AAR Corp. (NYSE: AIR) closed fiscal 2026 with a record fourth quarter in which sales rose 23% to $928.0 million and adjusted earnings per share rose 32% to $1.53, and the more consequential move is that management paired that print with the exit from its last asset-heavy legacy business and fresh fiscal 2027 guidance that points to a continued re-rating from diversified aviation holding company into a focused parts, repair, and software aftermarket platform. The fourth quarter, the three months ended May 31, 2026, reported on July 21, 2026, saw adjusted EBITDA of $116 million, up 27% year over year, with adjusted EBITDA margin of 12.5% edging up from 12.4% despite the short-term dilution of the HAECO Americas heavy-maintenance acquisition that closed in November 2025.
The thesis we hold is that the equity is being repriced for the transformation that has already been delivered in the numbers, not for a promise. Over the course of fiscal 2026, AAR folded four acquisitions into its Parts Supply and Repair, Engineering, and Software segments, shifted its sales mix toward higher-margin new parts distribution, and announced the wind-down of the Legacy Commercial Programs segment that tied up large pools of rotable inventory at low returns. The result is that adjusted EBITDA margin expanded from 11.8% to 12.1% for the fiscal year while adjusted EBITDA grew 24% to $401 million, and management guided first-quarter fiscal 2027 sales growth of 21% to 23% excluding the soon-to-be-closed legacy business. We read the market as pricing AAR closer to a durable aftermarket compounder than to the lumpy maintenance-services name it has historically been.
The load-bearing risk is that the acquisition-driven growth story is priced to continue compounding, and the wind-down of the legacy segment removes roughly 5% of sales while freeing rotable inventory for sale. The falsifiable clock is the first fiscal 2027 quarter, reported around September 2026, which must hold the guided 21% to 23% sales growth and 12.25% to 12.75% adjusted EBITDA margin to validate that the platform is growing into its multiple rather than buying its way there.