Jewett-Cameron Reports 21% Sales Decline and Net Loss in Third Quarter

Jewett-Cameron Trading Company Ltd. reported a significant decline in financial performance for the third quarter and nine-month period ending May 31, 2025, as detailed in its latest 10-Q filing. The company recorded sales of $12.6 million for the three months ended May 31, 2025, a decrease of 21% from $15.9 million in the same period last year. For the nine-month period, total sales were $30.9 million, down 9% from $33.9 million in the prior year. The company experienced a net loss of $649,634, or $0.18 per share, compared to a net income of $154,862, or $0.04 per share, for the same quarter in 2024. The decline in revenue was attributed to increased tariffs on imported products, particularly metals, and supply shortages affecting the fencing segment.

The company's operating loss for the quarter was $687,781, compared to a profit of $55,595 in the previous year. The decrease in profitability was driven by higher operational costs and a shift towards lower-margin products. Operating expenses decreased to $2.6 million from $2.9 million, primarily due to a reduction in wages and employee benefits, which fell to $1.5 million from $1.8 million as the company reduced its workforce by 20%. The gross profit margin also declined to 15% from 18.6% year-over-year, reflecting the impact of rising shipping costs and the ongoing rollout of new product display units.

Strategically, Jewett-Cameron has been focusing on diversifying its supplier base to mitigate the impact of tariffs. The company has shifted some production to countries outside of China, which has helped to reduce costs associated with the higher tariffs imposed on Chinese imports. However, the rapid changes in tariff rates have created uncertainty in pricing and demand, leading to a pause in purchases from retailers and consumers. The company is also exploring the sale of its surplus property, previously used for seed operations, which is currently listed for $9 million.

Operationally, Jewett-Cameron has seen a significant increase in accounts receivable, which rose to $6.8 million from $3.7 million, indicating challenges in cash flow management. The company’s inventory also increased to $15.3 million, up from $13.2 million, as it prepared for the busy spring and summer seasons. The company reported a working capital of $18.3 million, down from $20.5 million at the end of the previous fiscal year. The increase in current liabilities to $6.2 million from $2.6 million was primarily due to the new bank indebtedness of $2.4 million drawn against its line of credit.

Looking ahead, Jewett-Cameron anticipates that the challenges faced in the third quarter will continue into the fourth quarter, with sluggish orders and ongoing uncertainty regarding tariff rates. The company plans to enhance operational efficiencies and further develop its multi-sourcing strategy to better serve its customers. Despite the current difficulties, management remains optimistic about the potential for recovery as market conditions stabilize and consumer demand rebounds.