Reece Group's Branch Expansion Meets Softer FY27 US Guidance

Continued branch network growth across Australia and the US delivered resilient sales, before softer than expected FY27 guidance on a weak US market outlook weighed on the stock.

31 Aug 2026 · 3 min read

Reece Group, a plumbing supplies distributor executing a US branch network expansion strategy, delivered resilient Australian sales growth and continued North American momentum despite softer residential construction conditions, before softer than expected FY27 guidance, driven by a weak US market environment, tempered enthusiasm despite double-digit Australian growth in the second half.

Strong execution amid a softer Australian construction backdrop

Auscap Asset Management said Reece's share price increased after another strong trading update, with the North American business continuing to grow well and the company executing effectively on its expansion strategy, while Australia remained softer, particularly in residential construction, though Reece continued to outperform peers, with resilient margins and tight cost control.

The North American business continues to grow well, and the company is executing effectively on its expansion strategy. Australia remains softer, particularly in residential construction, but Reece continues to outperform peers. Margins were resilient, cost control remains tight, and management maintained a positive outlook.

— Auscap Asset Management, Webinar, September 2025

Branch network expansion across both markets

Selector Funds Management said Reece reported first-half FY26 revenue of $4.6 billion, up 6 percent, with operating profit down 14 percent due to continued market softness and investment in branch rollouts. In ANZ, sales grew 4 percent to $2.1 billion with four net new branches opened, bringing the total network to 680 stores. In the US, sales increased 6 percent to US$1.7 billion with the branch network increasing by 19 to 286 stores.

Reece reported HY26 revenue of $4.6b, up 6% and operating profit (EBIT) of $262m, down 14% due to continued market softness and investment in branch rollouts. In ANZ, sales grew 4% to $2.1b with four net new branches opened, bringing the total network to 680 stores. In the U.S., sales increased 6% to US$1.7b with the branch network increasing by 19 to 286 stores.

— Selector Funds Management, Monthly Report, February 2026

Resilient demand and data centre exposure draw positive commentary

Pendal Group said Reece saw some positive market commentary following a period of share price softness, with sell-side analysts noting few signs of slackening demand for its products in Australia, resilient hiring activity, some exposure to data centres, and repricing to pass through higher input costs, though the portfolio does not hold Reece.

Sell-side analysts noted that there are few signs of slackening demand for their products in Australia, their hiring activity remains resilient, they have some exposure to data centres, and that they are repricing to pass through higher input costs.

— Pendal Group, Monthly Report, June 2026

Softer FY27 guidance on a weak US market outlook

Pendal Group said Reece underperformed following its FY26 result as initial guidance for FY27 was softer than expected, with the company anticipating only modest US revenue growth due to a weak market environment, whereas consensus expected stronger growth from the pass-through of plumbing supplies inflation, even though its Australian business grew double digits in the second half of FY26.

What fund managers say they are watching next is whether US revenue growth accelerates beyond modest guidance given plumbing supplies inflation pass-through, continued branch network expansion across ANZ and the US, whether Australian double-digit growth momentum from the second half of FY26 persists, and continued benefit from data centre exposure.