Monitor execution of the Legacy Commercial Programs wind-down, including asset sale proceeds and timing of impairments. The recast financials provide a clearer view of core growth segments (Parts Supply +24% LTM sales, Government Solutions improving margins), which may support valuation if margins continue expanding.
Price Chart
Executive Summary
AAR CORP. announced a segment realignment into four operating segments and plans to wind down its low-margin Legacy Commercial Programs business over 3-4 years, which had $252.4M in LTM sales and $160M in net assets. The recast financials show strong sales growth but mixed operating income trends, with the most recent quarter (Feb 28, 2026) posting a 24.6% sales increase but a 7.5% decline in GAAP operating income vs the prior year. Guidance for FY2026 remains unchanged.
Key Facts
- Segment realignment into Parts Supply, Repair Engineering & Software, Government Solutions, and Legacy Commercial Programs (to be wound down)
- Legacy Commercial Programs net assets: ~$160M as of Feb 28, 2026
- LTM ended Feb 28, 2026 Legacy Commercial Programs sales: $252.4M, GAAP operating loss: ($0.2)M, adjusted operating income: $5.0M
- Wind-down expected to take 3-4 years with periodic gains from asset sales
- Consolidated sales for Q3 FY2026 (Feb 28, 2026): $845.1M (+24.6% YoY), operating income: $65.8M (-7.5% YoY)
- FY2026 Q4 and full-year guidance unchanged
Financial Impact
Legacy Commercial Programs has $160M in net assets and contributed $252.4M in LTM sales; wind-down may involve impairments and periodic gains but management expects higher margins and ROIC upon completion.
Risk Factors
- Wind-down execution risk and potential impairment charges
- Revenue and margin dilution from exiting a $252M revenue stream
- Macro headwinds in commercial aerospace demand
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001104659-26-056332 |
| Document: tm2612934d1_ex99-3.htm | 0001104659-26-056332 |
| Document: tm2612934d1_8k.htm | 0001104659-26-056332 |
| Document: tm2612934d1_ex99-2.htm | 0001104659-26-056332 |
| Document: 0001104659-26-056332-index-headers.html | 0001104659-26-056332 |
| Document: 0001104659-26-056332-index.html | 0001104659-26-056332 |
| Document: 0001104659-26-056332.txt | 0001104659-26-056332 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 26, 2026 today | 144 | $97.34 | awaiting T+1 | — | $97.34 (−0.00%) |
Oct 26, 2026 today | 8-K | $94.67 | awaiting T+1 | — | $97.34 (+2.82%) |
Oct 20, 2026 6d ago | 144 | $99.64 $96.67 | ▼ −2.98% | ▼ −1.80% | $97.34 (−2.31%) |
Sep 28, 2026 28d ago | 8-K | $106.75 $101.47 | ▼ −4.95% | ▼ −4.74% | $97.34 (−8.81%) |
Sep 28, 2026 28d ago | Press Release | $106.75 $101.47 | ▼ −4.95% | ▼ −4.74% | $97.34 (−8.81%) |
Sep 24, 2026 4w ago | 8-K | $120.56 $116.11 | ▼ −3.69% | ▼ −4.23% | $97.34 (−19.26%) |
Sep 15, 2026 5w ago | Press Release | $117.23 | awaiting T+1 | — | $97.34 (−16.97%) |
Aug 10, 2026 11w ago | DEFA14A | $142.69 $145.45 | ▲ +1.93% | ▲ +2.25% | $97.34 (−31.78%) |
Aug 4, 2026 11w ago | DEFA14A | $149.43 $146.83 | ▼ −1.74% | ▼ −1.54% | $97.34 (−34.86%) |
Aug 3, 2026 12w ago | Institutional Cluster | $143.06 $149.43 | ▲ +4.45% | ▲ +2.65% | $97.34 (−31.96%) |
US Market Status
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