Q.E.P. CO., Inc. Reports Fiscal 2026 Nine Month and Third Quarter Financial Results

Q.E.P. CO., INC. (OTCQX: QEPC) (the “Company” or “QEP”) today reported its consolidated results of operations for the first nine months and third quarter of fiscal year 2026, which ended on November 30, 2025. Net Sales Net sales for the nine months ended November 30, 2025 were $178.3 million, compared to $187.2 million in the same period of fiscal 2025, a decrease of $8.9 million, or 4.7%. Net sales for the third quarter were $59.1 million, compared to $61.1 million in the third quarter of fiscal 2025, a decrease of $2.0 million or 3.2%. The decrease reflects continued pressure on home improvement spending amid economic uncertainty and elevated interest rates. Gross Profit and Margin Gross profit for the first nine months of fiscal 2026 was $63.6 million, compared to $66.5 million in the prior year period, a decrease of $2.9 million, or 4.4%. Third quarter gross profit was $20.3 million, compared to $21.7 million in the third quarter of fiscal 2025, a decrease of $1.4 million, or 6.4%. Gross margin for the first nine months and third quarter of fiscal 2026 was 35.7% and 34.4%, respectively, compared to 35.5% in each of the corresponding periods of fiscal 2025. Third quarter gross margin reflects the impact of recent tariff increases that were partially offset in prior periods by the sale of inventory purchased before the tariffs were implemented. Operating Expenses Operating expenses totaled $48.8 million for the first nine months of fiscal 2026 and $15.9 million for the third quarter, representing 27.3% and 26.8% of net sales, respectively. This compares to operating expenses of $50.0 million and $15.5 million, or 26.7% and 25.5% of net sales, respectively, in the comparable fiscal 2025 periods. The change reflects lower variable freight costs, partially offset by higher personnel-related expenses supporting selling and marketing initiatives. Interest Income and Taxes Interest income from invested cash totaled $0.7 million for the first nine months of fiscal 2026 and $0.2 million for the third quarter, relatively unchanged from the comparable fiscal 2025 periods. The provision for income taxes as a percentage of income before taxes was 26.0% for both the first nine months and third quarter periods, compared to 28.0% in the corresponding fiscal 2025 periods. Net Income Net income from continuing operations for the first nine months of fiscal 2026 was $11.5 million, or $3.53 per diluted share, compared to $12.3 million, or $3.74 per diluted share, in the comparable fiscal 2025 period. Net income from continuing operations for the third quarter was $3.5 million, or $1.08 per diluted share, compared to $4.6 million, or $1.40 per diluted share, in the prior-year quarter. EBITDA Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations for the first nine months of fiscal 2026 was $16.0 million, or 9.0% of net sales, compared to $17.5 million, or 9.4% in the comparable fiscal 2025 period. Third quarter adjusted EBITDA was $4.9 million, or 8.3% of net sales, compared to $6.5 million, or 10.6% in the prior-year quarter. Cash Flow and Liquidity Cash provided by operating activities during the first nine months of fiscal 2026 was $15.8 million, compared to $16.1 million in the first nine months of fiscal 2025. The change primarily reflects current-year payments to suppliers related to inventory built in the prior year in anticipation of tariff implementation. During the first nine months of fiscal 2026, cash provided by operations, together with proceeds from the sale of a business, was used to fund capital expenditures, repurchase shares of common stock, and return capital to stockholders through dividends. During the comparable fiscal 2025 period, cash provided by operations and proceeds from the sale of businesses were used to fund capital expenditures, dividends, share repurchases, and to increase cash balances. As of November 30, 2025, working capital was $71.3 million, compared to $67.4 million at the end of fiscal 2025. Aggregate available cash, net of outstanding debt, totaled $36.1 million, compared to $28.4 million at the end of fiscal 2025. Management Commentary “In light of the current consumer uncertainty and continued pressure in housing, I am very proud of the QEP Team for delivering such strong performance in a difficult environment. Our balance sheet remains strong, as is our commitment to returning capital to stockholders,” said Len Gould, President and Chief Executive Officer. “We continue to adhere to our plan for long-term Pro-share growth. The investments we've made consistently over the last several years have strengthened our distinct competitive advantages and position us well to do just that. I would like to thank our associates for their continued hard work and dedication." Investor Inquiries Investor inquiries may be directed to ir@qep.com.... Read more

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