FGI Industries Q2 2026 Earnings Report

FGI Industries EPS Results

• Actual EPS: $0.60
• Consensus EPS: $0.10
• Beat/Miss: Beat by +$0.50
• One Year Ago EPS: N/A

FGI Industries Revenue Results

• Actual Revenue: $31.89 million
• Expected Revenue: $33.85 million
• Beat/Miss: Missed by -$1.97 million
• YoY Revenue Growth: N/A

FGI Industries Announcement Details

• Quarter: Q2 2026
• Date: 8/12/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 13, 2026
• Conference Call Time: 9:00AM ET

FGI Industries (NASDAQ:FGI) supplies kitchen and bath products in the United States, Canada, Europe, and internationally. The company sells sanitaryware products, such as toilets, sinks, pedestals, and toilet seats; wood and wood-substitute furniture for bathrooms, including vanities, mirrors, laundry, medicine cabinets, and other storage systems; shower systems; and customer kitchen cabinetry and other accessory items under the Foremost, avenue, contrac, Jetcoat, rosenberg, and Covered Bridge Cabinetry brand names. It sells its products through home center retailers, online retailers, distributors, and independent dealers. The company was incorporated in 2021 and is headquartered in East Hanover, New Jersey. FGI Industries Ltd. is a subsidiary of Foremost Groups Ltd.

FGI Industries Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Second-quarter revenue increased 2.9% year over year to $31.9 million, led by growth in sanitaryware and shower systems, while new products and customer programs supported market-share gains.
• Positive Sentiment: Gross margin expanded to 33.4% from 28.1%, and GAAP operating results improved to a $1.4 million gain from an $0.8 million loss; net income was $1.3 million versus a $1.2 million loss in the prior-year quarter.
• Negative Sentiment: Management described the renovation-and-remodeling market as soft and said it is likely to perform toward the lower end of 2026 guidance, with Canadian retail especially pressured by competition and pricing.
• Neutral Sentiment: 2026 guidance remains unchanged at $134 million–$141 million of revenue and $0.7 million–$2.5 million of adjusted operating income, but excludes trade-related recoveries; management views most recoveries as one-time while tariff and duty costs are expected to continue.
• Positive Sentiment: FGI expects renewed growth from Covered Bridge Cabinetry in the second half and continued shower-systems momentum, aided by new products, customer programs, and a Houston-area distribution center planned to open by year-end.

Presentation

[Operator]

Good day, and welcome to the FGI Industries Inc. second quarter 2026 results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Jae Chung, Chief Financial Officer. Please go ahead.

[Jae Chung, CFO at FGI Industries]

Thank you. Welcome to FGI Industries' 2026 second quarter results conference call. Leading the call today, our Chief Executive Officer, David Bruce, and Chief Financial Officer, Jae Chung. We issued a press release after the market closed yesterday detailing our recent operational and financial results. I would like to remind you that management's commentary and responses to questions on today's conference call may include forward-looking statements, which, by their nature, are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially. For a discussion of some of the factors that could cause actual results to differ, please refer to the Risk Factors section of our latest filings with the SEC, including our Form 10-K for the year ended December 31, 2025.

[Jae Chung, CFO at FGI Industries]

Additionally, please note that you can find reconciliations of historical non-GAAP financial measures in the press release issued yesterday and in the appendix of this presentation, which is available on the company's website. Today's call will begin with a performance review and strategic update from Dave Bruce, followed by a financial review from Jae Chung. At the conclusion of these prepared remarks, we will open the line for questions. With that, I'll turn the call over to Dave.

[Dave Bruce, Chief Executive Officer at FGI Industries]

Thank you, Jae. Good morning, everyone, and thank you for joining our call today. I am pleased to report another quarter of revenue growth and improved operating expense performance for FGI. Revenue increased 2.9% year-over-year in the second quarter, and we remain disciplined in managing our cost structure, delivering lower operating expenses while continuing to invest in our brands, products, and channels or our BPC growth strategy. These efforts continue to strengthen our market position and create new opportunities for long-term growth. Our strongest performance came from our sanitaryware and shower systems businesses, both of which delivered year-over-year revenue growth. Sanitaryware benefited from the normalization of customer purchasing activity following last year's tariff-related disruptions, along with contributions from recently launched customer programs. Our shower systems business also continued to gain traction as new products and expanded customer distribution contributed to growth.

[Dave Bruce, Chief Executive Officer at FGI Industries]

While market conditions remain mixed, particularly within our bath furniture and other product categories, we continue to manage the business with discipline and remain focused on opportunities where we see the strongest long-term potential. Looking ahead, we expect Covered Bridge Cabinetry to resume growth in the second half of the year. We also expect continued momentum in our shower systems business as recently introduced products and customer programs continue to expand, providing additional opportunities for growth through the remainder of 2026. Although the external environment continues to evolve, including ongoing trade and tariff developments, I am proud of how our team has remained focused on execution. Their ability to adapt to changing market conditions while continuing to serve our customers has positioned FGI well for the remainder of the year. With that, I will turn the call over to Jae for a more detailed review of our financial results.

[Jae Chung, CFO at FGI Industries]

Thank you, Dave, and good morning, everyone. I will begin by providing additional details on the quarter, followed by an update on our current liquidity and balance sheet. For the second quarter 2026, revenue totaled $31.9 million, an increase of 2.9% compared to the second quarter of 2025. Gross profit was $10.7 million in the quarter, an increase of 22.5% year-over-year. Our gross margin increased to 33.4% in the quarter compared to 28.1% the prior year, driven by trade-related recoveries in the quarter. Our operating expenses decreased to $9.3 million compared to $9.5 million in the prior year, due primarily to lower selling and distribution costs and optimizing our warehouse operations.

[Jae Chung, CFO at FGI Industries]

These efforts are part of our broader initiative to diversify our supply chain and reduce freight costs. We expect to begin operations at a new warehouse in Texas to support distribution across the Southern United States. GAAP operating gain was $1.4 million, improving from an operating loss of $0.8 million in the prior year period. The improvement in the operating loss was a result of trade-related recoveries, which were reflected in the cost of goods sold and a decrease in total operating expenses. GAAP net income attributable to shareholders was $1.3 million, compared to a loss of $1.2 million in the same period last year. Adjusted net income was $1.2 million, compared to a loss of $1.2 million in the same period last year. Moving to our balance sheet.

[Jae Chung, CFO at FGI Industries]

At the end of the second quarter, FGI had $7.9 million in total liquidity

[Jae Chung, CFO at FGI Industries]

Our 2026 guidance remains unchanged and does not include trade-related recoveries. Our revenue guidance is $134 million to $141 million. The adjusted operating income guidance is $0.7 million to $2.5 million. The adjusted net income guidance is a loss of $0.3 million to a gain of $1.1 million. Please note that the guidance for adjusted operating income excludes certain non-recurring items. Adjusted net income excludes certain non-recurring items and includes an adjustment for minority interest. That concludes our prepared remarks. Operator, we are now ready for the question and answer portion of our call.

[Operator]

The first question comes from Reuben Garner with The Benchmark Company. Please go ahead.

[Reuben Garner, Analyst at The Benchmark Company]

Thank you. Good morning, guys.

[Dave Bruce, Chief Executive Officer at FGI Industries]

Hey, good morning, Reuben.

[Jae Chung, CFO at FGI Industries]

Morning, Reuben.

[Reuben Garner, Analyst at The Benchmark Company]

You referenced tariffs a few times. I was wondering if you could offer some clarity on any refunds you may have received to date, what might be on the come, and then I guess the net effect for you guys. I know there's been a little part year and a half, but just kind of where it's all shaken out today.

[Jae Chung, CFO at FGI Industries]

Yeah. Hey, Reuben. We're in the process of finalizing our Q, and the specific information on the amount of the refund will be in the Q to be released tomorrow. As far as further recoveries specifically related to APA, we believe we've received all or the vast majority of it. You can see the actual numbers tomorrow. Dave, do you want to comment?

[Dave Bruce, Chief Executive Officer at FGI Industries]

Yeah, I think that we view any of these recoveries as really it's just a partial offset to the impact that we had to absorb going all the way back to last year. We still continue to pay various trade-related expenses, not only tariffs, but also other duties and VAT tax drawbacks that some of our suppliers are impacted by. We expect, quite frankly, some additional tariff levies to be impacted at the beginning of next year. So it's an ongoing, I'll call it an ongoing saga with the tariffs. It's not something that we anticipate is going to go away, and we continue to support our customers as we have recently and in the past. So we're looking at the recoveries as a one-time thing here, but the impact of tariffs are going to continue.

[Reuben Garner, Analyst at The Benchmark Company]

How about at your customer, what have you seen in terms of discounting relative to, I don't know, normal discounting this time of year? Has that been increased at all with the changes in the tariffs or inventory levels or anything else at the retail level?

[Dave Bruce, Chief Executive Officer at FGI Industries]

Yeah, I think discounting, I would call it more promotional opportunities. We've taken, I shouldn't say taken, but we've worked closely with some of our customers on promotional opportunities. We drove some larger promotions with our sanitaryware in the quarter. The market overall, as we've discussed before, continues to be relatively flat in the R&R space. Promoting products is becoming a viable way for us to drive continued growth and market share. I think that's what we see more than anything is opportunities to reach out to our customers and offer some discounting to try to drive incremental business.

[Reuben Garner, Analyst at The Benchmark Company]

Okay, and then last one for me. The products that you guys, the branded sort of FGI branded products that you've been trying to grow the last couple of years, what's kind of next on that front? Any big opportunities on the come in terms of expanding those kind of higher margin businesses for you?

[Dave Bruce, Chief Executive Officer at FGI Industries]

Yeah, I think that's a great question. We've become really successful and continue to be successful with our branded products, particularly in our shower systems business. That would be across our doors, spaces, and walls. I think in the call we mentioned, it was just a quick blurb, but we mentioned our new distribution center that we are going to open by the end of this year in Houston. We're entering that quite shortly. That is going to be another avenue for us to expand territories on our wholesale business with our contract brand. We're very excited about that. We've been working on that for a long time. So yeah, our BPC strategy, despite the fact that we also obviously are large supporters of our larger customers, proprietary and private label, we continue to expand our own brand presence strategically throughout the market.

[Reuben Garner, Analyst at The Benchmark Company]

Thanks for the detail, guys, and good luck.

[Dave Bruce, Chief Executive Officer at FGI Industries]

Great, thanks.

[Operator]

The next question comes from Greg Gibas with Northland Securities. Please go ahead.

[Greg Gibas, Analyst at Northland Securities]

Hey, thanks. Good morning, Dave and Jae. What I wanted to maybe just ask more basically on just kind of your visibility on back-half growth, given you reaffirmed guidance and what kind of gives you confidence in how the back half will trend, whether it's kind of your discussions with customers or just overall demand you're seeing in the market, if anything's changed maybe since your last provided guidance. Thanks.

[Jae Chung, CFO at FGI Industries]

Yeah, I think things have held where we had expected. The market, like I mentioned just on the previous call, it's relatively soft. There's still a cautionary tone in the market when it comes to building up inventory. Order placements have been relatively consistent and cadence on shipping. We didn't change guidance, so I would venture to say that we're probably based on the softer market, looking at maybe more lower ends on the guidance levels. We're also optimistic because we still are implementing some new programs to customers that will launch. Some of those were delayed, just due to various market issues, not anything in particular to do with the sales. We would anticipate, we've taken all that into account to understand would we have wanted to change the guide?

[Jae Chung, CFO at FGI Industries]

We want to keep the guide where it's at, but we would probably venture to say we're going to look towards more the lower side, just based on the cautionary tone right now in the marketplace and some of the pressures that exist.

[Greg Gibas, Analyst at Northland Securities]

Great. That's helpful. Maybe similarly, just if you could discuss kind of puts and takes of kind of the demand across your channels geographically, but also kind of customer type.

[Dave Bruce, Chief Executive Officer at FGI Industries]

Sure. Yeah, we've had a little more pressure in our Canadian sales. That's been the most pressured this year. Initially in the first part of the year, it was across both of our wholesale and retail. Wholesale is recovering slowly. Retail has been a little bit of a struggle. There's been a lot of competitive and pricing pressures up in the market, which we're addressing. In the U.S., it's been more of, like I said, sort of a cautionary flat market, other than where we're taking share on incremental gains on new programs. On our European business, very similar. They've been pretty strong and consistent. Order cadence has been good. We've been expanding into our wholesale trade in the European market. There hasn't been any outlying bigger wins outside of with the market pressure over there, obviously, that still exists.

[Dave Bruce, Chief Executive Officer at FGI Industries]

But we've been very proud of actually the progress we've been able to make and particularly taking share on that wholesale side, which has been very important over in Europe.

[Greg Gibas, Analyst at Northland Securities]

Okay, got it. Appreciate the color there.

[Operator]

This concludes our question and answer session. I would like to turn the conference back over to David Bruce for any closing remarks.

[Dave Bruce, Chief Executive Officer at FGI Industries]

Thank you for your time and interest today. We really appreciate your continued support of FGI. Stay well, and if we don't connect during the quarter, we look forward to speaking with you on our next call.

[Operator]

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Jae Chung, CFO
• Dave Bruce, Chief Executive Officer

Analysts

• Reuben Garner, Analyst at The Benchmark Company
• Greg Gibas, Analyst at Northland Securities