RPM International Inc. ( RPM ) shares are trading lower after the company reported fiscal third-quarter results.

Sales declined 3% year over year to $1.48 billion, missing the consensus of $1.51 billion.

Sales decreased due to weak demand from specialty OEM manufacturing end markets and unfavorable weather conditions.

Geographically, sales decreased in North America, while Latin America and Asia / Pacific declined.

Adjusted EPS was $0.35, missing the consensus of $0.49.

Adjusted EBIT fell 29% to $78.2 million due to reduced production volumes, adverse foreign currency impacts, and temporary costs related to MAP 2025 plant consolidations and start-up activities.

For the nine months ended Feb. 28, operating cash flow was $619.0 million, supported by MAP 2025-driven efficiency.

Total debt decreased to $2.10 billion from $2.19 billion, driven by the reduction of $0.09 billion on improved cash flow to repay higher-cost debt.

Capital expenditures rose to $158.9 million from $138.1 million a year ago, driven by investments in shared RPM centers, a new production facility in India, and MAP 2025-enabled plant consolidations.

The company returned $242.6 million to stockholders via dividends and buybacks.

Frank C. Sullivan, RPM chairman and CEO said, ”Unseasonably cold weather in the southern U.S. and wildfires in the west reduced demand in geographies that typically have more construction and outdoor project activity in winter months.”

“As we look toward the fourth quarter, macroeconomic conditions are challenging, but we are seeing pockets of positive momentum and are leveraging our focus on repair and maintenance in both construction and consumer end markets. As demonstrated in prior economic cycles, the ability of our products and services to extend asset life becomes even more attractive to end users when budgets are tight.”

”Additionally, RPM associates continue to implement initiatives to outgrow our markets, including new product introductions, and achieve efficiency improvements. We anticipate that this will result in modest earnings growth in the fourth quarter with the financial benefits of MAP 2025 becoming even more evident when sustained volume growth returns.”

“While the tariff situation is dynamic, most of our businesses have limited cross-border trade for raw material procurement and finished good sales. This helps mitigate the effects of tariffs; however, we are not immune, and we assume that raw material inflation will increase from low-single-digits to mid-single digits as a result of currently known tariffs,”

Outlook: For the fourth quarter, RPM expects consolidated sales to remain flat compared to prior-year records.

In particular, CPG sales is expected to remain flat Y/Y, PCG sales to increase in the mid-single-digit percentage range and SPG and Consumer Group sales to decline in the low-single-digit percentage range.

In the quarter, the company expects adjusted EBIT to be up in the low-single-digit percentage range Y/Y.

Investors can gain exposure to the stock via Invesco Dorsey Wright Basic Materials Momentum ETF ( PYZ ) and Invesco S&P MidCap Quality ETF .

Price Action: RPM shares are down 4.38% at $102.02 at last check Tuesday.

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