Acme United Sales Jump 18% to $58 Million as Third-Quarter Profit Rises 80%
Key Facts
Acme United reported an 18% increase in third-quarter 2026 sales to $58.0 million, from $49.1 million in the year-earlier period, while net income rose 80% to $3.4 million. The company said in its filing that diluted earnings per share were $0.80, compared with $0.46 a year earlier, an increase of 74%. Excluding the impact of the My Medic acquisition, comparable sales grew 10% during the quarter. Shares closed at $65.78 on October 27, up from $63.58 in the previous session, according to EL7 data. The results came as the company combined sales growth with a contribution from tariff refunds, alongside costs to restructure its operations.
The company said quarterly sales were a record, with growth across all business units and international markets, while back-to-school sales were strong. The chief executive added that the integration of My Medic was progressing as planned and that the company was receiving commitments from retailers and distributors for its products for the following year. U.S. segment sales rose 20% year over year. In Europe, sales increased 5% in dollars and 7% in local currency, while Canadian sales rose 9% in dollars and 12% in local currency. The figures show growth across geographies, while comparable sales growth, excluding the acquisition, remained at 10%.
Gross margin was 45.3%, compared with 39.1% in the third quarter of 2025, but the company said tariff refunds added about 690 basis points to the margin. This was partly offset by the impact of costs to close the DMT sharpening facility, which reduced margin by about 310 basis points. The company said margin remained above its year-earlier level even after excluding the effects of the refund and closure, attributing this mainly to My Medic’s direct-to-consumer business. The company had received $6.0 million in refunds of tariffs imposed under the International Emergency Economic Powers Act, but recognized only $4.0 million as a reduction in the cost of goods sold during the quarter. The remaining $2.0 million was recorded as a liability due on September 30, while the company recorded $1.0 million in related variable compensation expenses tied to the refund.
On the cost side, cost of goods sold included $1.8 million related to closing the DMT sharpening facility and moving production of its products to lower-cost facilities in Asia. The company expects annual savings from the move to exceed $1 million in 2027. The chief executive said transportation costs and many raw materials were rising, and that the company was addressing this with new robotics in its plants, competitive sourcing and operational integration. The spending adds a burden in the current quarter alongside a plan aimed at reducing costs in the future. Meanwhile, net bank debt, after cash, rose to $29.7 million on September 30, 2026, from $23.1 million on the same date a year earlier.
For the nine months ended September 30, sales totaled $173.0 million, up 16% from $149.0 million in the same period of 2025. Net income for the period rose to $9.5 million from $8.3 million, an increase of 14%. The company also generated about $13.8 million in free cash flow during the 12 months ended September 30, 2026, including $6.0 million in tariff refunds. The company said My Medic’s earnings impact was limited in the third quarter and first nine months because of the seasonality of its business. My Medic has historically generated most of its profitability in the fourth quarter, making its year-end contribution dependent on the season in which its profits are concentrated.
The impact of tariffs follows disruption to the company’s retail programs in 2025, when customers canceled or postponed programs amid uncertainty over tariffs, according to its annual report. The company had purchased additional inventory at the end of 2024 in anticipation of tariff increases. The current quarter’s performance thus combines underlying sales growth and an accounting contribution from tariff refunds, with facility closure costs weighing on margin. The company also acknowledged that part of the refund had not yet reduced the cost of goods sold and remained recorded as a liability. The company forecast a seasonally strong fourth quarter for sales and earnings, saying the quarter typically accounts for the largest share of My Medic’s profitability.