Donaldson Co Inc Reports Record Sales of $3.7 Billion in Fiscal 2025 Amid Challenges

Donaldson Co Inc (DCI) reported record sales of $3.7 bln in fiscal 2025, with growth across all segments, and expanded its operating profit margin to a record 15.7%. However, the company faced challenges in the On-Road segment, with sales declining 20%, and the bioprocessing segment experienced delays in commercialization, impacting growth expectations for fiscal 2026.

Donaldson Co Inc (DCI) reported record sales of $3.7 billion in fiscal 2025, with growth across all segments, and expanded its operating profit margin to a record 15.7%. The company's strong performance was driven by robust aftermarket sales in its Mobile Solutions segment and growth in Industrial Solutions. However, challenges were faced in the On-Road segment, with sales declining 20%, and delays in commercialization in the bioprocessing segment impacted growth expectations for fiscal 2026.

According to the earnings call, CEO Tod Carpenter highlighted that the company's aftermarket strength contributed to record results. The Mobile Solutions segment, which includes aftermarket sales, reported $588 million in revenue, while the Industrial Solutions segment grew by 8% to $310 million. The Life Sciences segment also showed growth, with sales reaching $82 million, up 14% year-over-year. However, the On-Road segment experienced a 20% decline in sales, totaling $26 million.

The company's operating margin expanded to 16.4%, up 10 basis points from the prior year. Adjusted EPS was $1.03, 10% above the prior year. The company returned $465 million to shareholders, repurchased 4% of shares outstanding, and increased its dividend by 11%.

For fiscal 2026, the company expects total sales of $3.8 billion, with sales growth in each of its segments. The company projects an all-time high operating margin of 16.4% and record earnings of $4 per share. The CFO, Brad Pogalz, detailed that the company is projecting full year total sales to increase between 1% and 5%, with EPS guidance of $3.92 to $4.08 centered on $4 per share.

However, the company acknowledged ongoing macro uncertainty, cyclical headwinds in agriculture and transportation, and persistent inflationary pressure from tariffs. The On-Road segment's decline and delays in bioprocessing commercialization remain areas of concern.

References:

[1] https://seekingalpha.com/news/4489676-donaldson-projects-3_8b-sales-and-record-4-eps-for-fiscal-2026-as-margin-expansion
[2] https://www.ainvest.com/news/donaldson-2025-q4-earnings-strong-performance-net-income-rises-4-2-2508/