Core Viewpoint - McRae Industries, Inc. reported a slight increase in consolidated net revenues for the second quarter and first six months of fiscal 2026 compared to the same periods in fiscal 2025, but net earnings decreased in both periods. Financial Performance - Consolidated net revenues for Q2 fiscal 2026 were $27,948,000, up from $27,548,000 in Q2 fiscal 2025, reflecting a growth of 1.4% [1][3] - Net earnings for Q2 fiscal 2026 were $956,000, or $0.42 per diluted Class A common share, down from $1,053,000, or $0.47 per diluted Class A common share in Q2 fiscal 2025, a decrease of 9.2% [1][3][23] - For the first six months of fiscal 2026, consolidated net revenues totaled $59,151,000, compared to $56,250,000 in the same period of fiscal 2025, an increase of 3.4% [2][6] - Net earnings for the first six months of fiscal 2026 were $2,404,000, or $1.07 per diluted Class A common share, down from $2,899,000, or $1.28 per diluted Class A common share in the first six months of fiscal 2025, a decrease of 17.1% [2][8][23] Revenue Breakdown - In Q2 fiscal 2026, sales from western/lifestyle boot products were $21.4 million, up from $20.4 million in Q2 fiscal 2025, driven by the Dan Post and Dingo brands [3] - Revenue from work boot products decreased from $7.5 million in Q2 fiscal 2025 to $6.7 million in Q2 fiscal 2026, attributed to decreased sales across all work boots, including military boots [3] - For the first six months of fiscal 2026, western and lifestyle product sales were $44.0 million, compared to $41.4 million in the same period of fiscal 2025, while work boot revenues slightly decreased from $15.5 million to $15.4 million [6] Profitability Metrics - Consolidated gross profit for Q2 fiscal 2026 was approximately $7.3 million, or 26.2%, compared to $7.1 million, or 25.9%, in Q2 fiscal 2025 [4] - For the first six months of fiscal 2026, consolidated gross profit totaled $15.3 million, or 25.8%, down from $15.5 million, or 27.5%, in the first six months of fiscal 2025 [7] - Consolidated selling, general and administrative expenses for Q2 fiscal 2026 were approximately $6.7 million, up from $6.4 million in Q2 fiscal 2025, primarily due to increased marketing expenses [4] Financial Condition and Liquidity - As of January 31, 2026, cash and cash equivalents were $29.9 million, down from $31.6 million at August 2, 2025 [10] - Working capital decreased from $85.9 million at August 2, 2025, to $81.6 million at January 31, 2026 [10] - The company has two lines of credit totaling $6.75 million, fully available as of January 31, 2026 [11] Cash Flow and Investments - For the first six months of fiscal 2026, operating activities provided approximately $3.6 million of cash, with net earnings contributing approximately $2.4 million [12] - Net cash used in investing activities totaled approximately $4.0 million, primarily due to the purchase and sale of securities [13] - Net cash used in financing activities was approximately $1.3 million, mainly for dividend payments [13] Shareholder Actions - The Board of Directors approved a stock repurchase program for up to $700,000 of shares of McRae A Common Stock or McRae B Common Stock [14]