Strattec Security (STRT) Q3 2026 earnings summary

Executive summary

• Net sales for Q3 FY26 were $137.6 million, down 4.5% year-over-year due to lower OEM production and EV program cancellations, but gross margin improved to 16.5% from 16.0% on cost reductions and productivity gains.

• Net income attributable to shareholders was $3.2 million ($0.78 per diluted share), down 40% year-over-year; adjusted net income was $3.7 million ($0.90 per share).

• Generated $11.4 million in operating cash flow and ended the quarter with $107 million in cash, supporting ongoing investments and flexibility.

• Restructuring actions yielded $1.7 million in quarterly savings, with an additional $800,000 in annualized savings expected from Mexico operations starting Q4.

• Transformation efforts and cost structure improvements remain a strategic focus.

Financial highlights

• Q3 FY26 net sales were $137.6 million, down 4.5% year-over-year; gross profit was $22.7 million, with gross margin up 50 bps to 16.5%.

• Net income attributable to shareholders was $3.2 million (down 40% YoY); adjusted EBITDA was $10.1 million (7.3% margin), down from $12.9 million (8.9%).

• Year-to-date net sales increased 4% to $427.6 million, with net income up 60% to $16.7 million and gross margin up 240 bps to 16.8%.

• Cash from operations in Q3 FY26 was $11.4 million; free cash flow was $8.8 million.

• Cash and cash equivalents at quarter-end were $107 million.

Outlook and guidance

• Q4 FY26 revenue expected to decline 3%-4% year-over-year, reflecting similar dynamics as Q3.

• Targeting gross margin of 18%-20% over the next few years, assuming stable FX rates.

• SAE expenses expected to run at 10%-11% of revenue, excluding unusual items.

• Focused on cost improvements, modernization, and positioning for future customer awards.

• Normalized cash generation run rate projected at ~$10 million per quarter.