The Reece Ltd (ASX: REH) share price is in focus after the bathroom, plumbing and HVAC business announced its HY26 result.
Reece has a large network of locations in both Australia and the US (mainly the ‘sunshine belt’ states).
Reece HY26 result
Here are some of the main highlights from the report for the six months to 31 December 2025:
- Revenue up 6% to $4.65 billion
- EBITDA (EBITDA explained) down 6% to $448 million
- EBIT down 14% to $262 million
- Net profit after tax (NPAT) declined 20.3% to $144.2 million
- Earnings per share (EPS) down 19% to $0.23
- Interim dividend cut 16% to $0.065
What happened?
In the ANZ region, revenue increased by 4% to $2.06 billion, but EBITDA declined 4% to $261 million and EBIT dropped 7% to $179 million.
ANZ’s total branch network saw a net increase of four to 680. But, the segment also saw elevated costs, which reflected “investment” in the “employee proposition in a competitive labour market, investment in digital projects and modest cost inflation.”
In the US region, things weren’t much better. Revenue increased by 6% to US$1.7 billion thanks to network growth as it expands its presence in the US.
However, looking at existing locations on a like-for-like basis, sales declined by low single digits, reflecting “soft underlying demand”, particularly in the residential new construction sector.
US EBITDA declined 9% to US$123 million, driven by higher costs associated with recent network expansion. US EBIT declined 26% because of expansion costs, including depreciation and amortisation. During the period, it added 19 net new locations, bringing the total to 286 in the market.
Management comments
The Reece Chair and CEO Peter Wilson said:
Our half year result reflects the challenges we outlined last year, with subdued housing markets continuing to impact demand resulting in flat sales on a like for like basis. In our ANZ business, we have seen signs of a gradual recovery emerging, but performance remains mixed across states. In the US, the residential new construction market is still being impacted by affordability pressures.
While it’s a challenging environment, we want to do better. We’re focused on actions that position us well when conditions improve – showing up for customers, delivering on our 2030 strategy and building a stronger business for the long-term.
As we look ahead, we’re cautious about the pace of recovery and don’t expect a material shift in demand for the remainder of FY26.
Outlook for the Reece share price
The bathroom business said that it remains cautious about the pace of recovery and doesn’t expect a material shift in demand for the rest of FY26.
Reece is expecting group EBIT for FY26 to be in a range of $520 million to $540 million,
In ANZ, it’s seeing ongoing affordability challenges, though a gradual recovery is emerging. In the US, it’s expecting ongoing softness in residential new construction, with housing affordability impacting activity. Neither market is performing strongly and it’s hard to see when houses could become more affordable.
Further interest rate cuts in the US could help demand, though it remains to be seen how low the US Federal Reserve can/will go without noticeably boosting inflation.
It’s not one of the first ASX growth shares I’d buy, but I think the US has the potential to help rediscover earnings growth.
