Lakeland Industries, Inc. (NASDAQ: LAKE) Q1 2026 Earnings Call | 06/10/2025

about 2 months ago

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AI Summary

Key Financial Results (Q1 2026):

Record Net Sales: $46.7 million, a 29% year-over-year increase. This was driven by a 100% increase in fire services products and the impact of recent acquisitions.
U.S. Sales: Increased 42% year-over-year to $22.5 million, with organic U.S. growth of 15%.
European Sales: Increased 102% year-over-year to $12.1 million.
Gross Profit Margin: Decreased to 33.5% from 44.6% in the prior year, due to a shift in geographic revenue mix, lower margins from recent acquisitions, and purchase accounting impacts.
Adjusted EBITDA (excluding FX): $0.6 million, down from $3.8 million in the prior year. This was impacted by purchase price variances and higher organic SG&A.
Net Loss: $3.9 million, or $0.41 per share, compared to net income of $1.7 million, or $0.22 per share, in the prior year.
Cash and Equivalents: $18.6 million as of April 30, 2025.

Strategic Initiatives and Outlook:

Focus on Growth: Lakeland is focused on growing revenue in its fire services and industrial verticals.
Operational Efficiency: The company is implementing operating and manufacturing efficiencies to improve margins.
Tariff Mitigation: Lakeland is navigating tariff uncertainties by diversifying its manufacturing footprint and employing mitigation strategies, including cross-certification of products and exploring lower-tariff manufacturing regions.
Strategic Acquisitions: The company is actively pursuing acquisitions in the fragmented fire market to expand its product offerings and global footprint. Recent acquisitions include Viridian and LHD.
ERP System Implementation: Lakeland is implementing a new company-wide SAP ERP system to enhance and consolidate its systems.
Inventory Buildup: Inventory has increased to $85.8 million due to tariff mitigation measures.
Full Year 2026 Guidance: Lakeland maintains its revenue guidance of $210 million to $220 million. However, due to lower margins and higher operating expenses in Q1, it expects adjusted EBITDA (excluding FX) to be at the lower end of its previously issued range of $24 million to $29 million.
Long-Term Strategy: Lakeland aims to grow its fire services and industrial PPE verticals, focusing on operational efficiencies and strategic acquisitions. The company anticipates steady expansion in EBITDA margins over the next 3-5 years, moving into the mid to high-teens range.

Key Takeaways:

Lakeland Fire and Safety reported strong revenue growth in the first quarter of fiscal year 2026, driven by its fire services segment and recent acquisitions. However, profitability was impacted by lower gross margins and higher operating expenses. The company is focused on improving operational efficiency, integrating its acquisitions, and navigating tariff uncertainties. Lakeland maintains a positive long-term outlook, driven by its strategic initiatives and strong position in the fire and industrial safety markets.

About this video

Lakeland Industries, Inc. (NASDAQ: LAKE) reported Q1 2026 results on June 10, 2025, with net sales rising 29% year-over-year to a record $46.7 million, driven by a 100% increase in Fire Services products, which now comprise 45% of total revenue. U.S. sales grew 42% to $22.5 million, and European sales surged 102% to $12.1 million, reflecting robust demand and contributions from recent acquisitions. However, Latin America sales fell 12% to $4.3 million, and gross profit declined 4% to $15.6 million as gross margin contracted to 33.5% from 44.6% a year ago, primarily due to geographic mix, lower margins in acquired businesses, and higher manufacturing and freight costs. The company posted a net loss of $3.9 million (–$0.41 per share), compared to net income of $1.7 million ($0.22 per share) in Q1 2025, as operating expenses rose 45% to $20.3 million, largely due to acquisition-related costs and higher selling and administrative expenses. Adjusted EBITDA excluding FX dropped sharply to $0.6 million from $3.8 million last year. Despite these profitability challenges, management reaffirmed its full-year FY2026 revenue and adjusted EBITDA guidance, citing optimism for sequential margin improvement as tariff uncertainties ease and cost mitigation strategies take hold. Outlook: FY2026: Revenue guidance maintained at $210–$220 million Focus on margin recovery, cost controls, and leveraging recent acquisitions Anticipates sequential gross margin and EBITDA improvement in Q2 as tariff environment stabilizes About Inside Ticker: For more expert analysis and real-time updates on Lakeland Industries, Inc. (NASDAQ: LAKE) and other market movers, follow Inside Ticker and visit InsideTicker.com for in-depth reports, financial insights, and the latest news on leading companies. #LakelandIndustries #LAKE #EarningsCall #Q12026 #FireServices #RecordRevenue #NetLoss #Margins #PPE #Investing #InsideTicker

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