#United States #earnings report #McRae Industries #Mount Gilead #Fiscal 2026

McRae Industries Reports Q3 and Nine-Month Results for Fiscal 2026

On June 15, 2026, McRae Industries, Inc. (Pink Sheets: MCRAA and MCRAB) released its earnings report for the third quarter and the first nine months of fiscal 2026, revealing a decline in consolidated net revenues and earnings compared to the prior fiscal year.

Key Financial Figures

During the third quarter of fiscal 2026, McRae Industries reported consolidated net revenues of $27.4 million, down from $30.9 million in the same period last year. The net earnings for this quarter were $858,000, translating to $0.38 per diluted Class A common share, compared to $3.16 million and $1.40 per diluted Class A common share in Q3 of fiscal 2025.

For the first nine months of fiscal 2026, net revenues totaled $86.6 million, slightly lower than the $87.1 million reported for the same period in fiscal 2025. The total net earnings for these nine months amounted to $3.26 million, or $1.45 per diluted Class A common share, a significant drop from $6.05 million or $2.68 per share last year.

Sales Performance

The decline in revenue for Q3 fiscal 2026 was largely attributed to a downturn in sales from the Laredo brand, as western and lifestyle boot product sales peaked at $19.7 million, down from $20.2 million year-over-year. Additionally, the revenue from work boot products saw a drop from $8.7 million to $7.9 million.

The earlier year's revenues benefitted from $2.0 million in land sales conducted through the company’s affiliate American Mortgage Investment Company (AMIC), which did not recur this quarter.

Gross Profit Analysis

The gross profit for the third quarter of fiscal 2026 was approximately $6.9 million, compared to $9.8 million in the same quarter last year. As a percentage of net revenues, gross profit decreased from 31.7% to 25.2%. This decline was influenced by a $1.6 million impact from the previous land sale and tariff costs of approximately $0.8 million this quarter, for which the company is pursuing refunds.

Operating Expenses

Consolidated selling, general, and administrative expenses were about $6.1 million for the third quarter, showing a slight decrease from $6.3 million in the previous year. The reduction in costs primarily stemmed from lower commission fees, although this was partially offset by increased marketing expenditures.

Consequently, the consolidated operating profit for Q3 stood at $0.8 million, down from $3.5 million year-over-year.

Overview of the First Nine Months

For the first nine months of fiscal 2026, western and lifestyle product sales increased to $63.8 million from $61.6 million, mainly due to gains in the Dan Post and Dingo brands. However, work boot sales declined from $24.2 million to $23.3 million.

The gross profit for this period totaled $22.1 million, representing 25.6%, down from 29.0% in the previous year, a decline driven by the absence of land sales and $3.0 million in tariffs. Selling, general, and administrative expenses were $19.5 million, a minor increase from $19.2 million in the prior period.

The operating profit for the first nine months amounted to $2.6 million, which is significantly lower than the $6.1 million earned in the same timeframe last year.

Government Contract

In April 2026, McRae Industries secured a $15.4 million contract from the United States Government's DLA Troops Support for Airforce temperate weather boots, with deliveries expected to commence within 150 days from the award date.

Financial Health

The company's financial standing as of May 2, 2026, reflected cash and cash equivalents of $20.6 million, down from $31.6 million at the end of the previous fiscal year. Working capital decreased from $85.9 million to $72.5 million. McRae Industries currently has two lines of credit totaling $6.75 million, fully accessible as of the reporting date.

Conclusion

Overall, McRae Industries faces challenges as reflected in its recent earnings report, with significant year-over-year decreases in revenues and profits. However, the awarded government contract could provide a substantial boost to the company’s financial performance in the future.