Iron foundries took more of Mueller Water Products’ capital spending in the latest three months, as the company invested more heavily there than a year earlier. That is a small operational detail with a larger companion: inventory reached $379.8 million, up 20% from the comparable period, while revenue rose just 4.1%.
The headline numbers are clean enough. Revenue increased to $395.9 million, and net income rose 28.2% to $67.3 million. Gross margin expanded by one percentage point to 39.4%, while operating margin reached 20.4%.
The explanation is less one-piece. Mueller said higher pricing across most product lines helped, but lower volumes, inflation and product mix pushed the other way. The company also included non-recurring tariff refunds in its explanation for the improvement.
"This increase was primarily a result of higher pricing across most product lines, non-recurring tariff refunds, and performance partially offset by lower volumes, approximately 5% inflation, and product mix."
Mueller Water Products, 10-Q, Aug. 6, 2026
So the three-month period produced more profit from a combination of price, cost and one-time trade-policy effects, even as physical volume declined. The filing does not disclose why inventory rose so much faster than sales.
Mueller also spent less on selling, general and administrative costs in the period. SG&A fell $7.0 million, or 9.9%, to $64.0 million, with the company citing lower foreign-exchange pressure and incentive compensation, partly offset by inflation.
"Selling, general and administrative expenses (“SG&A”) for the three months ended June 30, 2026 were $64.0 million as compared with $71.0 million in the prior year period, a decrease of $7.0 million or 9.9%, primarily due to lower unfavorable impact of foreign currency exchange and incentive-based compensation partially offset by inflation of approximately 3%."
Mueller Water Products, 10-Q, Aug. 6, 2026
That expense reduction helped operating income climb 9.4% to $80.6 million. Diluted shares barely changed, so the 30.3% increase in diluted EPS to $0.43 mostly tracks the improvement below revenue, not a shrinking share count doing the work.
The balance-sheet detail keeps the filing from reading like a simple pricing story. Accounts receivable edged down 1.1% to $203.2 million, while inventory moved sharply higher. Capital expenditures also rose 32.9%, with Mueller specifically pointing to higher spending at its iron foundries. Cash generation did not move in lockstep with the inventory build: free-cash-flow margin was 10.1%, only 0.2 percentage points higher than a year earlier.
The company’s annual results show a broader version of the same operating progression. Revenue reached $1.4 billion in fiscal 2025, while operating margin rose to 18.2% from 10.0% in fiscal 2023. In the latest filing, management again described higher pricing and volumes as drivers in its Water Management Solutions business over nine months, but the three-month disclosure specifically says lower volumes were part of the offset.
That leaves one factual thread for Mueller’s next quarterly report: whether inventory growth remains above sales growth and how the company describes tariff refunds once the non-recurring benefit is no longer in the comparison. More price and better margins arrived together with more stock on hand. The filing’s trade-off is industrial: charge more, spend less, and keep an eye on the warehouse.
Source: Mueller Water Products’ 10-Q filed Aug. 6, 2026.