During today's call, we will discuss ITW's first quarter 2026 financial results and provide an update on our outlook for full year 2026. In the first quarter, we continued to outperform our underlying end markets, delivering revenue growth of 5% and a 12% increase in GAAP EPS to $1.66. Through disciplined operational execution, we expanded operating margin by 60 basis points to 25.4%. We continued to capitalize on positive demand trends in our CapEx-related segments, with organic growth in Welding up 6% and Test & Measurement and Electronics up 5%.
Our enterprise initiatives contributed 120 basis points to the bottom line, driving that 60 basis point overall margin improvement. We were equally encouraged by our continued progress on ITW's organic growth agenda, specifically on Customer-Back Innovation, or CBI as we call it. We are positioning the company to consistently deliver 3% plus CBI contribution to revenue by 2030. As we've noted before, this is the key driver of our ability to consistently deliver 4%+ high-quality organic growth at the enterprise level.
As we look ahead and based on our solid Q1 results, we are raising our full year GAAP EPS guidance by $0.10. Our new guidance midpoint of $11.30 incorporates a slightly lower tax rate and represents 8% year-over-year growth. Our full year organic growth projection of 1% to 3% remains unchanged, reflecting current demand levels adjusted for seasonality. For the full year, we expect operating margin expansion of approximately 100 basis points, powered by our enterprise initiatives.
| Metric | Period | Current guidance |
|---|---|---|
| GAAP EPS (midpoint) | FY2026 | $11.30 (raised $0.10 (~8% YoY growth)) |
| Organic revenue growth | FY2026 | 1%-3% (unchanged) |
| Total revenue growth | FY2026 | 2%-4% (unchanged) |
| Operating margin expansion | FY2026 | ~100 bps (unchanged) |
| Enterprise initiatives margin contribution | FY2026 | ~100 bps (volume-independent) |
| Incremental margins | FY2026 | mid-to-high 40s% (unchanged) |
| Metric | YoY | Note |
|---|---|---|
| Revenue growth (total) | 5% (4.6%) | 0.4% organic, 3.9% from foreign currency translation, and 0.3% from an acquisition. |
| GAAP EPS | +12% to $1.66 | Margin expansion from enterprise initiatives and operational execution plus a slightly lower tax rate. |
| Operating margin | +60 bps to 25.4% | Enterprise initiatives (strategic sourcing and 80/20 Front-to-Back) contributed 120 bps. |
| Test & Measurement and Electronics organic | +5% (10% total revenue) | Sustainable recovery with semi-related businesses up more than 15% on rising fab utilization and new products. |
| Welding organic | +6% | Broad-based strength led by North America (up 8%), new products, and strong order activity across industrial and commercial. |
| Automotive OEM organic | -1% | Weak global auto builds (down more than 3%), but ITW outperformed; margin improved 170 bps to 21%. |
| Food Equipment organic | -3% | Slow institutional/education start in January (NA down 5%), partially offset by service (+3%) and double-digit QSR growth. |
| Specialty Products organic | -5% | PLS activities and delayed Middle East aerospace sales; margin still expanded 40 bps to 31.3%. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Customer-Back Innovation (CBI) | 2025 delivered 40 bps of CBI yield improvement | Tracking to incremental improvement in 2026 toward 3%+ contribution by 2030; patent filings up 9% in 2025 after 18% in 2024 | Improving |
| CapEx vs. consumer-facing demand split | Green shoots discussed last quarter | Industrial/CapEx and semi markets strong with rising orders; consumer-facing markets challenged but improving, ITW outgrowing both | Improving |
| Enterprise initiatives margin engine | Most impactful margin driver since 2012 | 120 bps contribution in Q1, on track for ~100 bps full year, advancing toward 30% margin goal by 2030 | Stable/improving |
| Pricing and price/cost | Original plan assumption for price and price/cost | Slightly more price expected, starting in Q2 and carrying through H2, in response to inflationary pressures | Increasing |
| China automotive recovery | — | China builds down 10% in Q1, projected flat in Q2 with double-digit EV growth where ITW is well-positioned | Improving |