Brady Corporation Q4 F’25 slides reveal 15.7% sales growth and record earnings

Introduction & Market Context

Brady Corporation (NYSE:BRC) presented its fourth quarter fiscal 2025 results on September 4, 2025, revealing strong performance with total sales growth of 15.7% and record full-year adjusted earnings. The identification solutions provider’s stock responded positively to the results, with shares surging 10.69% in pre-market trading following the announcement, reaching $86.01.

The company’s performance exceeded market expectations, with adjusted earnings per share of $1.26 beating the forecasted $1.23, representing a 2.44% positive surprise. Revenue also outperformed, reaching $397.28 million against an anticipated $386.68 million.

Quarterly Performance Highlights

Brady’s fourth quarter showed solid growth with total sales increasing 15.7% to $397 million, driven by organic growth of 2.4%, acquisition contribution of 11.3%, and favorable foreign currency impact of 2.0%. The company achieved adjusted diluted EPS of $1.26, up 5.9% from $1.19 in the same quarter last year.

As shown in the following chart of quarterly sales performance, Brady has demonstrated consistent revenue growth over the past several quarters, with Q4 F’25 representing the highest quarterly sales figure in the period shown:

Regional performance varied significantly, with Americas & Asia showing organic sales growth of 4.3%, while Europe & Australia experienced an organic sales decline of 1.3%. Particularly strong was Asia, with 12.0% organic growth, while the Americas grew at 3.3%. Europe declined slightly at 0.8%, and Australia showed a more significant drop of 5.1%.

Detailed Financial Analysis

Brady’s gross profit margin came in at 50.4% for Q4 F’25, compared to 51.6% in the same period last year. The company noted that facility closures and reorganization costs reduced gross profit margin by approximately 50 basis points in the quarter.

The following chart illustrates Brady’s gross profit margin trend over recent quarters:

Net income and earnings per share metrics showed mixed results on a GAAP basis but demonstrated growth on an adjusted basis. GAAP net income was $49.9 million in Q4 F’25 compared to $55.5 million in Q4 F’24, while adjusted net income increased 5.1% to $60.2 million. Similarly, GAAP diluted EPS was $1.04 compared to $1.15 in the prior year, while adjusted diluted EPS grew 5.9% to $1.26.

The following chart shows the trends in net income and diluted EPS:

For the full fiscal year 2025, Brady achieved an all-time high adjusted diluted EPS of $4.60, representing a 9.0% increase from $4.22 in fiscal 2024. GAAP EPS for the full year was $3.94, compared to $4.07 in the previous year.

Regional Performance

Brady’s Americas & Asia segment, which accounted for approximately 66% of total sales in Q4 F’25, delivered sales of $260.8 million, up 14.1% from the prior year. However, segment profit declined 3.3% to $51.6 million, with segment profit margin decreasing 360 basis points to 19.8%.

The Europe & Australia segment faced more significant challenges, with segment profit declining 21.8% to $15.1 million despite sales growth of 18.8% to $136.5 million. Segment profit margin contracted 580 basis points to 11.0%.

The following chart shows the sales and segment profit percentage trends for the Americas & Asia region:

Capital Allocation & Balance Sheet

Brady continued to demonstrate strong cash generation, though at a reduced level compared to the prior year. Cash flow from operating activities was $58.3 million in Q4 F’25, down from $84.0 million in Q4 F’24. Free cash flow was $49.4 million, compared to $73.2 million in the same period last year.

The company’s cash flow performance is illustrated in the following chart:

Brady maintained its commitment to shareholder returns, returning a total of $96.4 million to shareholders in fiscal 2025. This included $45.5 million in dividends, marking the 40th consecutive year of dividend increases, and $50.9 million in share repurchases (733,360 shares at an average price of $69.32 per share).

The company’s balance sheet remains strong, with $174.3 million in cash and $99.8 million in debt as of July 31, 2025, providing flexibility for future organic investments and strategic acquisitions.

Forward-Looking Statements

Looking ahead to fiscal 2026, Brady provided optimistic guidance, projecting GAAP diluted EPS of $4.55 to $4.85, representing growth of 15.5% to 23.1% compared to fiscal 2025. Adjusted diluted EPS is expected to range from $4.85 to $5.15, an increase of 5.4% to 12.0%.

The guidance is based on several key assumptions, including:

• Organic sales growth in the low-single digit percentages
• Full-year income tax rate of approximately 21%
• Foreign currency exchange rates as of July 31, 2025
• Depreciation and amortization expense of approximately $42 million
• Capital expenditures of approximately $40 million

For both the Americas & Asia and Europe & Australia segments, Brady expects low-single digit organic sales growth in fiscal 2026, with growth in segment profit excluding amortization.

CEO Russell Schaller emphasized the company’s strategic focus during the earnings call, stating, "We’re accelerating our business by expanding sales capabilities while significantly increasing our R&D." This aligns with the presentation’s note that investments in R&D continue to drive long-term organic sales growth, with recent acquisitions having a higher level of R&D as a percentage of sales.

Despite the positive outlook, investors should be aware of potential challenges, including estimated tariff impacts of $8-12 million that could affect profitability, ongoing macroeconomic pressures in Europe and Australia, and increased SG&A expenses.

Overall, Brady Corporation’s Q4 F’25 presentation reflects a company with strong growth momentum, particularly through acquisitions, while navigating regional challenges and investing for future organic growth. With a solid balance sheet and consistent shareholder returns, Brady appears well-positioned for continued success in fiscal 2026.

Full presentation:

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