Brady 2025 Q3 Earnings Strong Performance as Net Income Rises 2.7%

Brady (BRC) reported its fiscal 2025 Q3 earnings on May 16th, 2025. The identification and security products maker posted revenue of $382.6 million, marking an 11.4% increase year-over-year. On a per-share basis, Brady’s net income was reported at $1.09, up from $1.06 per share in the prior year. Brady's results met expectations with a robust performance driven by organic growth and strategic acquisitions. Adjusted EPS guidance for the fiscal year ending July 31, 2025, was tightened to $4.48 to $4.63 per share, reflecting a slight upward adjustment despite persistent European challenges.

Revenue
Sales for the quarter ended April 30, 2025, rose 11.4% to $382.6 million from $343.4 million the previous year. The Americas and Asia regions saw a 12.9% increase, bolstered by 5.4% organic growth and 8.6% from acquisitions, despite a 1.1% currency impact. Europe and Australia posted an 8.7% sales increase, fueled by 14.2% from acquisitions, offset by a 5.4% organic decline and slight currency impact.

Earnings/Net Income
Brady's EPS rose 3.8% to $1.10 in 2025 Q3 from $1.06 in 2024 Q3, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $52.26 million in 2025 Q3, marking 2.7% growth from $50.89 million in 2024 Q3. Adjusted EPS reflects solid underlying business performance.

Price Action
The stock price of Brady has edged up 2.35% during the latest trading day, has climbed 4.01% during the most recent full trading week, and has jumped 11.56% month-to-date.

Post-Earnings Price Action Review
The post-earnings strategy of buying BRC when revenues beat expectations and holding for 30 days yielded a 34.61% return. However, it significantly underperformed the benchmark, with a -52.36% excess loss. The Sharpe ratio of 0.23 indicates poor risk-adjusted returns, underscoring the strategy's high volatility and maximum drawdown of -36.60%. These results highlight the inherent challenges and risks associated with this particular investment approach, despite the initial positive revenue performance.

CEO Commentary
Russell Shaller, President and CEO, highlighted Brady's record high adjusted earnings per share, driven by a 1.6% organic sales growth and a 10.5% increase from acquisitions. He noted strong performances in the Americas and Asia with 5.4% organic growth, while Europe faced challenges, resulting in a 5.4% decline in organic sales. Shaller emphasized ongoing investments in R&D and expressed optimism about future growth following strategic restructuring actions in Europe to enhance efficiency.

Guidance
Brady Corporation expects adjusted diluted EPS in the range of $4.48 to $4.63 for the fiscal year ending July 31, 2025, tightening from a previous range of $4.45 to $4.70. The company anticipates organic sales growth in the low-single-digit percentages, with capital expenditures around $25 million and an income tax rate of approximately 20%. Additionally, incremental tariff expenses for the fourth quarter are projected to range between $3 million to $5 million, net of mitigating actions.

Additional News
Brady Corporation has recently declared a regular dividend for its shareholders, offering $0.24 per share on Class A Common Stock, payable on July 31, 2025, to shareholders of record as of July 10, 2025. The company continued its shareholder returns strategy by repurchasing 476,000 shares for $33.2 million and issuing dividends amounting to $11.3 million during the quarter. These actions underscore Brady's commitment to enhancing shareholder value amid global economic uncertainties. Brady maintains a robust financial position, allowing strategic investments in organic growth and acquisitions.