10-Q · April 29, 2026
Reliance, Inc. reported strong earnings for Q1 2026, with net sales reaching $4.03 billion, a 15.5% increase year-over-year, and diluted EPS of $5.10, up 36.4% from the prior year. The results reflect robust demand…
Earnings analysis · 10-Q
RS earnings analysis
Filed July 28, 2026 · Our reading of the company's report
The latest report
Reliance delivered a strong Q2, with revenue up 26.5% year over year to $4.630 billion and diluted EPS up 42.3% to $6.29, supported by record shipments, higher pricing and favorable operating leverage. Versus Q1,…
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Reliance delivered a strong Q2, with revenue up 26.5% year over year to $4.630 billion and diluted EPS up 42.3% to $6.29, supported by record shipments, higher pricing and favorable operating leverage. Versus Q1, revenue rose approximately 14.9%, EPS rose approximately 23.6%, reported gross margin declined from approximately 29.1% to 28.1%, and operating margin improved from approximately 9.1% to 9.5%. The central offset is metal-cost inflation: LIFO expense increased $87.5 million year over year, but the border wall contract and broad-based end-market demand supported earnings and margin expansion.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $6.29
What stood out
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Record volumes and pricing drove 26.5% sales growth
Q2 net sales rose 26.5% year over year to $4.630 billion, driven by a 10.8% increase in tons sold to a record 1.7901 million and a 14.5% increase in average selling price per ton to $2,602. Sequentially, sales increased $604.0 million from implied Q1 sales of $4.026 billion.
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EPS and operating income accelerated
Diluted EPS increased 42.3% year over year to $6.29 from $4.42, while operating income rose 41.4% to $441.6 million. EPS also increased from implied Q1 EPS of $5.09, a sequential gain of $1.20.
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Operating leverage offset cost pressures
Operating margin expanded 100 basis points year over year to 9.5% from 8.5%, and SG&A declined to 17.0% of sales from 19.3%. The U.S. border wall project contributed approximately 30 basis points to Q2 pretax income margin and $0.41 to EPS.
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Market-share gains exceeded industry shipments
Underlying shipment growth outpaced the industry: Reliance's tons sold increased 10.8% versus the Metals Service Center Institute's 5.5% industry-wide increase. The border wall project accounted for 5.2 percentage points of Reliance's volume growth.
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Cash generation supported shareholder returns
First-half operating cash flow increased $20.1 million year over year to $313.6 million despite higher working-capital needs. Cash returns to shareholders totaled $364.6 million in the first six months, including $234.2 million of repurchases and $130.4 million of dividends.
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Liquidity supports capital allocation
Liquidity remained substantial, with $235.4 million of cash and cash equivalents and $980.0 million of unused revolver capacity at June 30, 2026. The board declared a $1.25 per-share third-quarter dividend on July 17, 2026.
What to watch
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LIFO expense compressed reported gross margin
Reported gross margin contracted 160 basis points year over year to 28.1% from 29.7% because LIFO expense increased to $112.5 million from $25.0 million. Management says FIFO gross margin improved only 10 basis points, underscoring the sensitivity of reported profits to metal-cost inflation.
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Leverage increased as working capital absorbed cash
Net debt-to-total capital increased to 16.2% at June 30, 2026 from 14.4% at December 31, 2025, reflecting increased revolver borrowings. The company also had $400.0 million outstanding on its term loan.
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Working capital and taxes constrain cash conversion
Cash flow faced increased working-capital requirements from higher pricing and volumes: first-half operating cash flow was $313.6 million despite materially higher profitability, and income taxes paid doubled to $142.7 million from $71.0 million. Net cash used in investing was $146.8 million, while the filing does not separately disclose absolute capital expenditures.
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No formal risk-factor update; trade risks persist
Item 1A reports no material changes to the risk factors disclosed in the 2025 Form 10-K. Nonetheless, management explicitly identifies metals pricing, tariffs and trade policies, inflation, demand, supply-chain disruption and geopolitical conflicts as risks; aluminum prices remain elevated following the 50% Section 232 tariff imposed in June 2025.
Management's outlook
The 10-Q does not provide a quantitative earnings or revenue outlook; management instead states that its existing liquidity sources should be sufficient for the next 12 months and foreseeable future.
Earlier filings 4
10-K · February 26, 2026
Reliance positions itself as the largest North American metals service center with 2025 net sales of $14.29 billion and a U.S. tons-sold market share of ~17% (up from ~15% in 2024). Management highlights tons sold…
10-Q · May 2, 2024
Reliance reported Q1 net sales of $3,644.8 million, down $320.5 million (8.1%) versus Q1 2023, with operating income declining to $393.1 million (10.8% operating margin) from $513.6 million (12.9% op. margin) a year…
10-Q · November 2, 2023
Reliance reported Q3 net sales of $3,623.0 million, down vs prior-year net sales of $4,247.2 million, with operating income falling to $389.5 million and diluted EPS of $4.99. Management generated strong operating cash…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.