EACO Corporation Reports 23% Net Income Increase in Q2 Fiscal 2025

EACO Corporation reported a significant increase in financial performance for the second quarter and first half of fiscal 2025, ending February 28, 2025. The company achieved a net income of $6.8 million for the three months ended February 28, 2025, compared to $5.5 million for the same period in the previous year, marking a 23% increase. For the six months, net income rose to $13.7 million from $7.3 million, reflecting an increase of 88%. Total comprehensive income for the second quarter was $6.7 million, up from $5.5 million in the prior year, while total comprehensive income for the first half reached $13.5 million, compared to $7.2 million in the previous year.

EACO's revenue also saw substantial growth, with net sales for the second quarter increasing by 20.2% to $100.1 million from $83.3 million year-over-year. For the first half, net sales rose 18.6% to $194.1 million from $163.6 million. The increase in revenue was attributed to a higher inventory stock and an increase in sales personnel, which grew from 414 to 445 employees in the second quarter. The company successfully captured larger customer orders, although this slightly impacted profit margins, which decreased from 30% to 29.5% in the second quarter.

In terms of operational developments, EACO completed the purchase of its corporate headquarters in Anaheim, California, for $31 million in cash on October 20, 2023. This acquisition is expected to enhance operational efficiency and reduce leasing costs. The company also reported a decrease in accrued expenses, which fell from $24.9 million to $15.5 million, indicating improved cash management. EACO's total assets increased to $199.8 million as of February 28, 2025, up from $188.5 million at the end of the previous fiscal year, driven by higher inventory levels and cash reserves.

Looking ahead, EACO anticipates continued growth driven by its strategic investments and operational efficiencies. The company has maintained a $20 million line of credit, which remains untapped, providing additional liquidity for future investments. However, EACO also faces potential risks from market conditions, including tariffs and trade sanctions that could impact costs and supply chains. The company has accrued $7.6 million in anticipation of a settlement related to a class action lawsuit, which is expected to be funded through existing cash and operational cash flow. Overall, EACO's management remains optimistic about the company's growth trajectory and operational stability in the coming quarters.