10-Q · June 9, 2026
Lakeland Industries reported Q1 FY27 results with revenues of $47.4 million, reflecting a modest increase of 1.4% year-over-year. While the company achieved net income of $0.4 million, a significant improvement from a…
Earnings analysis · 10-Q
LAKE earnings analysis
Filed September 9, 2026 · Our reading of the company's report
The latest report
Lakeland’s second-quarter revenue declined 4.5% year over year to $50.139 million and diluted EPS fell to negative $0.50 from positive $0.08, with the loss including a $3.2 million European goodwill impairment. Gross…
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Lakeland’s second-quarter revenue declined 4.5% year over year to $50.139 million and diluted EPS fell to negative $0.50 from positive $0.08, with the loss including a $3.2 million European goodwill impairment. Gross margin improved to 37.0% and six-month operating cash flow turned positive at $5.397 million, aided by $2.1 million of tariff refunds, inventory reduction and working-capital benefits. The outlook is mixed: management expects liquidity to cover at least twelve months, but Europe remains weak, tariffs remain a margin risk, and the material weakness in foreign reporting controls remains unremediated.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.5
- Segment
- U.S. Operations external sales were $21.3 million, down from $22.1 million year over year; Europe was $12.4 million, down from $15.1 million.
- Segment
- Asia external sales increased to $4.7 million from $3.7 million year over year, while Mexico increased to $1.4 million from $1.1 million.
- Segment
- Other foreign external sales increased to $3.7 million from $3.3 million; Canada declined to $2.5 million from $2.9 million and Latin America declined to $4.1 million from $4.3 million.
- Segment
- Fire Service product sales increased $0.5 million year over year to approximately $26.1 million, while Chemical increased $0.5 million to $6.1 million and Disposables increased $0.2 million to $14.1 million.
- Segment
- High Visibility and High Performance Wear sales were both $0 million in the quarter versus $1.5 million and $2.2 million, respectively, in the prior-year quarter.
What stood out
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Revenue Declined 4.5% Year Over Year
Second-quarter net sales were $50.139 million, down $2.4 million, or 4.5%, from $52.5 million year over year, primarily because the High Performance Wear and High Visibility lines were sold in the first quarter of FY27.
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Gross Margin and Operating Margin Improved
Gross margin improved to 37.0% from 35.8% year over year, supported by $2.1 million of tariff refunds and lower labor, production and material costs. Operating margin improved to negative 6.7% from negative 7.7%, although operating expenses rose to $20.6 million from $19.3 million.
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Fire and Asia Sales Grew
Fire Service sales rose $0.5 million year over year to $26.1 million, while six-month Fire Service sales increased $2.9 million to $49.5 million. Asia external sales also increased $1.0 million to $4.7 million in the quarter.
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Operating Cash Flow Turned Positive
Six-month operating cash flow was $5.397 million versus negative $9.660 million in the prior-year period. Capital expenditures were $1.434 million, primarily for manufacturing replacement equipment and greenfield ISP equipment.
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Cash Increased and Inventory Declined
Cash increased to $17.901 million from $12.515 million at January 31, 2026, while inventories declined to $74.931 million from $82.542 million and revolving-credit borrowings declined to $24.9 million from $28.5 million.
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Monterrey Settlement Added $1.9 Million
The July 2026 Monterrey lease settlement generated a $1.9 million gain and concluded the related litigation. The Company also completed the sale of High Performance and High Visibility assets for $13.2 million of net cash proceeds during the first quarter.
What to watch
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Europe Weakness and Goodwill Impairment
The Company recorded a $3.2 million goodwill impairment for the Europe-based LHD reporting unit after lower-than-expected performance and projected cash flows; no goodwill remains allocated to that reporting unit. Europe operating loss was $3.9 million in the quarter versus operating income of $0.1 million a year earlier.
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Evolving Tariffs Pressure Margins
Tariff policies remain fluid and have increased product costs and affected margins. Although the Company received $2.1 million of tariff refunds during the six months, management states that tariffs are expected to continue affecting operating results and margins while pass-through to customers is uncertain.
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Material Weakness Remains Unremediated
Disclosure controls were not effective as of July 31, 2026 because of an unremediated material weakness involving the completeness and accuracy of foreign reporting packages. Management has not completed and tested all corrective actions, and the remediation program is expected to roll out over several years through a new ERP system.
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New Securities and Derivative Litigation
A securities class action filed February 23, 2026 was amended July 24, 2026 and alleges misleading statements concerning the Company’s business and intercompany transactions; the response deadline is September 24, 2026. A related derivative action was filed May 4, 2026, and potential losses cannot currently be estimated.
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Debt Covenant and Liquidity Exposure
Liquidity depends partly on the revolving credit facility: $24.9 million was outstanding against a $40.0 million commitment at July 31, 2026, leaving $15.1 million available. The Company also disclosed that a lender waiver was required for covenant non-compliance as of January 31, 2026, although it was in compliance at July 31, 2026.
Management's outlook
No quantitative revenue or EPS guidance was provided or changed. Management believes cash, borrowing capacity and expected product-sale cash generation will fund operating and investing requirements, including planned capital expenditures, for at least the next twelve months; it expects to fund $1.4 million of six-month capital expenditures from operating cash flow.
Earlier filings 4
10-K · April 21, 2026
The amended 10-K corrects the shares outstanding to 9,836,286 and otherwise leaves the Original 10-K intact. The Original 10-K details a roll-up strategy in firefighter services and protective apparel with meaningful…
10-K · April 16, 2026
Lakeland Fire + Safety (Lakeland) is executing a roll-up strategy to build a global firefighter services and protective apparel platform, completing multiple acquisitions (Veridian $26.3M, LHD $14.8M, Arizona PPE $4.1M,…
10-Q · December 10, 2024
Lakeland reported Q3 net sales of $45,761,000 versus $31,678,000 a year ago (+$14,083,000, +44.5%), but profitability deteriorated as operating profit fell to $807,000 from $3,621,000 and diluted EPS dropped to $0.01…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.