Virco Mfg. 2026 Q3 Earnings Sharp Net Loss Amid Revenue Decline

Virco Mfg. (VIRC) reported a net loss of $0.08 per share in Q3 2026, missing estimates by $0.55 and marking a stark reversal from $0.52 per share in the prior year. The company’s revenue fell 42.3% year-over-year, and management noted no specific financial guidance but anticipates stabilization of demand over the next two to three years.

Revenue

Total revenue for the quarter was $47.64 million, driven by a 42.3% decline compared to $82.62 million in 2025 Q3. The drop reflects reduced demand in the school furniture sector, exacerbated by the expiration of ESSER funds and cautious school administrators. Net sales and total revenue both aligned at $47.64 million, with no material variance between the two figures.

Earnings/Net Income

Virco swung to a net loss of $1.32 million in Q3 2026, a 115.8% deterioration from $8.40 million net income in 2025 Q3. The EPS plunge from $0.52 to -$0.08 highlights the severity of the downturn. The significant EPS decline underscores the company’s challenging quarter, reflecting a sharp deterioration in profitability.

Post-Earnings Price Action Review

The strategy of buying Virco shares after its revenue increased quarter-over-quarter and holding for 30 days yielded a CAGR of 20.26%, underperforming the benchmark by 1.48 percentage points. While the approach exhibited minimal volatility (maximum drawdown of 0%) and a Sharpe ratio of 0.35, its modest returns suggest limited appeal for risk-seeking investors.

CEO Commentary

Robert Virtue, CEO, attributed the decline to cyclical factors, including the expiration of ESSER funds and deferred bond-funded projects. He emphasized the company’s focus on preserving balance sheet strength and leveraging vertical integration to navigate market normalization.

Guidance

Management expects demand to stabilize at pre-pandemic levels over two to three years but did not provide specific revenue or margin targets. The Board declared a $0.025 quarterly dividend, though future payments remain subject to board discretion and lending covenants.

Additional News

Recent developments include insider purchases: CEO Robert Virtue and EVP Douglas Virtue acquired shares totaling $130,381 and $95,581, respectively, signaling confidence in the stock. The Board also authorized a $0.025 dividend, maintaining its payout despite the recent net loss. Additionally, Virco’s strategic focus on adjacent public and private markets highlights its ambition to diversify beyond its core education sector.