Ennis 2026 Q1 Earnings Misses Targets with Net Income Down 8.3%

Ennis Inc. (EBF) reported its fiscal 2026 Q1 earnings on June 30, 2025. The company's results missed expectations, reflecting a decline in key performance metrics. Despite a challenging market environment, Ennis maintained its strategy of focusing on profitability and strategic acquisitions. The leadership remains committed to returning value to shareholders, emphasizing the use of its strong cash position for future investments. However, specific quantitative targets were not explicitly outlined, indicating cautious optimism about sustaining margins and managing costs effectively.

Revenue
The total revenue of Ennis decreased by 5.7% to $97.20 million in 2026 Q1, down from $103.11 million in 2025 Q1.

Earnings/Net Income
Ennis's EPS declined 7.3% to $0.38 in 2026 Q1 from $0.41 in 2025 Q1. Meanwhile, the company's net income declined to $9.80 million in 2026 Q1, down 8.3% from $10.69 million reported in 2025 Q1. The EPS decline reflects a challenging financial quarter for the company.

Price Action
The stock price of Ennis has edged down 1.20% during the latest trading day, has dropped 4.58% during the most recent full trading week, and has edged down 2.26% month-to-date.

Post Earnings Price Action Review
The strategy of buying EBF when its revenues beat expectations and holding for 30 days resulted in poor performance. This approach yielded a return of -13.48%, significantly underperforming the benchmark return of 43.40%. The excess return stood at -56.88%, with a CAGR of -3.44%, highlighting its failure to capitalize on market gains. Moreover, the strategy faced a high maximum drawdown of -36.22%, indicating significant risk. The Sharpe ratio of -0.18 suggests that the risk taken did not provide satisfactory returns, illustrating the strategy's ineffectiveness in the current market conditions.

CEO Commentary
Keith Walters, Chairman, CEO, and President of Ennis Inc, expressed satisfaction with the company's performance in the first quarter, stating, "Our performance for the quarter met our expectations. Although there was a year-over-year decline in sales, our gross profit margin increased to 31.1% for the quarter compared to 30.0% for the same quarter last year and 29.5% for the fourth quarter. Our ability to maintain or improve our profit margins amidst decreased market demand highlights the success of our cost management and pricing discipline." He also mentioned the positive impact of recent acquisitions, emphasizing the company's strong financial position with $32.0 million in cash and no debt, which allows for future growth opportunities.

Guidance
Ennis Inc anticipates continued focus on profitability and strategic acquisitions, with the management highlighting potential for timely access to credit for larger opportunities. The company maintains a commitment to returning value to shareholders through dividends and aims to leverage its robust cash position for future investments. While specific quantitative targets were not explicitly outlined, the leadership is optimistic about sustaining margins and managing costs effectively in a challenging market environment.

Additional News
During the past few weeks, Ennis Inc. has seen significant changes, including the acquisition of Northeastern Envelope, located in Old Forge, PA. The acquisition aims to bolster Ennis's product offerings and expand its market reach. Additionally, in a notable corporate development, Michael Schaefer, a member of Ennis's Board of Directors and current chair of the Audit Committee, announced he would not be nominated for re-election. This decision marks a shift in the company's leadership dynamics. Furthermore, Ennis's commitment to shareholder value is evident through the repurchase of 260,560 shares of its common stock at an average price of $19.00 per share, demonstrating the company's ongoing focus on enhancing shareholder returns.