AAR CORP. has reported robust results for the first quarter of fiscal year 2026, which ended on August 31, 2025. Consolidated sales rose by 12% to US$739.6 million, compared with US$661.7 million in the same period last year.
Sales to commercial customers increased by 11%, or US$50.4 million, underpinned by double-digit growth in both aftermarket parts trading and new parts distribution within the company’s Parts Supply segment. Government sales advanced by 15% year-on-year, driven by higher order volumes in new parts distribution activities. Commercial customers represented 71% of consolidated sales, consistent with the prior year quarter.
Net income for the quarter was US$34.4 million, equivalent to US$0.95 per diluted share, a sharp improvement from US$18.0 million or US$0.50 per diluted share in the previous year’s first quarter. Adjusted diluted earnings per share reached US$1.08, up from US$0.85 a year earlier.
Operating margins strengthened to 8.8% from 6.6%, while adjusted operating margin improved to 9.7% from 9.1%. These gains were attributed to higher volumes and improved profitability in new parts distribution.
Selling, general and administrative expenses declined to US$71.2 million from US$75.9 million in the prior year quarter. Acquisition, amortisation and integration costs were US$4.4 million, compared with US$7.1 million a year ago. Net interest expense remained broadly stable at US$18.5 million, compared with US$18.3 million previously. The average diluted share count edged up from 35.6 million to 35.9 million shares.
Cash flow used in operating activities totalled US$44.9 million, compared with US$18.6 million in the prior year. As of August 31, 2025, net debt stood at US$950.0 million, with a net leverage ratio of 2.82x.
