2Q26: Adj EPS Broadly In Line as Retail Delivers But Specialty Disappoints

Research evidence excerpt

2Q26: Adj EPS Broadly In Line as Retail Delivers But Specialty Disappoints

YSE

quarter. Specialty Distribution adj EBITDAC margin also came in lower than expected (42.7% vs 52 Week range USD 104.10-53.81

45.4% Barc and Street), which was attributed to organic revenue decline and investments to

increase capabilities in Europe. The company repurchased $250m of stock, which was in line

with our $250m estimate, through its ASR program and indicated approximately $900m capacity

remaining under current authorization plans.

Overall, a mixed quarter as strong Retail results were offset by a larger miss in Specialty

Distribution. Retail organic growth outperformed consensus expectations, which we view

favorably given it remains the company's most closely watched KPI and should provide greater Source: LSEG Data & Analytics, Bloomberg Link to Barclays Live for interactive charting

confidence in management's expectation for sequential organic improvement through 2H26.

While Specialty Distribution was expected to decline, the magnitude of the miss was

disappointing. Even adjusting for the ~$10m new business timing impact, organic growth would North America Insurance/Non-Life

Alex Scott, CFAhave been approximately -1.6%, still below both Street expectations and management's prior

+1 212 526 1561

guidance for roughly flat growth. As a result, we believe there is somewhat greater risk around

alex.scott@barclays.com

the 2H organic growth trajectory, despite more favorable prior-year comparisons and the BCI, US

potential benefit from the inclusion of One80 within Specialty Distribution organic growth. We

Justin Lee, CFAwill look to the call for further clarity on the sustainability of Retail's recent momentum and

+1 212 526 0912

justin.lee@barclays.com

BCI, US

Barclays Capital Inc.