Compass Diversified (NYSE:CODI) Announces Quarterly Earnings Results

Key Points

• Earnings miss: Compass Diversified reported Q1 EPS of ($0.62) versus a consensus ($0.06), missing by $0.56, and revenue of $426.9M compared with estimates of $437.8M.
• Sterno sale and deleveraging: The company closed the sale of Sterno’s food service business and used proceeds to repay over $280M of senior secured term debt, cutting total leverage to ~5x and senior secured net leverage below 1x.
• Outlook and operational momentum: Management reiterated 2026 subsidiary-adjusted EBITDA guidance of $320–$365M, is prioritizing deleveraging (near-term <4x, long-term 3–3.5x) with buybacks possible once leverage improves, and reported Q1 subsidiary-adjusted EBITDA of $83.9M (+6.3% YoY) driven by strong consumer-brand growth (Honey Pot and Arnold’s).

Compass Diversified (NYSE:CODI - Get Free Report) announced its quarterly earnings data on Wednesday. The financial services provider reported ($0.62) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.06) by ($0.56), FiscalAI reports. The business had revenue of $426.86 million for the quarter, compared to the consensus estimate of $437.75 million.

Here are the key takeaways from Compass Diversified's conference call:

• Closed sale of Sterno's food service business, used proceeds to repay more than $280 million of senior secured term loan debt, reducing total leverage to ~5x and senior secured net leverage below 1x while avoiding upcoming milestone fees.
• Q1 subsidiary-adjusted EBITDA was $83.9 million (+6.3% YoY) with consumer EBITDA up 11.6%; The Honey Pot delivered ~25% revenue growth and >40% EBITDA growth, and Arnold's EBITDA nearly doubled.
• Updated 2026 outlook: subsidiary-adjusted EBITDA of $320–$365 million (consumer $225–$260M; industrial $95–$105M), which management says is at or above prior expectations and reflects the Sterno divestiture.
• Management retained Rimports after the Sterno sale and expects stranded costs plus a pending customer renegotiation to weigh on 2026 results, with improvement targeted for 2027.
• Company is pursuing an MSA review to better align incentives, is prioritizing deleveraging (near-term goal: <4x; long-term target: 3–3.5x) and may consider share buybacks once leverage improves, supported by $23.9M of Q1 operating cash flow, $65M cash and near-full revolver availability.

Compass Diversified Price Performance

Shares of NYSE:CODI traded up $0.01 on Wednesday, reaching $11.64. 527,436 shares of the company were exchanged, compared to its average volume of 984,575. The company has a current ratio of 2.42, a quick ratio of 1.26 and a debt-to-equity ratio of 19.20. Compass Diversified has a 1-year low of $4.58 and a 1-year high of $17.46. The firm has a market cap of $875.42 million, a price-to-earnings ratio of -3.00 and a beta of 1.29. The company has a 50-day moving average of $8.58 and a 200-day moving average of $6.95.

Wall Street Analyst Weigh In

Several equities analysts have issued reports on the stock. Zacks Research raised shares of Compass Diversified from a "strong sell" rating to a "hold" rating in a research note on Monday, March 16th. CJS Securities raised shares of Compass Diversified to an "outperform" rating in a research note on Tuesday, January 27th. Raymond James Financial assumed coverage on shares of Compass Diversified in a research note on Wednesday, March 11th. They issued a "hold" rating on the stock. Compass Point set a $15.00 price objective on shares of Compass Diversified in a research note on Tuesday, January 27th. Finally, Wall Street Zen raised shares of Compass Diversified from a "sell" rating to a "hold" rating in a research note on Saturday, March 7th. One equities research analyst has rated the stock with a Buy rating, four have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the company currently has a consensus rating of "Hold" and a consensus price target of $12.75.

Insider Buying and Selling at Compass Diversified

In related news, insider Stephen Keller purchased 30,000 shares of the stock in a transaction dated Monday, April 6th. The shares were acquired at an average cost of $8.61 per share, with a total value of $258,300.00. Following the purchase, the insider directly owned 20,000 shares in the company, valued at $172,200. This trade represents a -300.00% increase in their position. The acquisition was disclosed in a legal filing with the SEC, which is available through the SEC website. 1.60% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Compass Diversified

Large investors have recently added to or reduced their stakes in the business. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. lifted its holdings in Compass Diversified by 4.6% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 39,635 shares of the financial services provider's stock valued at $740,000 after purchasing an additional 1,728 shares in the last quarter. Sei Investments Co. lifted its holdings in shares of Compass Diversified by 1.8% during the 3rd quarter. Sei Investments Co. now owns 115,570 shares of the financial services provider's stock worth $765,000 after acquiring an additional 2,022 shares during the period. Brown Advisory Inc. lifted its holdings in shares of Compass Diversified by 3.9% during the 2nd quarter. Brown Advisory Inc. now owns 80,734 shares of the financial services provider's stock worth $507,000 after acquiring an additional 3,000 shares during the period. Prudential Financial Inc. lifted its holdings in shares of Compass Diversified by 13.0% during the 2nd quarter. Prudential Financial Inc. now owns 30,325 shares of the financial services provider's stock worth $190,000 after acquiring an additional 3,490 shares during the period. Finally, Nuveen LLC lifted its holdings in shares of Compass Diversified by 1.8% during the 4th quarter. Nuveen LLC now owns 212,649 shares of the financial services provider's stock worth $1,021,000 after acquiring an additional 3,767 shares during the period. 72.73% of the stock is owned by institutional investors and hedge funds.

Compass Diversified Company Profile

Compass Diversified Holdings NYSE: CODI is a publicly traded private equity company headquartered in Bethesda, Maryland. The firm specializes in acquiring and managing middle-market businesses across a variety of industries, with a focus on driving operational performance and sustainable growth. As an externally managed entity, Compass Diversified leverages a disciplined investment approach to build a portfolio of market-leading companies that benefit from strategic oversight, capital support and shared best practices.

Compass Diversified's investment activities span five core sectors: branded consumer, consumer services, differentiated industrial products, value-added distribution and business services.

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