Kewaunee Scientific 2026 Q2 Earnings Strong Revenue Growth, Earnings Decline Amid Strategic Shifts

Kewaunee Scientific (KEQU) reported mixed results for its fiscal 2026 Q2, marked by robust revenue growth but declining earnings. The company’s performance fell in line with expectations, with revenue surging 46.8% year-over-year to $70.1 million, driven by strong domestic and international sales. However, net income and EPS declined, reflecting margin pressures and operational challenges. Management provided cautious guidance, citing project delivery volatility but reaffirming confidence in long-term growth.

Revenue

Kewaunee Scientific’s total revenue surged to $70.1 million in Q2 2026, a 46.8% increase from $47.8 million in the prior-year period. Domestic sales accounted for $55.2 million, up 51.7%, while international sales rose 31.0% to $14.9 million. The domestic segment’s growth was fueled by the inclusion of Nu Aire, Inc., acquired in November 2024, which contributed significantly to the top-line expansion. International sales benefited from the delivery of large projects booked in prior periods, though the company noted ongoing challenges in maintaining consistent margins amid fluctuating project timelines.

Earnings/Net Income

Despite the revenue surge, Kewaunee Scientific’s net income declined to $2.54 million in Q2 2026, down 15.8% from $3.02 million in the prior-year quarter. Diluted EPS fell to $0.85 from $1.05, reflecting margin compression and higher operational costs. The company attributed the earnings decline to volatility in project delivery schedules and lower manufacturing volumes in its laboratory construction segment. While EBITDA improved to $5.8 million from $4.9 million, the net income drop underscores the challenges of scaling operations while maintaining profitability.

Post-Earnings Price Action Review

Following the earnings release, Kewaunee Scientific’s stock price experienced a downturn, reflecting investor concerns over earnings softness. The stock edged down 2.50% during the latest trading day, dropped 4.35% over the past week, and tumbled 9.23% month-to-date. The decline outpaced broader market trends, as the S&P 500 gained 3% over the same period. The weak price action highlights market skepticism about the company’s ability to sustain profitability amid strategic shifts and operational headwinds.

CEO Commentary

Thomas D. Hull III, President and CEO of Kewaunee Scientific, emphasized the company’s resilience despite the earnings decline. In the earnings call, he noted that the volatility in project delivery timelines, particularly in the construction market, impacted short-term results. However, he highlighted the strong performance of Nu Aire, which offset some of the legacy business challenges. Hull reiterated the company’s commitment to diversification through targeted acquisitions and operational efficiency, stating, “We remain confident in our ability to navigate near-term volatility while positioning for long-term growth.” He also underscored the importance of strategic investments in technology and processes to enhance scalability.

Guidance

For the remainder of fiscal 2026, Kewaunee Scientific expects continued volatility in project delivery timing but anticipates maintaining a strong order backlog. The company’s guidance aligns with its focus on long-term opportunities, including the expansion of its laboratory solutions portfolio. Management reiterated optimism for fiscal 2027, supported by robust quoting activity and a diversified product offering. While no specific revenue or EPS targets were provided, the company emphasized its confidence in leveraging its strengthened balance sheet and strategic acquisitions to drive future growth.

Additional News

Kewaunee Scientific recently completed the acquisition of Nu Aire, Inc., which has become a key contributor to its revenue growth. The company also announced the early repayment of Seller Notes, strengthening its balance sheet and positioning for further inorganic growth. Additionally, Kewaunee Scientific highlighted its progress in expanding its international footprint, with a focus on delivering large-scale projects in key markets. These strategic moves underscore the company’s commitment to diversification and long-term value creation.

Kewaunee Scientific’s Q2 results reflect a mix of growth and challenges, with strong revenue performance offset by earnings declines. The company’s strategic focus on acquisitions, operational efficiency, and international expansion positions it for long-term growth, though near-term volatility remains a concern. Investors will be watching for further clarity on margin improvement and the execution of its strategic initiatives.