AstroNova 2026 Q1 Earnings Misses Targets as Net Income Declines 131.8%

AstroNova (ALOT) reported its fiscal 2026 Q1 earnings on June 6, 2025. The company’s financial performance revealed a swing to a loss, with a net loss of $376,000 compared to a net income of $1.18 million in the same quarter last year. This significant decline in net income was below expectations. Despite the earnings setback, AstroNova reaffirmed its full-year guidance, projecting revenue between $160 million and $165 million, which aligns with prior forecasts, and an adjusted EBITDA margin of 8.5% to 9.5%.

Revenue

AstroNova's revenue for the first quarter of fiscal 2026 rose by 14.4% to $37.71 million compared to the same period in the previous year. This growth was supported by various segments, with hardware generating $11.29 million, supplies contributing $21.08 million, and the service and other segment adding $5.33 million. The overall revenue increase reflects the company's efforts in strengthening its market position across its business segments.

Earnings/Net Income

In the first quarter of fiscal 2026, AstroNova experienced a downturn, moving from an earnings per share of $0.16 in fiscal 2025 Q1 to a loss of $0.05 per share. The net income shift from $1.18 million to a net loss of $376,000 underscores a challenging quarter for the company, with results indicating a negative financial performance.

Price Action

The stock price of AstroNova experienced a slight decline of 2.52% on the most recent trading day. Over the past week, the stock edged up by 0.11%, and it has seen a 7.04% increase month-to-date. This mixed price action indicates market volatility in response to recent earnings announcements.

Post-Earnings Price Action Review

The strategy of purchasing AstroNova (ALOT) shares following a quarterly revenue drop on earnings release day and holding them for 30 days has not yielded favorable results. A backtest revealed a return of -33.38%, which significantly underperformed the benchmark return of 45.83%. The strategy's Sharpe ratio was -0.30, indicating insufficient risk-adjusted returns, and it experienced a maximum drawdown of -58.31%, pointing to high risk. With a compound annual growth rate (CAGR) of -12.74% and volatility at 42.11%, the approach faced substantial challenges, making it unsuitable for investors seeking positive returns.

CEO Commentary

Gregory A. Woods, AstroNova's President, CEO, and Director, highlighted the company's strategic focus on long-term revenue growth and profitability improvement. AstroNova is transitioning to high-performance ToughWriter printers, simplifying its product portfolio and boosting aftermarket sales. The company has introduced new product identification solutions to penetrate new markets and is undergoing restructuring to enhance accountability. Woods expressed optimism, viewing the quarter as a positive turning point and showing confidence in delivering long-term shareholder value.

Guidance

AstroNova reiterated its full-year guidance, projecting revenue between $160 million and $165 million, reflecting a 7% year-over-year increase at the midpoint. The company expects the adjusted EBITDA margin to range from 8.5% to 9.5%, marking an 80 basis point expansion at the midpoint. The CEO emphasized the commitment to completing the $3 million cost reduction program by the second quarter and highlighted opportunities for scaling into new high-margin markets.

Additional News

In recent non-earnings related news, AstroNova has been focusing on its restructuring plan, expected to yield $3 million in annual savings. The plan involves reducing the global workforce by approximately 10%, particularly in the Product Identification segment, and streamlining MTEX operations in Portugal. Additionally, AstroNova is enhancing its product lineup by phasing out low-volume models and prioritizing high-margin products, leveraging MTEX's print engine technology to offer next-generation solutions. These strategic moves aim to boost profitability and competitive positioning, with significant organizational changes to optimize leadership roles and reporting structures.