Ennis, Inc. Reports 3.3% Net Sales Increase in Q2 Fiscal 2026

Ennis, Inc. reported its financial results for the second quarter of fiscal 2026, revealing a net sales increase of 3.3% to $102.0 million compared to $98.7 million in the same quarter of the previous year. For the six months ended August 31, 2026, net sales reached $200.6 million, up 2.4% from $195.9 million in the prior year. The growth in revenue was attributed to contributions from recent acquisitions, which added approximately $2.3 million in the quarter and $6.8 million in the six-month period. However, the company faced challenges with a decrease in sales from its existing business, reflecting weaker customer demand and ongoing pressures in the U.S. printing market.

The company's cost of goods sold (COGS) increased by 4.2% to $71.5 million for the quarter, resulting in a gross profit margin of 29.9%, down from 30.5% in the prior year. The decline in gross profit margin was primarily due to higher costs associated with carbonless paper. Selling, general, and administrative (SG&A) expenses decreased by 4.5% to $16.9 million, reflecting lower incentive compensation and operational changes. Consequently, income from operations rose to $13.6 million, or 13.3% of net sales, compared to $12.4 million, or 12.5% of net sales, in the previous year.

Net earnings for the quarter were $9.4 million, or $0.37 per diluted share, down from $13.2 million, or $0.51 per diluted share, in the same quarter last year. This decrease was largely influenced by a favorable litigation judgment recognized in the prior year and a litigation charge incurred in the current quarter. For the six-month period, net earnings were $19.3 million, or $0.76 per diluted share, compared to $23.0 million, or $0.89 per diluted share, in the prior year.

Operationally, Ennis, Inc. maintained a strong liquidity position with cash and cash equivalents of $54.0 million as of August 31, 2026, an increase from $34.6 million at the end of the previous fiscal period. The company reported a working capital increase of 13.7% to $109.6 million, supported by cash generated from operating activities. The company did not engage in any acquisitions during the current six-month period, contrasting with $34.9 million spent on acquisitions in the same period last year.

Looking ahead, Ennis, Inc. anticipates continued challenges in the printing industry, including consolidation among customers and competitive pricing pressures. The company plans to focus on managing costs and exploring new market opportunities, including potential acquisitions, to enhance its product offerings and maintain its market position. The outlook remains cautious as the company navigates the evolving landscape of the printing industry while leveraging its strong cash position to support operational and capital needs.