Tennant Company Reports 6.8% Decline in Net Sales for Q1 2025

Tennant Company reported a decline in financial performance for the first quarter of 2025, with net sales totaling $290.0 million, a decrease of 6.8% compared to $311.0 million in the same period of 2024. The decline was attributed to a 5.0% organic sales drop, primarily due to volume declines across all geographies, particularly in North America, which faced a significant backlog reduction benefit in the prior year. Additionally, foreign currency exchange negatively impacted sales by approximately 2.1%. The company's gross profit also fell to $120.0 million, resulting in a gross profit margin of 41.4%, down from 44.2% in the previous year.

Operating income for the quarter was reported at $19.6 million, significantly lower than the $37.5 million recorded in the first quarter of 2024. This decline was accompanied by an increase in selling and administrative expenses, which rose to $90.7 million, representing 31.3% of net sales, compared to 28.9% in the prior year. Research and development expenses remained relatively stable at $9.7 million. The net income for the quarter was $13.1 million, or $0.69 per diluted share, down from $28.4 million, or $1.49 per diluted share, in the same quarter last year.

In terms of strategic developments, Tennant Company completed the acquisition of M&F Management and Financing GmbH in February 2024, which is expected to enhance its growth in the Europe, Middle East, and Africa (EMEA) region. The acquisition provides Tennant with a direct channel into several countries, including Romania and Hungary, and is anticipated to contribute to future sales growth. The company continues to focus on operational efficiencies and cost management strategies in response to ongoing geopolitical tensions and economic uncertainties.

Operationally, Tennant's customer base and geographic reach remain significant, with net sales in the Americas declining by 8.5% to $197.3 million, while EMEA sales decreased by 1.0% to $76.0 million. The Asia Pacific region saw a more substantial decline of 10.2%, with sales falling to $16.7 million. The company reported a total of 18,653,506 shares of common stock outstanding as of April 25, 2025, reflecting ongoing share repurchase activities.

Looking ahead, Tennant Company acknowledges the challenges posed by a slowing global economy, rising inflation, and geopolitical uncertainties. The company is committed to navigating these conditions while focusing on long-term growth and operational stability. Management remains vigilant in monitoring market trends and adjusting strategies to mitigate potential risks, including the impact of tariffs and foreign currency fluctuations on its operations.