BAB, Inc. Reports 18.1% Revenue Growth and Increased Net Income for Q3 2026

BAB, Inc. reported a notable increase in financial performance for the third quarter and the first nine months of fiscal 2026, as detailed in its latest 10-Q filing. For the three months ending August 31, 2026, the company generated total revenues of $907.9 million, an increase of 18.1% from $768.5 million in the same period last year. Net income for the quarter rose to $227.4 million, compared to $167.6 million in the prior year, resulting in earnings per share of $0.03, up from $0.02. For the nine-month period, total revenues reached $2.435 billion, a 4.3% increase from $2.334 billion, with net income climbing to $533.4 million from $438.2 million.

The company experienced significant changes in its revenue streams, particularly in marketing fund revenue, which surged by 61.5% to $301.9 million for the quarter, driven by increased marketing fund expenses. Royalty fees from franchised stores also saw a modest increase of 3.7%, totaling $530.9 million. However, licensing fees and other income decreased slightly to $72.1 million, reflecting a decline in settlement revenue. The overall increase in revenue was attributed to the growth in marketing fund activities, which are recognized in tandem with related expenses under U.S. GAAP.

Operationally, BAB, Inc. maintained a stable franchise network, with 59 franchise units and 3 licensed units in operation as of August 31, 2026, down from 60 and 4, respectively, a year earlier. The company has six additional units under development. The total employee count remained at 9, with 7 full-time and 2 part-time employees, reflecting a consistent workforce dedicated to corporate management and oversight. The company’s cash and restricted cash increased to $2.751 million, up from $2.427 million a year prior, indicating improved liquidity.

The filing also highlighted the company's strategic focus on cost management, with total operating expenses decreasing by 1.9% to $1.734 billion for the nine months ended August 31, 2026. This reduction was primarily due to lower payroll expenses following employee retirements and reduced hours. The company continues to evaluate its expenses in light of rising operational costs, while also planning to pay dividends semi-annually, subject to profitability and board approval.

Looking ahead, BAB, Inc. remains optimistic about its growth trajectory, with management emphasizing the importance of attracting new franchisees and enhancing brand awareness. The company is also focused on leveraging synergies between its brands, including Big Apple Bagels and My Favorite Muffin, to drive revenue growth. The outlook suggests a commitment to maintaining operational efficiency while exploring opportunities for expansion in existing and new markets.