Virco Mfg. 2026 Q3 Earnings Sharp Earnings Drop Amid Revenue Decline

Virco Mfg. (VIRC) reported a significant earnings shortfall in Q3 2026, with a net loss of $1.32 million and a 115.4% drop in EPS. The company highlighted cyclical demand stabilization in school furniture markets but warned of ongoing challenges. Management emphasized balance sheet strength and cautious optimism for long-term recovery.

Revenue

Total revenue for the quarter amounted to $47.64 million, with net sales accounting for the entirety of this figure. This represents a 42.3% decline from $82.62 million in the prior-year period. The drop reflects a broader industry slowdown driven by the expiration of ESSER funds and cautious school administrators.

Earnings/Net Income

Virco Mfg. swung to a loss of $0.08 per share in Q3 2026, a 115.4% negative change from $0.52 per share in Q3 2025. The company reported a net loss of $1.32 million, a 115.8% deterioration from net income of $8.40 million a year earlier. The significant drop in earnings highlights the challenging market conditions affecting the company’s profitability.

Price Action

The stock price of Virco Mfg. surged 14.87% during the latest trading day but has declined 3.15% over the past week and 0.79% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Virco Mfg. (VIRC) shares after its revenue raised quarter-over-quarter on the financial report release date and holding for 30 days showed favorable performance over the past three years. While the initial 30-day holding period experienced a brief dip, the strategy recovered significantly, achieving a 24.77% return—outpacing the SPY ETF’s 14.16% return over the same period.

CEO Commentary

Robert Virtue, Chairman and CEO, noted that cyclical declines in school FF&E demand are stabilizing, with unshipped backlog nearing prior-year levels. He emphasized the company’s focus on preserving balance sheet strength to capitalize on future opportunities, leveraging domestic manufacturing and vertical integration. Virtue expressed optimism about a potential catch-up to pre-pandemic business velocity within two to three years.

Guidance

Virco expects demand to stabilize at pre-pandemic levels, with a potential market recovery over the next two to three years. The company declared a $0.025 per share dividend for Q4 2025, payable in January 2026, but emphasized future dividends remain subject to board discretion and lending agreements. Management did not provide specific revenue or profit targets, prioritizing strategic flexibility and liquidity.

Additional News

1. Dividend Declaration: Virco announced a $0.025 quarterly dividend, payable January 9, 2026, reflecting its commitment to shareholder returns despite current challenges.

2. Share Repurchase Program: The company authorized a $10 million share repurchase program in February 2025, signaling confidence in its stock’s value.

3. Balance Sheet Strengthening: With a current ratio of 3.98, Virco’s liquidity position has improved, supporting its strategy to navigate market uncertainties while maintaining operational resilience.

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