Mueller Water Products Reports 4.1% Sales Increase and 28.2% Net Income Growth in Q3 Fiscal 2026

Mueller Water Products, Inc. reported a net sales increase of 4.1% for the third quarter of fiscal 2026, reaching $395.9 million compared to $380.3 million in the same period last year. The company's gross profit also rose to $155.8 million, up from $145.7 million, reflecting a gross margin improvement from 38.3% to 39.4%. This growth was primarily driven by higher pricing across most product lines, although it was partially offset by lower sales volumes and inflationary pressures estimated at around 4%. For the nine months ending June 30, 2026, net sales totaled $1,098.5 million, a 4.7% increase from $1,048.9 million in the prior year.

In terms of profitability, Mueller's net income for the third quarter was $67.3 million, compared to $52.5 million in the same quarter of the previous year, marking a significant increase of 28.2%. The nine-month net income also improved to $169.6 million from $139.1 million year-over-year. The effective tax rate for the third quarter decreased to 15.7% from 27.1% in the prior year, primarily due to a tax benefit from a loss on a foreign subsidiary investment.

Operationally, the company has been focusing on strategic reorganization, incurring $11.2 million in related charges during the third quarter, compared to $1.0 million in the same period last year. These charges included transaction-related expenses and non-cash asset impairments. The company also reported a decrease in selling, general, and administrative expenses to $64.0 million from $71.0 million, attributed to lower foreign currency impacts and incentive-based compensation.

Mueller Water Products continues to navigate challenges such as increased tariffs on imported materials, particularly affecting its Repair and Specialty Valve product lines. The company anticipates that these tariffs will continue to exert pressure on its operations throughout fiscal 2026. Despite these challenges, Mueller expects consolidated net sales to increase between 2.8% and 3.5% compared to fiscal 2025, driven by resilient demand in municipal repair and replacement markets, although new residential construction activity may be constrained by economic uncertainties.

As of June 30, 2026, Mueller reported cash and cash equivalents of $495.3 million, an increase from $431.5 million at the end of the previous fiscal year. The company also has $163.7 million in additional borrowing capacity under its asset-based lending agreement. Looking ahead, Mueller plans to invest between $60 million and $65 million in capital expenditures to enhance production capacity and operational capabilities, particularly in its foundries, while continuing to manage costs and pricing strategies in response to market conditions.