Lakeland Industries Reports 44.5% Increase in Q3 Net Sales, Net Income Declines

Lakeland Industries, Inc. reported significant financial results for the third quarter and nine months ended October 31, 2024, reflecting a notable increase in net sales and a shift in profitability compared to the previous fiscal period. For the three months ended October 31, 2024, net sales reached $45.8 million, a 44.5% increase from $31.7 million in the same period last year. The nine-month figures also showed growth, with sales rising to $120.6 million from $93.4 million, marking a 29.1% increase. However, net income for the quarter fell to $86,000, down from $2.6 million in the prior year, while net income for the nine months decreased to $363,000 from $6.4 million.

The company's financial performance was impacted by several strategic acquisitions, including the fire and rescue business of LHD Group, Jolly Scarpe, and Pacific Helmets. These acquisitions contributed significantly to the increase in sales, particularly in the fire services product line, which saw a $21.8 million increase due to the integration of these new businesses. However, the acquisitions also led to higher operating expenses, which rose by 83.5% to $17.8 million for the quarter, primarily due to transaction costs, restructuring expenses, and increased selling costs.

Operationally, Lakeland Industries reported a decrease in gross profit margins, with gross profit for the quarter at $18.6 million, or 40.6% of net sales, down from 42.2% in the previous year. This decline was attributed to lower margins from the newly acquired companies and increased freight costs. The company’s total assets increased to $201.2 million as of October 31, 2024, up from $153.7 million at the beginning of the fiscal year, reflecting the impact of the acquisitions.

Lakeland Industries continues to expand its global footprint, with sales to international customers amounting to $30.4 million for the quarter, compared to $16.6 million in the prior year. The company operates manufacturing facilities in multiple countries, enhancing its supply chain resilience. As of October 31, 2024, the company had a workforce of 111 employees from the LHD acquisition and 150 from Jolly, contributing to a total employee count that supports its operational capabilities.

Looking ahead, Lakeland Industries anticipates that its current cash reserves, along with borrowing capacity and expected sales growth, will be sufficient to meet its operational and investment needs for at least the next twelve months. The company remains focused on integrating its recent acquisitions and optimizing its operations to improve profitability while navigating the challenges posed by market conditions and increased operational costs.