
Cash flows from financing activities:
Net change in debt		75,939				134,850
Payment of debt issuance costs		—				(974	)
Proceeds from issuance of common stock		5,063				2,954
Purchases of common stock		(18,326	)			(129,321	)
Dividends paid		(24,862	)			(25,321	)
Deferred payments for acquisitions		(1,696	)			(4,300	)
Net cash flows from financing activities		36,118				(22,112	)
Effect of exchange rate changes on cash and cash equivalents		(6,274	)			1,488
Net change in cash and cash equivalents		(2,379	)			(115,948	)
Cash and cash equivalents at beginning of period		99,662				220,540
Cash and cash equivalents at end of period	$	97,283			$	104,592

Key Performance Indicators: Net Sales Summary

	Net Sales
	United States		Latin		Europe, Middle		Asia		Total
(in millions)	& Canada		America		East & Africa		Pacific		Water		Energy		Distribution		Other/Elims		Consolidated
Q2 2025	$203.8		$52.8		$55.7		$28.5		$340.8		$77.5		$200.0		($30.9	)	$587.4
Q2 2026	$220.0		$52.6		$56.3		$29.6		$358.5		$80.2		$221.1		($36.9	)	$622.9
Change	$16.2		($0.2	)	$0.6		$1.1		$17.7		$2.7		$21.1		($6.0	)	$35.5
% Change	8%		0%		1%		4%		5%		3%		11%				6%
Foreign currency translation, net *	$0.0		$3.9		$1.9		$0.4		$6.2		($0.1	)	$0.0				$6.1
% Change	0%		7%		3%		1%		2%		0%		0%				1%
Acquisitions	$5.8		$0.0		$1.6		$0.0		$7.4		$0.0		$7.6				$15.0
% Change	3%		0%		3%		0%		2%		0%		4%				3%
Volume/Price	$10.4		($4.1	)	($2.9	)	$0.7		$4.1		$2.8		$13.5		($6.0	)	$14.4
% Change	5%		-8%		-5%		2%		1%		4%		7%		19%		2%
*The Company has presented local currency price increases used to offset currency devaluation in the highly inflationary economies of Argentina and Turkey within the foreign currency translation, net row above.

Key Performance Indicators: Operating Income and Margin Summary

Operating Income and Margins
(in millions)		For the Second Quarter 2026
		Water			Energy			Distribution			Other/Elims			Consolidated
Operating Income / (Loss)		$	65.2		$	27.9		$	19.7		$	(19.2	)	$	93.6
% Operating Income To Net Sales			18.2	%		34.8	%		8.9	%					15.0	%
Operating Income and Margins
(in millions)		For the Second Quarter 2025
		Water			Energy			Distribution			Other/Elims			Consolidated
Operating Income / (Loss)		$	61.8		$	29.1		$	16.1		$	(18.9	)	$	88.1
% Operating Income To Net Sales			18.1	%		37.5	%		8.1	%					15.0	%

Reconciliation of Non-GAAP Financial Measure: Adjusted Diluted EPS

		For the Second Quarter
		2026				2025				Change
Diluted Earnings per Share "EPS" (as reported - US GAAP)		$	1.46			$	1.31			11	%
Restructuring		$	0.01			$	-
Legal settlement loss		$	0.08			$	-
Adjusted Diluted EPS (non-GAAP)		$	1.55			$	1.31			18	%

Reconciliation of Non-GAAP Financial Measure: Adjusted Operating Income

Operating Income and Adjusted
(in millions)		For the Second Quarter 2026
		Water				Energy				Distribution				Other/Elims				Consolidated
GAAP Operating Income / (Loss)		$	65.2			$	27.9			$	19.7			$	(19.2	)		$	93.6
Restructuring, gross of tax		$	0.4			$	-			$	-			$	-			$	0.4
Legal settlement, gross of tax		$	-			$	4.5			$	-			$	-			$	4.5
Non-GAAP Adjusted Operating Income / (Loss)		$	65.6			$	32.4			$	19.7			$	(19.2	)		$	98.5
Operating Income and Adjusted
(in millions)		For the Second Quarter 2025
		Water				Energy				Distribution				Other/Elims				Consolidated
GAAP Operating Income / (Loss)		$	61.8			$	29.1			$	16.1			$	(18.9	)		$	88.1
Restructuring, gross of tax		$	0.1			$	-			$	-			$	-			$	0.1
Legal settlement, gross of tax		$	-			$	-			$	-			$	-			$	-
Non-GAAP Adjusted Operating Income / (Loss)		$	61.9			$	29.1			$	16.1			$	(18.9	)		$	88.2

FAQ

How did Franklin Electric (FELE) perform in Q2 2026 in terms of revenue and EPS?

Franklin Electric reported Q2 2026 net sales of $622.9 million and diluted EPS of $1.46. According to Franklin Electric, sales rose 6% year over year, operating income reached $93.6 million, and adjusted diluted EPS increased to $1.55 from $1.31.

What were Franklin Electric’s Water, Energy, and Distribution segment results in Q2 2026?

In Q2 2026, Water Systems net sales were $358.5 million, Energy Systems $80.2 million, and Distribution $221.1 million. According to Franklin Electric, this represented segment sales growth of 5% for Water, 3% for Energy, and 11% for Distribution versus Q2 2025.

What 2026 guidance did Franklin Electric (FELE) provide after its Q2 2026 earnings?

Franklin Electric raised 2026 guidance to net sales of $2.21–$2.29 billion and adjusted diluted EPS of $4.50–$4.70. According to Franklin Electric, this updated outlook reflects year-to-date performance and momentum in its core Water and Energy businesses.

How did the $4.5 million legal settlement affect Franklin Electric’s Q2 2026 results?

Franklin Electric recorded a $4.5 million legal settlement loss in its Energy Systems segment in Q2 2026. According to Franklin Electric, GAAP Energy Systems operating income was $27.9 million, while adjusted operating income excluding this item was $32.4 million, up 11% year over year.

What were Franklin Electric’s cash flow and debt trends for the first half of 2026?

Franklin Electric generated $58.7 million in operating cash flow and ended with $97.3 million in cash. According to Franklin Electric, net cash from financing activities was $36.1 million, including a $75.9 million net increase in debt during the first six months of 2026.

Did Franklin Electric’s operating margin change in Q2 2026 compared to Q2 2025?

Franklin Electric reported a consolidated operating margin of 15.0% in both Q2 2026 and Q2 2025. According to Franklin Electric, operating income increased from $88.1 million to $93.6 million, with segment margins of 18.2% for Water, 34.8% for Energy, and 8.9% for Distribution.