Zurn Elkay’s second quarter results were well received by the market, driven by strong execution in core growth initiatives and favorable end-market dynamics. Management attributed the positive performance to robust demand in nonresidential segments, product innovation, and effective navigation of tariff-related pressures. CEO Todd Adams noted, “The underlying momentum in our business continued in the second quarter as we posted 8% organic growth, EBITDA grew 13% year-over-year and margins expanded 120 basis points.” The team also highlighted improved operational efficiency and proactive supply chain management as key factors supporting margin expansion.

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While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Zurn Elkay’s Q2 Earnings Call

• Bryan Blair (Oppenheimer) asked for detail on growth by product category and Q3 outlook. CEO Todd Adams pointed to “significant unit volume growth and share gains” across categories, particularly benefiting from recent product innovation.
• Andrew Krill (Deutsche Bank) questioned end-market performance and residential softness. CFO David Pauli confirmed that while residential remains weaker, institutional and commercial demand is holding steady, supporting the company’s guidance.
• Nathan Jones (Stifel) inquired about pricing and value from the new filtration product. Pauli responded that the Elkay Pro Filtration system carries about a 10% higher average selling price versus previous models, with added features enhancing customer value.
• Michael Halloran (Baird) sought clarity on inventory and channel dynamics. Adams stated that inventory levels are balanced and that pre-buy activity was limited, with no significant channel build-up expected.
• Joseph Ritchie (Goldman Sachs) questioned the mix of price versus volume in guidance. Adams explained that current guidance incorporates both improved pricing and ongoing unit volume growth, with flexibility to adjust if market conditions shift.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) adoption rates and customer response to the Elkay Pro Filtration system and other new product launches, (2) continued progress on supply chain localization and reduction of tariff exposure, and (3) legislative developments around water quality requirements, especially in key end markets like education. The company’s ability to sustain margin expansion amid changing input costs will also be a focal point.

Zurn Elkay currently trades at $45.29, up from $38.33 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

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