PH · 10-K · 2026A · Full report

Operating Margin Drivers

Parker-Hannifin Corp · 2026-08-21 · Importance 23 · Surprise 14 · Matches filing data

Gross profit margin increased from 36.9% in fiscal 2025 to 37.7% in fiscal 2026, primarily because of higher margins in both segments driven by sales volume. Unfavorable product mix and increased material costs partially offset the gross-margin improvement. Selling, general and administrative expenses rose to $3,468 million from $3,255 million, primarily due to higher stock-based compensation, acquisition-related expenses, research and development expenses, and intangible asset amortization.

Key facts

• Parker-Hannifin expects approximately $90 million in business realignment charges and approximately $25 million in acquisition integration charges in fiscal 2027. source
• Parker-Hannifin applied for additional IEEPA tariff refunds, but recorded no receivable because the amount and timing remain uncertain. source
• Parker-Hannifin recognized an $84 million reduction to cost of sales in fiscal 2026 from IEEPA tariff refunds received from the U.S. government. source
• Fiscal 2026 gross profit margin increased primarily because of higher margins in both segments, mainly driven by sales volume, partly offset by unfavorable product mix and increased material costs. source
• Fiscal 2026 selling, general and administrative expenses increased primarily due to higher stock-based compensation, acquisition-related expenses, research and development expenses, and intangible asset amortization. source
• Fiscal 2026 interest expense decreased compared with 2025, primarily because of lower average rates on commercial paper borrowings. source

Impact estimates