管理層發言
Good day, and welcome to the Franklin Electric Reports Second Quarter 2026 Sales and Earnings Conference Call. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Dean Cantrell, Director of Investor Relations.
Thank you, Andrew, and welcome, everyone, to Franklin Electric's Second Quarter 2026 Earnings Conference Call. Joining me today is Jennifer Wolfenbarger, our Chief Financial Officer; and Joe Ruzynski, our Chief Executive Officer. On today's call, Joe will review our second quarter business highlights. Jennifer will provide additional details on our financial performance, and then Joe will make some additional comments highlighting our Water Systems segment. We will then take your questions. A replay link of the webcast will be archived for 7 days, and a transcript and audio version of this call will be available on our website tomorrow. Before we begin, let me remind you that as we conduct this call, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties, many of which could cause actual results to differ materially from such forward-looking statements.
A discussion of these factors may be found in the company's annual report on Form 10-K and today's earnings release. During this call, we will present both GAAP and certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in the appendix of our earnings presentation. All forward-looking statements made during this call are based on information currently available, and except as required by law, the company assumes no obligation to update any forward-looking statements. Earlier today, we published a slide deck to accompany our prepared remarks. The slides can be found in the Investor Relations section of our corporate website at www.franklinelectric.com. With that, I will now turn the call over to Joe.
Thank you, Dean. Good morning, everyone. Thank you for joining today's call. I'm pleased to share Franklin's results today and show you a company that is on a journey of growth and transformation. Let's move to Slide 3. Our second quarter was solid for all segments. We continued our work to expand margins and increase our investment in our strategic plan. Our revenue from new products recently launched is at a record pace and we expect this to continue throughout the year. As we exited the quarter, we saw strong order growth and a healthy backlog, along with a balanced inventory position in our channel. Our balance sheet remains strong. We closed two deals in our water business in the first half, strengthening our position in water treatment in North America and our Water Systems business in Europe. We also closed a deal in our distribution business, which extended our ability to bring our leading customer service and portfolio to some new end markets.
All three deals are tracking ahead of plan. Finally, as we are a company on the move and have a great story and momentum to share, we'd like to announce our first Investor Day on March 23, 2027 in New York. So please stay tuned for more details. If we could move to Slide 4. Looking at our results for the second quarter, we like to talk first about our growth. It's critical for us. While we play in global markets that have dealt with some significant uncertainty, our story is one of focused strategy, clear metrics and controlling our destiny. We finished the quarter with over 6% growth, 3.5% organic, and each segment grew nicely. We saw positive pricing, some good volume growth overall and strong contribution from new channels, new customers and M&A. Our adjusted operating income was up 12%. GAAP EPS was up 11%, with adjusted EPS up 18%. Our adjusted EPS growth in Q2 more than tripled our sales growth year-over-year.
This was helped by strong improvements in our gross profit and SG&A productivity. We received a portion of our tariff recovery as we knew we would receive some benefit in Q2; we modeled some balance in pricing and the offset to these same tariffs included in our inventory. The benefit to us was a few million dollars, mostly benefiting the Energy P&L. We saw an acceleration of inflation throughout the quarter and some softer regions in Europe and South America and continue to watch for pricing and productivity measures to offset as we move to the back half. We are ramping up a new factory in Turkey and working through some facility consolidations in North America to build an efficient operating structure to better serve customers long term. Some of these costs are included in our SG&A, both in restructuring and operating expense, and we expect a nice productivity boost from these efforts as we move into 2027.
If we can move to Slide 5, I'd like to share our progress on some of our strategic priorities. Our value creation model starts with a clear growth focus on moving to faster-growing markets, adding new channels and customers and accretive revenue through new product launches. I'd like to give some proof points for Q2. By focusing on wider customer needs and the market trends, we have invested in our R&D. Our goal is to increase velocity and scale. In Q2, we've seen some growth from new products deliver over $10 million in new sales. We expect this number to grow over the next few years. We are also focused on partnering with the best channel and looking to add customers. One great example is our water treatment business, adding new dealers that contributed over $2 million in new revenue in Q2. These two examples highlight a focused plan to expand the reach of customers we can serve and to accelerate our growth.
Our margin expansion efforts continue to accelerate. We have recently announced VT Regent as our new Chief Supply Chain and Transformation Officer. He brings a stellar resume of building teams, supply chain networks and transformation execution. He will also lead our Value Acceleration Office, which is off to a great first year and has a funnel that we expect to help accelerate our productivity efforts as we move into the second half of 2026. I mentioned on our last call, we launched a new factory in Q1 and we've also made some smart consolidations of assets to more efficiently serve our customers and expand capacity in North America. Our capital budget is a record this year. More importantly, we are getting a great balance of growth, productivity and sustaining projects to ensure we achieve our long-term strategy. Our commitment to our shareholders remains a key tenet with continued growth in dividend in 2026.
Finally and most importantly, we are focused not only on building the strongest team in our industry, but growing a company that attracts, develops and retains great talent. Thank you to our Franklin team for your support of our journey and your important contribution to our results. With that, I'd like to turn the call over to Jennifer to discuss the financial results in more detail.
Thank you, Joe. Please turn to Slide 6. Our fully diluted earnings per share was $1.46 for the second quarter 2026 versus $1.31 for the second quarter 2025. Second quarter adjusted diluted EPS was $1.55, a new quarterly record compared to our 2025 second quarter adjusted diluted EPS of $1.31. The 18% year-over-year expansion in adjusted diluted EPS was primarily driven by the expansion in our adjusted operating income year-over-year as a result of volume growth above market, price discipline and cost management. This is a continued demonstration of our commitment to expand the earnings power of our business. In the quarter, we booked a $4.5 million provision as we concluded a legal matter. This was recorded in the Energy Systems segment during the second quarter of 2026. There were $400,000 in restructuring costs in the second quarter of 2026 compared to $200,000 in the prior year second quarter.
Restructuring costs in the quarter are primarily related to structural improvement initiatives across our global water operations. These actions will deliver savings in 2026 and will be accretive in 2027. The effective tax rate was 25.7% for the quarter compared to 24.9% in the prior year quarter. The increase in effective tax rate was primarily due to increased unfavorable discrete events in Q2 of 2026. Moving to Slide 7. Second quarter 2026 consolidated sales were $622.9 million, a year-over-year increase of 6%. The sales increase in the second quarter was primarily driven by organic growth, including price, volume and foreign currency translation, followed by the incremental sales impact from recent acquisitions. Franklin Electric's consolidated gross profit was $230.6 million for the second quarter of 2026, up from the prior year's gross profit of $211.8 million. Gross profit as a percentage of net sales was 37% in the second quarter of 2026 compared to the second quarter of 2025 gross profit margin of 36.1%, an increase of 90 basis points year-over-year.
The gross profit margin was favorably impacted in the second quarter of 2026 by price, volume and tariff refunds, which were largely offset by material inflation and the timing of tariff expense rolling off the balance sheet. Selling, general and administrative expenses were $132.1 million in the second quarter of 2026 compared to $123.5 million in the second quarter of 2025. The increase in SG&A expense was primarily due to the incremental impact of our acquisitions in the past year. SG&A as a percentage of net sales was 21.2% in the second quarter of 2026 versus 21% in the second quarter of 2025. Without the impact of acquisitions, our SG&A as a percentage of net sales was 20.8%, an improvement year-over-year of 20 basis points. Consolidated operating income was $93.6 million in the second quarter of 2026, up $5.5 million or 6% from $88.1 million in the second quarter of 2025. The increase in operating income was primarily due to favorable price and higher sales volumes in the second quarter.
As previously mentioned, there were $4.5 million in legal settlement costs and $400,000 in restructuring costs in the second quarter of 2026 versus $200,000 in the prior year second quarter. Excluding those items, consolidated adjusted operating income was $98.5 million in the second quarter of 2026, up $10.3 million or 12% from $88.2 million in the second quarter of 2025. The second quarter 2026 adjusted operating income margin was 15.8% versus 15% in the second quarter of last year, an 80 basis point improvement year-over-year. Moving to segment results, starting on Slide 8. Global Water Systems sales were up 5% compared to the second quarter of 2025, driven by strong price realization, favorable currency exchange on sales and additional volume from our recent acquisitions. Water Systems sales in the U.S. and Canada were up 8% compared to the second quarter of 2025. The sales increase was led by sales of groundwater pumping equipment into the agricultural market, up 12%, sales of residential products, including water treatment products, up 11%, and sales of product into mineral extraction applications up 6%, partially offset by sales of large dewatering equipment sold into industrial applications, which decreased 12% compared to 2025 in the U.S. and Canada.
Our systems sales and markets outside the U.S. and Canada increased 1% overall. Foreign currency translation increased sales by 5%. Recent acquisitions added roughly 1% and volume and price newly impacted by 5%. Excluding the impact of acquisitions and foreign currency translation, sales in the second quarter of 2026 increased in Asia Pacific, while Latin America and EMEA sales were down year-over-year. EMEA sales volumes, specifically in North Africa, the Middle East and Eastern Europe were negatively impacted by the ongoing conflict in the Middle East. Global Water Systems operating income was $65.2 million, up $3.4 million versus the second quarter of 2025. The operating income margin was 18.2%, a year-over-year decrease of 10 basis points. There were $400,000 in restructuring costs in the second quarter of 2026 in the Water segment. Restructuring costs in the quarter are primarily related to the prior structural improvement initiatives across our global water operations.
Adjusting for restructuring charges, the Water Systems adjusted operating income was $65.6 million, up $3.7 million or 6% from the prior year, with an adjusted operating income margin of 18.3%, an improvement of 10 basis points from the second quarter last year. Operating margin for our Global Water Systems business was positively impacted by favorable price realization and somewhat offset by higher material costs. Moving to Slide 9. Distribution second quarter sales were $221.1 million versus the second quarter 2025 sales of $200 million, an increase of 11%. The Distribution segment sales increase was primarily due to higher volumes, acquisition-related sales and price realization. The Distribution segment's operating income was $19.7 million for the second quarter, a year-over-year increase of $3.6 million. Operating income margin was 8.9% of sales in the second quarter, an improvement of 80 basis points versus the prior year.
Operating income margin increased primarily due to higher sales volumes and strong price realization. Moving to Slide 10. Energy Systems sales in the second quarter of 2026 were $80.2 million, an increase of $2.7 million or 3% compared to the second quarter of 2025. Energy Systems sales in the U.S. and Canada increased 1% compared to the second quarter of 2025. Outside the U.S. and Canada, Energy Systems sales increased 12%, primarily in Europe and Africa. Energy Systems operating income was $27.9 million, down $1.2 million versus the second quarter of 2025. There was $4.5 million in legal settlement provisions booked in the second quarter of 2026 in the Energy segment. Adjusting for the legal settlement provision, the Energy Systems adjusted operating income was $32.4 million, up $3.3 million or 11% from the prior year, with an adjusted operating income margin of 40.4%, up 290 basis points from the second quarter of last year.
Adjusted operating income increased primarily due to favorable price, organic volume growth and refunds associated with tariffs. Moving to the balance sheet and cash flows on Slide 11. The company ended the second quarter of 2026 with a cash balance of $97.3 million and with $107 million outstanding under its revolving credit agreement. We generated $58.7 million in net cash flows from operating activities during the first half compared to $32 million in the first half of 2025. The main driver for the change was improved inventory usage. Yesterday, the company announced a quarterly cash dividend of $0.28 and the dividend will be payable August 20 to shareholders of record on August 6. Moving to Slide 12. Our second quarter financial results were in line with our expectations and underlying demand remains. Given our strong performance despite mixed markets year-to-date, we are raising our full year sales expectation to a range of $2.21 billion to $2.29 billion and a full year adjusted diluted EPS to a range of $4.50 to $4.70.
This range reflects some uncertainty in our global markets as we further assess macroeconomic and geopolitical outlook. We continue to maintain a strong balance sheet, and we'll continue to be disciplined as we deploy our capital resources to drive maximum return on investment. Before I turn the call back to Joe, mark our calendars for Tuesday, March 23, 2027 when we will host our inaugural Investor Day at NASDAQ in Midtown Manhattan. We look forward to sharing our strategy refresh, midterm guidance and vision for long-term value creation. We hope you'll join us. Now I'll turn the call back to Joe for some additional comments.
Thanks, Jennifer. As we shared last quarter, this year, we're spotlighting each of our segments to give investors a clear view of our focus, differentiation and long-term opportunities. These spotlights will also serve as a foundation for the deeper strategic discussion we'll have at our Investor Day next March. This quarter, we're highlighting our Water segment, a $1.3 billion business that has been central to Franklin's identity for decades. After building our reputation as a leading electric motor manufacturer, Brent Electric transformed the industry by inventing the gold standard submersible motor, a foundation that still anchors our leadership today. Today, we're a global leader in the water market and in products that supply, move, treat and dewater. With 15 factories worldwide and a leading channel, we design from the application outward, building solutions around how customers want to be served.
Our strategy aligns tightly with Franklin's broader focus on faster-growing markets, supported by powerful megatrends: a rising middle class, increased residential construction, accelerating urbanization and the expanding need for critical minerals. Industrial growth and urban density also increase demand for pressure boosting systems that enable reliable and efficient water access. We also see a growing opportunity in making computing energy efficient, particularly through advanced liquid cooling solutions that support the rapid expansion of AI and data center infrastructure. Innovation remains central to our strategy. Our world-class water labs, deep engineering expertise and agile development approach allow us to design for what's next. By increasing velocity and scale, we're adding meaningful value to our base business and delivering solutions that anticipate customer needs. Our brands are trusted.
Our customer service is tireless and our focus on execution continues to reinforce our leadership positions globally. While our end markets are diversified today, we expect a more balanced mix over time as we innovate and expand into growing markets and acquire businesses aligned with our strategy. In future calls, we'll provide a deeper look at our fast-growing water treatment business, which is becoming a model for how we execute our strategy. I will now turn the call over to Andrew for questions before closing thoughts.
分析師問答
Our first question comes from the line of Matt Summerville with D.A. Davidson.
Joe, I was hoping you could maybe delve a little deeper into how you define your exposure today to things like critical minerals as well as data centers or data center infrastructure? How big are those exposures? What sort of can we kind of think about you attaching? And on the latter data centers, are there any sort of CDU wins that you'd like to call out? And then I have a follow-up.
Yes. Thank you. Just maybe touching on those two. I think as we go back to the theme of what are the markets growing faster and how do we point and position how we serve new products, etc. You called out two markets that I think we've highlighted a few times, and we're excited about. I think one theme in both of those places is we like being the industrial point of service and development of product that sits a level or two behind some of these megatrends. For critical minerals, obviously energy infrastructure, the need for more electricity, data centers, etc., that critical minerals space for us, we think, is a multibillion dollar TAM that we're trying to make sure that we can both position ourselves to serve but also have the products to meet that need. One interesting thing about that space for us: we said that space for us was up high teens in the first quarter and up another roughly 10% in the second quarter.
Our service in that space really is focused on the operating of those mines. So we're not as exposed to the capital cycles or the commodity swings, but really the maintenance, and it's a dewatering focus largely. We made a few acquisitions in the last few years. We like the space a lot. We've been able to move those products around the world because we see those needs in South America and Africa and the U.S. And we're really positive about building that channel out and getting those products to our customers. I think that market, our view is that's a high single-digit CAGR. So if you look at our base business, which sits more in the low- to mid-single digits, as we move from residential groundwater space, it's a nice mix up for us, and it's a very nice margin business. On the data center side, we're not ready to call out big wins. But I think as we've talked about before, one thing we like about our portfolio is we serve different elements of that loop within a data center.
From the entry point, we've had some nice wins in terms of the municipal hookup; we have some flushing applications that are critical for the service and the maintenance of that loop. And then also, as I mentioned in my prepared comments, serving CDU manufacturers — of which, as you probably know, there's more and more getting into that space — having an efficient and focused supply chain that can serve in Asia, North America and Europe excites us. I think we're in a great position. We'll talk more about it with increased specificity in the back half of the year, so stay tuned.
And then as a follow-up, can you maybe just double back on what you acquired in the second quarter, how big the acquisitions are — maybe a little bit of quantitative detail — and then any color you can provide on orders, backlog, book-to-bill overall for Franklin Electric during the quarter?
Yes. The three deals we referenced in the first half — two of those actually closed just before we exited Q1. One is a systems business really focused on the groundwater and the residential space in Europe, specifically in the U.K. It's a smaller business but we like it a lot because we see government investment there. We see a space that we could not only bring in the product but also integrate solutions for builders and drillers, which has been a great business. It's a business called GeoQuit. The other two businesses: one in the water treatment space is a company that helps us extend our reach — Wood Brothers helps us extend our reach in a part of the U.S. that we historically didn't have as strong of a presence. That revenue is in the mid-20s to low-30s (millions). What we really like about it is the idea of serving as an OEM and being able to serve across the market. Smaller dealers around the U.S. really look to us for their infrastructure and technical solutions, and the scale that we bring helps them.
So we think that extends our reach and is nicely ahead of plan. The final one is a company called Benson. Benson is a great distributor in that same space in the central U.S. They expose us to markets that historically reach down to the Gulf Coast; they serve ag and touch utility and municipal infrastructure really well. Bringing them into the family is a mid-20s revenue business that closed as we entered Q2. It allows us to pull through other Franklin products and bring new products to market. One of the themes we like is that as we design new products, having that channel exposure to end customers is a multiplier for us. All three clearly fit the strategy of bringing a wider solution set to those end markets. About inventory and orders: we have a very diversified channel. Other than our distribution segment, where we have a direct feed from Franklin product, we have leading distributors around the world.
We feel good about the inventory position. Our sell-in and sell-out are well aligned. If you pull out the acquisition from the distribution business, you can see North American performance that Jennifer talked about, the 8–9% growth for our Water business — we're right on top of that in terms of organic growth for the distribution business. We feel good about the position. Weather, ag market dynamics — hot out west, wet in the Midwest — we've become good at positioning inventory so we're not sitting too heavy and are serving customers in real time. We're getting smarter with end-to-end metrics with S&OP and inventory planning. We feel we're in a good spot. The proof point is our working capital and cash flow: despite the growth, we've improved turns and kept inventory moving.
Our next question comes from the line of Ryan Connors with Northcoast Research.
Good quarter and the all-time high for the stock as we speak. So great stuff. I wanted to dive into some of the tactical revenue drivers, demand drivers in the quarter. One thing that jumped out is the growth in Water Systems in agriculture. If I got it right, you said a 12% increase. That's a pretty good number given we've still got some headwinds in ag. Curious what exactly is driving that and allowing you to buck the trend in the ag space.
A couple of things. One, ag has been a bit underinvested over the last year or so due to volatility and pressure from commodity prices, so there's probably some pent-up demand we're now serving. Weather hasn't hurt us this year. We're well positioned as you see El Niño and some drought conditions — when a pump isn't working, farmers turn it on and need it. Given our footprint and reach with OSI and real-time inventory availability, we benefit from short-term movements in demand. Planting season has been more normal; the last two years were uneven. In ag, specifically in the U.S. and Western Europe, we've been well positioned. Part of our business is a high replacement business — roughly 75% plus replacement in ag — and when you blend that with good service, inventory availability and quick turns, you see the benefit in the results this year. So that's been a help to us.
Got it. And then on the mining side, good to see mine dewatering in Australia strong. Any evidence that strength will spread to other geographies for mining beyond Australia and become more of a global cycle for you?
Yes. We're getting more intimate with that market. One reason Jennifer called out North America mining is that we're watching those end markets closely. We're tied in with mine operators, distributors and OEMs and we see a good funnel of opportunity in South America, Africa and Europe, specifically in the Nordics, in addition to Australia and the Pacific region. We think investment in critical minerals will continue: more capacity is needed. The position we're in is attractive because much of the investment is expanding existing mines — technology improves to go deeper and spread mines out — which plays well with our dewatering and maintenance-focused portfolio. In the U.S. you have copper and nickel in Minnesota, lithium in Nevada and Arizona, and uranium interest is picking up. We serve these markets in two ways: as an OEM where our water systems team helps spec product into operations and through pull-through channels via distribution. We also did a small distribution deal to expand presence in the Dakotas. It's small but strategic to reach these mining markets. Brand awareness — using known brands like Pioneer in dewatering — helps pull the different product lines together, and that has improved awareness over the past year.
Got it. One last housekeeping: I realize it's a one-time item, but can you give any flavor for what exactly the legal settlement was related to? I know you said it was in Energy, but whatever you're able to share would help.
Well, I can tell you, it's a long-in-the-tooth situation and preceded both me and the prior CEO. It's been out there for quite a long time. It was a piece of litigation in Europe. It's taken a long time. We feel really good about our legal team bringing this to resolution. We've known about it for a bit. We think we ended up in a good spot, and that one is behind us.
There will be a little bit more information in our 10-Q. Additionally, it's a long-standing legal item that we were able to close out in the quarter, and it is behind us.
Our next question comes from the line of Bryan Blair with Oppenheimer.
Another really solid quarter for your team. Stepping back, can you walk through the key puts and takes as you look at the back half and specifically what's contemplated in the implied 2H guide? The earnings moderation second half versus first half is notable. I realize you see tougher comps in the back half, but you seem to have broad-based momentum that perhaps isn't fully reflected in the guidance.
I'll start and then let Jennifer add. Our core markets are strong and we feel good about demand. Order trends and backlog are healthy as we enter Q3. What we're watching is uncertainty: another tariff announcement last week, the ongoing situation in the Middle East — which a year ago we were confident in our positioning, but the conflict has dampened activity in North Africa, the Middle East and parts of Eastern Europe — and a slower year in South America where political changes have paused some support to farmers. Those factors give us balance and pause. We've modeled these puts and takes into our guidance. So while momentum is real and we feel it, the unknowns make us cautious in modeling the back half.
To add, we're watching tariff expense, our Brazil market — which was very strong in 2025 for ag and had a strong Q1, with some election-year impacts on competitors — and the broader Middle East complex that continues to affect certain European regions. We continue to see good growth in Western and Southern Europe, but the unknowns in the second half give us some pause.
Understood. What was organic growth for water treatment in Q2? And what's allowing your team to win in that space?
Organic volume growth in water treatment was north of 5% in the quarter — really strong growth despite a muted residential market. We play mostly in the residential water treatment space. What's driving growth is focused customer success initiatives in our water treatment team to drive new dealer revenue. That team exceeded those metrics in the first half by about 4%, continuing to take share through new dealer storefronts and new dealer revenue. We're proud of their work.
I'll add that our water treatment go-to-market is very focused. We're a strong assembler and OEM, and our dealer support, marketing and online tools provide differentiated service. We have a specific route and support model for dealers that the team has developed, and we expect that share gain to continue.
Our next question comes from the line of Mike Halloran with Baird. We improved those metrics in the first half by about 4%, continuing to take share through new dealer storefronts and new dealer revenue. We're proud of their work. Joseph Ruzynski, Chief Executive Officer, said: I'll add that our water treatment go-to-market is very focused. We're a strong assembler and OEM, and our dealer support, marketing and online tools provide differentiated service. We have a specific route and support model for dealers that the team has developed, and we expect that share gain to continue.
You hear me guys?
Yes, we can hear you, Mike. One moment. There were some technical difficulties earlier. Could you repeat if anything was missed?
Great. I'm good to go. Very good. Could you tie up a handful of things for me: regarding the back half guide, is there a change in trajectory you're assuming in the back half versus what you've seen in the first half? Is there a change in how you're thinking about share-oriented performance? I assume there's conservatism, but I want to make sure there aren't core assumptions that shifted relative to the momentum in the first half.
Thanks, Mike. Where Jennifer and I ended earlier: we're watching the South American market and the Middle East. We don't see a change in the base performance of our business. There are some unknowns that we've tried to model in — some comparisons where we had stronger Q3 and Q4 performance last year. But generally, the business is performing as we set out at the beginning of the year, which is why we modestly raised the top line. There's no material change in share assumptions; we expect to continue executing as we have.
Secondarily, where do you stand on margin initiatives you're driving internally? What are you prioritizing today?
Good question. We've been highly acquisitive over the last five to six years and need to streamline operations, consolidate some facilities and achieve leverage from more strategic overhead. Those consolidations have been occurring over the last couple of quarters and will finish in the back half of the year. Those costs are included in our results and guide, but we expect efficiency gains from those moves. We're also building a focused supply chain organization led by our new Chief Supply Chain Officer to reposition sourcing and improve material productivity. Another focus is operational productivity from factory transitions. One other area: as part of our Value Acceleration Office, we hired an AI director this past year. We're applying AI to customer service and other processes to gain productivity while preserving high-quality, experienced people. We see AI as a way to accelerate onboarding of new talent and improve efficiency. Those are key focus areas.
I'm showing no further questions. So with that, I'll hand the call back over to CEO Joe Ruzynski for his closing remarks.
Thanks, Andrew. Thanks, everyone, for joining us today. As we look ahead, we feel very good about our performance year-to-date and the momentum we're carrying into the second half. Raising our guidance reflects the confidence we have in our growth strategy, the strength of our execution and the resilience of our teams across the globe. Our focus on faster growing markets, innovation and channel expansion continues to fuel our growth engine, and our productivity initiatives are progressing well, along with the new and strong leadership now in place across our supply chain. While global challenges remain, we're navigating them with discipline and clarity. We believe our strategy is positioned to add customers, expand into new markets and drive meaningful productivity gains. Throughout the year, we'll continue to pay dividends. We really like the businesses that we're in and the direction we're heading. We appreciate the continued support of our employees, partners and shareholders.
Thanks, everyone, for joining us today, and have a great week. Ladies and gentlemen, thank you for participating. This does conclude today's program, and you may now disconnect.