Lakeland Fire + Safety Reports Fiscal Second Quarter 2026 Financial Results

Core Insights - Lakeland Industries reported a record net sales of $52.5 million for Q2 FY2026, marking a 36% increase year-over-year, driven primarily by a 113% increase in Fire Services revenue, which constituted 49% of total revenue [1][11][24] - The company experienced significant growth in U.S. net sales, which rose 78% to $22.1 million, and European net sales, which increased 113% to $15.1 million [1][11] - Despite the revenue growth, gross margin decreased to 35.9%, down from 39.6% in the previous year, attributed to increased supply chain costs and tariffs [1][15][25] Financial Performance - Net income for Q2 FY2026 was $0.8 million, a significant turnaround from a net loss of $1.4 million in Q2 FY2025 [1][18] - Adjusted EBITDA excluding FX for the quarter was $5.1 million, an increase of 89% compared to $2.7 million in Q2 FY2025, with an adjusted EBITDA margin of 9.6% [1][19][27] - Organic revenue increased by 14% to $42.0 million, with notable contributions from the U.S., Canada, and India, although Latin America showed weakness [11][13][24] Operational Highlights - The company is focusing on inventory optimization initiatives to align inventory levels with demand, particularly in U.S. Critical Environment and other key segments [6][28] - Management anticipates a material recovery in Latin America in Q4 FY2026, despite current delays in purchasing decisions due to tariff uncertainties [3][4] - Lakeland is well-positioned to capitalize on long-term industry trends and aims to transition to higher-margin products and services over the next three to five years [8][29] Guidance and Outlook - The company has adjusted its FY2026 revenue guidance to a range of $210 million to $220 million, reflecting ongoing uncertainties in the global tariff environment [29][33] - Adjusted EBITDA excluding FX is expected to be in the range of $20 million to $24 million for FY2026, influenced by lower margins and higher operating expenses [29][33] - Management remains confident in the company's ability to drive sustained EBITDA improvement despite macroeconomic challenges [31]