Reliance, Inc. Q2 Earnings: A Resilient Player in a Turbulent Market

Reliance, Inc. (RS) has once again proven why it deserves a front-row seat in the steel and metals industry. The company's Q2 2025 earnings report, released on July 23, 2025, painted a picture of resilience amid a sector-wide slump. With net sales of $3.66 billion and a 4% year-over-year increase in tons sold, Reliance outperformed both its own guidance and industry benchmarks. This performance isn't just about numbers—it's about strategy, execution, and the ability to thrive where others are struggling.

A Sector in the Doldrums, but Reliance Sails On

The steel and metals industry is grappling with headwinds that would sink lesser companies. From soft demand in China to volatile pricing and trade policy uncertainty, the landscape is anything but inviting. Nucor (NUE) saw a 3.77% revenue decline in Q1 2025, while ArcelorMittal (MT) and Steel Dynamics (STLD) are scrambling to offset weak demand with cost-cutting and capacity expansions. Yet, Reliance's Q2 results tell a different story.

The company's non-GAAP gross profit margin of 29.9% held steady within its targeted range of 29-31%, even as competitors like Nucor saw margins contract. Reliance's ability to maintain pricing discipline is a standout. Its average selling price per ton rose 6.1% sequentially in Q2, outpacing the industry's flat or declining trends. This isn't just a short-term win—it's a sign of a company that understands its pricing power and isn't afraid to leverage it.

Capital Allocation: The Secret Sauce

Reliance's Q2 results weren't just about top-line growth—they were a masterclass in capital allocation. The company returned $143 million to shareholders through dividends and buybacks, repurchasing 301,279 shares at an average price of $265.17. With $1.02 billion still available under its share repurchase program, Reliance is signaling confidence in its intrinsic value. For long-term investors, this is a green flag.

Compare that to Nucor, which lost market share and saw its stock underperform despite a 2.89% net margin. Reliance's disciplined approach to returning capital, combined with its focus on value-added processing and domestic sourcing, creates a flywheel effect: stronger margins, higher returns, and a more resilient business model.

Outperforming the Industry: A Recipe for Long-Term Confidence

Reliance's Q2 market share gains are no accident. The company's tons sold increased by 4% year-over-year, while the industry as a whole (per the Metals Service Center Institute) saw a 3.1% decline. This 7-percentage-point outperformance isn't just a statistical anomaly—it's a reflection of Reliance's operational agility.

The company's CEO, Karla Lewis, highlighted this in the earnings call: “Our record tons sold significantly outperformed the industry, driven by our focus on domestic sourcing and value-added processing.” That focus has allowed Reliance to avoid the worst of the pricing wars and instead capture premium contracts in non-residential construction, energy infrastructure, and industrial manufacturing—sectors with healthier demand profiles.

What This Means for Stock Momentum

For investors, Reliance's Q2 performance is a compelling case study in how to navigate a tough industry. The company's non-GAAP EPS of $4.43 in Q2—up 17.5% from Q1—shows that it's not just surviving but thriving. While the company expects a seasonal dip in Q3, with guidance of $3.60–$3.80 per share, this is a minor correction in an otherwise bullish trajectory.

Reliance's stock has historically traded with a premium to peers, and for good reason. Its combination of pricing power, operational efficiency, and disciplined capital returns creates a moat that's hard to replicate. The current share price of around $265 (as of Q2) feels justified, but with $1.02 billion in buyback capacity remaining, there's room for further upside if the stock dips on broader market jitters.

The Verdict: A Buy for the Long-Term

Reliance's Q2 results reaffirm its status as a top-tier player in a struggling industry. While the steel sector remains a risky bet, Reliance's ability to outperform on both revenue and margin metrics makes it a standout. For long-term investors, the company's focus on capital returns, pricing stability, and market share gains is a recipe for sustained value creation.

In a market where many are cutting costs and retreating, Reliance is investing in growth, buying back stock, and expanding margins. That's the kind of playbook that builds investor confidence—and stock momentum. If you're looking for a steel stock to hold through the cycle, Reliance, Inc. is the one to watch.