How did Ennis manage to reduce expenses while increasing profits in Q3 2025?

Ennis Inc. managed to reduce expenses while increasing profits in Q3 2025 through a combination of strategic cost management and operational improvements:

1. Cost Management: Ennis effectively reduced selling, general, and administrative costs by $1.1 million compared to the same quarter last year. This reduction in costs, despite a decrease in revenue, contributed to the improvement in net earnings.
2. Gross Profit Margin Improvement: The company's gross profit margin improved to 29.3% from 29.2% in the same quarter last year. This improvement reflects effective cost management strategies and operational efficiencies.
3. Special Dividend: Ennis paid a special dividend of $2.50 per share in November 2024, which helped to return value to shareholders and could be seen as a strategic move to manage costs by reallocating resources.
4. Strategic Acquisitions: Ennis' strategic acquisition in June 2024 contributed $3.3 million in revenues and $0.02 in diluted EPS for the quarter. This acquisition not only increased revenue but also diversified the company's product offerings and customer base, potentially leading to better cost management and profitability.
5. Net Earnings Increase: Despite a decline in revenue, Ennis saw an increase in net earnings, rising from $9.9 million in the previous year’s quarter to $10.2 million. This indicates that the company was able to manage its expenses more effectively than its revenue, leading to improved profitability.

In summary, Ennis managed to reduce expenses while increasing profits in Q3 2025 by improving gross profit margins, reducing selling and administrative costs, paying a special dividend, making strategic acquisitions, and increasing net earnings. These measures collectively helped the company to enhance its financial performance despite facing challenges in revenue growth.