Lakeland Industries (LAKE) investor relations material

Executive summary

• Net sales for Q2 FY27 were $50.1 million, down 4.5% year-over-year but up 6% sequentially, with Fire segment revenue up 12% sequentially and 2% year-over-year, representing 52% of net sales.

• Adjusted EBITDA excluding FX more than doubled sequentially to $2.7 million (5.4% margin), though down from $5.1 million a year ago.

• Gross margin improved to 37.0% from 35.9% a year ago and 31.4% in Q1; adjusted gross margin reached 37.7%.

• Operating cash flow for the first half was $5.4 million, a $15.1 million year-over-year improvement.

• Net loss was $4.9 million (or $0.50 per share) versus net income of $0.8 million a year ago, impacted by a $3.2 million non-cash goodwill impairment.

Financial highlights

• Revenue for Q2 FY27 was $50.1 million, compared to $52.5 million in Q2 FY26.

• Gross profit was $18.5 million, down 1.5% year-over-year, but gross margin increased to 37.0% due to tariff refunds and favorable Fire mix.

• Adjusted operating expenses were $16.2 million, up from $14.6 million in Q2 FY26.

• Inventory ended at $74.9 million, down $2.8 million sequentially and $15.3 million year-over-year.

• Cash and cash equivalents were $17.9 million as of July 31, 2026; total debt declined to $28.7 million.

Outlook and guidance

• Sequential margin improvement is expected to continue in Q3 and Q4, with higher mix and volume in turnout gear and Fire Services.

• Some Fire order timing is expected to shift into Q4; portfolio repositioning and capital reallocation may have near-term impacts but are expected to strengthen the business.

• Third quarter is expected to be materially better year-over-year, with continued focus on positive operating cash flow and sustainable margin/EBITDA improvement.

• Management expects current cash, borrowing capacity, and cash from operations to be sufficient for at least the next twelve months.

• Ongoing trade policy uncertainty, new tariffs, and supply chain disruptions are expected to continue impacting margins and operating results.