Donaldson Targets 7.5% Sales Growth in Fiscal 2027 on Facet

Donaldson Company is guiding for 7.5% top-line revenue growth at the midpoint for fiscal 2027, leaning on recurring replacement-part sales and its record acquisition of Facet to offset industrial market headwinds.

"Businesses have to earn their place in the Donaldson portfolio, requiring market attractiveness, leadership potential, and above-average operating profitability," said Chief Executive Rich Lewis during a presentation at the Jefferies conference.

Fiscal 2027 Financial Guidance and Margins

The filtration manufacturer anticipates adjusted earnings per share between $4.22 and $4.38 for fiscal 2027, which represents approximately 8% growth compared to the prior period. Management also projected a record operating profit margin of 16.9%, marking an expansion of 90 basis points over fiscal 2026 levels.

These targets follow Donaldson's fourth-quarter earnings report, which detailed record fiscal 2026 sales of $3.9 billion, a 5% increase over fiscal 2025, alongside a fourth-quarter revenue figure of $1 billion. As of September 10, 2026, Donaldson Company Inc (NYSE: DCI) shares traded at $88.18, down 1.81% from a previous close of $89.81, according to Finnhub market data.

Impact of the Facet Acquisition

The company growth strategy centers heavily on the integration of Facet, completed on May 4, 2026, as the largest acquisition in Donaldson history. While debt financing and amortization expenses dilute fiscal 2027 earnings per share by approximately $0.12, underlying organic EPS growth is expected to land at about 9%.

Facet brings distinct financial characteristics to the parent organization, operating at profit margins roughly twice Donaldson corporate average. About 70% of Facet revenue comes from replaceable consumable parts, providing expanded exposure to the aerospace and defense sectors.

Replacement Parts and Supply Chain Resilience

Donaldson broader business model relies heavily on recurring aftermarket demand, with more than two-thirds of total company revenue generated from replacement parts. This recurring revenue stream provides a cushion against cyclical downturns in original equipment manufacturing.

To mitigate global supply chain disruptions, approximately 75% of Donaldson sales are manufactured in-region relative to where the products are ultimately sold. This localized footprint, combined with high-margin consumable revenue from acquisitions like Facet, underpins management margin expansion goals for the upcoming fiscal year.