Q1’26 Net Sales Increased 29% to a Record $46.7 Million Led by a 100% Increase in Fire Services Products, Representing 45% of Total Revenue
U.S. Net Sales Increased 42% to $22.5 Million & Europe Net Sales Increased 102% to $12.1 Million
Q1’26 Represented Full Impact of Tariff Uncertainty & Associated Mitigation Strategies to Build Inventory
Improving Global Tariff Environment & Reduction in Mitigation Strategies Positions Company for Sequential Growth in Gross Margin and Adjusted EBITDA Excluding FX in Q2’26
Maintains Previously Issued FY 2026 Revenue and Adjusted EBITDA Excluding FX Guidance Range
Management to Host Conference Call Today at 4:30 p.m. Eastern Time
HUNTSVILLE, Ala., June 09, 2025 (GLOBE NEWSWIRE) — Lakeland Industries, Inc. (“Lakeland Fire + Safety” or “Lakeland”) (NASDAQ:LAKE), a leading global manufacturer of protective clothing and apparel for industry, healthcare and first responders, has reported its financial and operational results for its fiscal first quarter ended April 30, 2025.
Key Fiscal FY 2026 First Quarter and Subsequent Financial and Operational Highlights
| Q1 Comparison | |||||||
| $ in millions | FY Q1’26 | FY Q1’25 | $ Change YoY | % Change YoY | |||
| Net Sales | $46.7 | $36.3 | $10.4 | 29% | |||
| Gross Profit | $15.6 | $16.2 | ($0.6) | (4%) | |||
| Gross Margin | 33.5% | 44.6% | – | 1,110BPS | |||
| Net (Loss) Income | ($3.9) | $1.7 | ($5.6) | (337%) | |||
| Adjusted EBITDA | ($0.2) | $3.8 | ($4.0) | (105%) | |||
| Adjusted EBITDA ex. FX | $0.6 | $3.8 | ($3.2) | (84%) | |||
Management Commentary
“The first quarter of fiscal 2026 was highlighted by continued sales revenue growth of 29%, led by a 100% increase in Fire Services revenue and ongoing momentum from our recent acquisitions,” said Jim Jenkins, President, Chief Executive Officer and Executive Chairman. “Robust growth in our U.S. Fire Services Segment – both organic and acquisition-driven – was partially offset by softness in Latin America and Canada, where margins are typically above our corporate average. While first quarter revenue approached internal expectations, shortfalls in Latin America, due mainly to shipment timing, and in Canada, largely due to tariff-related delays, impacted results. Our outlook for Latin America and Canada remains positive, and we believe that once uncertainty surrounding tariffs subsides, momentum in these markets will rebound. To that end, we continue to focus on expanding opportunities in Latin America and expect a resumption of growth in FY26. Additional factors affecting revenue included tariff uncertainty and currency issues, as well as Pacific Helmets resulting from production issues and updates to product offerings. We continue to believe that a significant Jolly fire boots order—originally anticipated for shipment in Q2 of FY25—is still likely to materialize. While timing remains subject to the Italian Government’s final procurement steps, we remain encouraged by ongoing engagement and the customer’s reaffirmed intent to proceed.
“Looking ahead, we are focused on navigating the continued challenges from tariff uncertainties, growing top-line revenue in our fire services and industrial verticals, and implementing operating and manufacturing efficiencies to achieve higher margins. We also continue to pursue M&A opportunities, particularly within the fire suit rental, decontamination and services business, to further consolidate the fragmented fire market. Our acquisition pipeline remains strong, and we are actively engaged in several strategic discussions that align with our growth strategy. We believe that with the four recently completed acquisitions, which added product line extensions, innovative new products, and expanded our global markets, channels, and customer base, we are well-positioned to grow our global head-to-toe fire portfolio in this fragmented market. We look forward to sharing upcoming milestones in weeks and months ahead,” concluded Mr. Jenkins.
Tariff Mitigation Measures Updates
- Inventory Buildup:
- Increase in net inventories of $3.1 million ahead of imposed tariffs.
- Inventories on April 30, 2025, totaled $85.8 million.
- Tariff Mitigation Measures Updates:
- Strategic inventory stocking, including raw materials and finished goods
- Production shift in Asia to lower-tariff countries
- Lakeland Mexico’s USMCA-compliant products are tariff-exempt
- Production of Lakeland Fire Gear in the U.S. at Veridian
Fiscal 2026 First Quarter
- Net sales were a record $46.7 million for the first quarter of fiscal 2026, an increase of $10.4 million or 29% compared to $36.3 million for the first quarter of fiscal 2025, driven by a 100% increase in Fire Services.
- Organic revenue(1) increased 2% to $36.9 million for the first quarter of fiscal 2026, compared to $36.3 million for the first quarter of fiscal 2025, due to strong growth in the U.S. and Europe, partially offset by weakness in Latin America and Canada.
- Organic gross margin(1) decreased by 870 margin points to 35.9% for the first quarter of fiscal 2026, compared to 44.6% for the first quarter of fiscal 2025, due primarily to lower sales in our higher margin Latin American and Canadian markets and material price variance allocations.
- Sales of the Fire Services product line were $21.0 million for the first quarter of fiscal 2026, an increase of $10.5 million or 100% compared to $10.5 million for the first quarter of fiscal 2025.
- Fire segment as a percentage of revenue grew to 45%.
- U.S. net sales were $22.5 million for the first quarter of fiscal 2026, an increase of $6.6 million or 42% compared to $15.9 million for the first quarter of fiscal 2025.
- Europe net sales, including Eagle, Jolly and LHD, were $12.1 million for the first quarter of fiscal 2026, an increase of $6.1 million or 102% compared to $6.0 million for the first quarter of fiscal 2025.
- LATAM net sales were $4.3 million for the first quarter of fiscal 2026, a decrease of $0.6 million or 12% compared to $4.9 million for the first quarter of fiscal 2025.
- Asia net sales were $12.0 million for the first quarter of fiscal 2026, an increase of $1.6 million or 15% compared to $10.4 million for the first quarter of fiscal 2025.
- Gross profit for the first quarter of fiscal 2026 was $15.6 million, a decrease of $0.6 million, or 4%, compared to $16.2 million for the first quarter of fiscal 2025.
- Adjusted EBITDA excluding FX(2) for the first quarter of fiscal year 2026 was $0.6 million, a decrease of $3.2 million, or 84%, compared with $3.8 million for the first quarter of fiscal 2025.
- Lakeland’s LHD subsidiary has secured a contract renewal of up to 12 years with Fire and Emergency New Zealand (FENZ), New Zealand’s main firefighting and emergency services body, for a range of apparel and decontamination services, extending an established and longstanding relationship of over 22 years.
- Attended the 37th Annual Roth Conference and the Oppenheimer 10th Annual Emerging Growth Conference.
(1)Organic revenue and organic gross margin are total revenue and total gross margin, each excluding the effects of recent acquisitions, which management uses to assess the growth of its legacy business. Reconciliations are provided in the tables of this press release.
(2)Adjusted EBITDA and Adjusted EBITDA excluding FX are non-GAAP financial measures. Reconciliations are provided in the tables of this press release.
Fiscal 2026 First Quarter Financial Results
Net sales were $46.7 million for the first quarter of fiscal 2026, an increase of $10.4 million or 29% compared to $36.3 million for the first quarter of fiscal 2025. Sales from our recent acquisitions accounted for $9.9 million of the increase, while organic sales increased $0.6 million, or 2%, over the prior year. Sales of the Fire Services product line increased by $10.5 million year-over-year, driven by $9.9 million in sales from Veridian and LHD, as well as organic Fire Services growth of $0.6 million.
On a consolidated basis, for the first quarter of fiscal year 2026, domestic sales were $20.7 million, or 44% of total revenues, and international sales were $26.0 million, or 56% of total revenues, as our recent acquisitions continue to skew growth internationally. This compares with domestic sales of $14.3 million, or 39% of the total, and international sales of $22.0 million, or 61%, in the first quarter of fiscal year 2025.
Gross profit for the first quarter of fiscal 2026 was $15.6 million, a decrease of $0.6 million, or 4%, compared to $16.2 million for the first quarter of fiscal 2025. Gross profit as a percentage of net sales decreased to 33.5% for the first quarter of fiscal 2026 from 44.6% for the first quarter of fiscal 2025. Gross margin percentage decreased in the first quarter of fiscal 2026 due to geographic revenue mix, combined with lower margins and the impact of purchase accounting in our acquired businesses, and higher manufacturing and freight costs. Margins in the acquired businesses were impacted by the amortization of the write-up in inventory as part of purchase accounting. Organic gross margin percentage decreased to 35.9% from 44.6% for the first quarter of fiscal 2026, primarily due to lower sales in our higher-margin Latin American and Canadian markets and material price variance allocations.
Operating expenses increased by $6.3 million, or 45%, from $14.0 million for the first quarter of fiscal 2025 to $20.3 million for the first quarter of fiscal 2026. Operating expenses increased due to the acquisitions of Veridian and LHD, which added $3.0 million to operating expenses, as well as severance costs, litigation expenses, and selling expenses. Adjusted operating expenses increased by $3.3 million, primarily due to acquired companies’ operating expenses. Operating loss was $4.6 million for the first quarter of fiscal 2026, compared to an operating profit of $2.2 million for the first quarter of fiscal 2025, primarily due to the aforementioned impacts. Operating margins were (9.9%) for the first quarter of fiscal 2026, as compared to 6.1% for the first quarter of fiscal 2025.
Net loss was ($3.9) million, or ($0.41) per diluted earnings per share, for the first quarter of fiscal 2026, compared to net income of $1.7 million, or $0.22 per diluted earnings per share, for the first quarter of fiscal 2025.
Adjusted EBITDA excluding FX for the first quarter of fiscal year 2026 was $0.6 million, a decrease of $3.2 million, or 84%, compared with $3.8 million for the first quarter of fiscal year 2025. The decrease was driven by a materials purchase variance, where the full amount was reflected in COGS, rather than being partially capitalized and that we expect to reverse in subsequent quarters.
Cash and cash equivalents totaled $18.6 million as of April 30, 2025, and working capital was approximately $104.4 million. Cash and cash equivalents increased by $1.1 million, and working capital increased by $2.8 million from January 31, 2025, due to the balance sheet fluctuations.
As of April 30, 2025, we had borrowings of $19.8 million outstanding under the revolving credit facility, with an additional $20.2 million of available credit under the Loan Agreement.
Net cash used in operating activities was $4.8 million in the three months ended April 30, 2025, compared to net cash provided of $0.3 million in the three months ended April 30, 2024. The increase was driven by a net loss of ($3.9) million and an increase in working capital of $3.0 million, offset by non-cash charges of $2.1 million.
The Company’s quarterly dividend of $0.03 per share was paid on May 22, 2025, to stockholders of record as of May 15, 2025.
Roger Shannon, Lakeland’s Chief Financial Officer, added, “Our Fire Services acquisitions continued to support revenue growth in the fiscal first quarter. Revenue grew $10.4 million, or 29%, compared to the first quarter of fiscal year 2025. Veridian contributed revenue of $4.4 million in the first quarter. Revenues for Eagle, Pacific Helmets, Jolly, LHD and Veridian totaled $15.6 million. Organic revenue increased 2% to $36.9 million in the first quarter, driven by a return to growth in the U.S. and Europe.
“Our first quarter consolidated gross margin decreased to 33.5% due to geographic revenue mix coupled with lower margins in our acquired businesses, and higher manufacturing costs. Our margins in the acquired businesses were impacted by the amortization of the inventory write-up as part of the purchase accounting. This accounting treatment affected reported margins by $0.4 million. Profit in ending inventory is currently $1.3 million, having increased by approximately $0.3 million in the quarter due to a build-up in inventory, which slightly reduces the reported gross margin. Freight expenses were approximately $0.6 million above typical levels, driven by increased U.S. customer demand following the suspension of U.S. tariffs on certain personal protective equipment (PPE) products. To a lesser degree, Gross Profit was also diluted by acquisitions (LHD and Veridian), for which we are still working through the purchase accounting.
“Operating expenses increased by $6.3 million for the quarter, of which $3.0 million was attributable to the acquisition of Veridian and LHD, as well as severance costs, litigation expenses, and higher selling expenses.
“Adjusted EBITDA excluding FX was $0.6 million for the fiscal first quarter. The shortfall was a direct result of revenue falling in key high-margin regions, the impact of the purchase variance described above, elevated freight costs resulting from tariff-related inventory build, and dilution from acquisitions. We also experienced higher-than-expected SG&A expenses, including increased travel and trade show participation, as well as commission and incremental operating costs associated with the acquisition of Veridian. Considering that we completed four major acquisitions in the past twelve months, the full integration and implementation of which does take some time, we believe those benefits will begin translating into even greater improved financial performance, which will be recognized in the coming quarters.
“We maintain a strong balance sheet and expect a meaningful cash infusion from non-core asset dispositions and insurance recoveries from PFAS-related legal expenses. We have also identified up to $4 million in cash savings, excluding Veridian consolidation, which we believe will further improve financial performance and be recognized in the coming quarters. Additionally, we have listed our Decatur facility and are pursuing a short-term sale-leaseback transaction to enhance our financial flexibility as we evaluate more strategically located facilities. We anticipate that this transaction will be closed during the current fiscal year.
“Despite margin pressure in Q1, we remain confident in our long-term trajectory and current year outlook. Looking further ahead, we believe our cost discipline, acquisition strategy, and operational improvements will position the company for accelerated growth over the next three to four years. We continue to target EBITDA margins to expand incrementally, reaching the mid-to-high teens as we gain scale over the next 3-5 years, realize efficiencies, and drive stronger mix and pricing across our platform,” concluded Shannon.
FY 2026 Guidance and Outlook
This guidance is based on our current backlog of orders and current expectations. These metrics constitute forward-looking statements and are based on current expectations. For a discussion of factors that could cause actual results to differ materially from these metrics, see “Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995” below.
Revenue – We expect FY 2026 Revenue of $210 to $220 million. This Revenue expectation includes the recently completed Veridian acquisition.
Adjusted EBITDA excluding FX — Due to lower margins, near-term order delays, uncertainty related to tariffs and higher operating expenses in the first quarter, we expect FY 2026 Adjusted EBITDA, excluding any material negative impact from foreign exchange, to be in the lower end of a range of $24 million to $29 million.(1)
(1) Excluding revenue, the Company does not provide guidance on a GAAP basis as certain items that impact Adjusted EBITDA, such as equity compensation, foreign exchange gains or losses, acquisition expenses and employee separation expenses, which may be significant, are outside the Company’s control and/or cannot be reasonably predicted. Please see the “Reconciliation of GAAP Results to Non-GAAP Results” and the related footnotes at the end of this press release for detailed information on calculating non-GAAP measures. See the non-GAAP financial reconciliation tables in this release for a reconciliation of other non-GAAP financial measures.
Fiscal First Quarter 2026 Results Conference Call
Lakeland President, Chief Executive Officer and Executive Chairman Jim Jenkins and Chief Financial Officer Roger Shannon will host the conference call, followed by a question-and-answer period. The conference call will be accompanied by a presentation, which can be viewed during the webcast or accessed via the investor relations section of the Company’s website here.
To access the call, please use the following information:
| Date: | Monday, June 9, 2025 |
| Time: | 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) |
| Dial-in: | 1-877-407-9208 |
| International Dial-in: | 1-201-493-6784 |
| Conference Code: | 13754098 |
| Webcast: | https://viavid.webcasts.com/starthere.jsp?ei=1722482&tp_key=314f41cd21 |
A telephone replay will be available commencing approximately three hours after the call and will remain available through September 9, 2025, by dialing 1-844-512-2921 from the U.S., or 1-412-317-6671 from international locations, and entering replay pin number: 13754098. The replay can also be viewed through the webcast link above, and the presentation utilized during the call will be available via the investor relations section of the Company’s website here.
| LAKELAND INDUSTRIES, INC. AND SUBSIDIARIES Operating Results ($000) (Unaudited) Reconciliation of GAAP Results to Non-GAAP Results |
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| Three Months Ended | |||
| April 30, | |||
| 2025 | 2024 | ||
| Net income (loss) to EBITDA | |||
| Net income (loss) | ($3,913) | $1,653 | |
| Interest expense | 583 | 172 | |
| Taxes (1) | (1,198) | 388 | |
| Depreciation and amortization | 1,138 | 647 | |
| EBITDA | ($3,390) | ||