Myers Industries lifts sales 8.1% to $171.340 million in third quarter, but margins decline
Key Facts
Myers Industries reported results on October 29 for the third quarter ended September 30, 2026, with net sales of $171.340 million, up 8.1% year over year. Revenue growth came with lower profitability, as operating income fell 11.2% to $14.839 million. Gross margin also declined to 27.3% from 31.1% a year earlier, down 380 basis points. Against expectations, revenue topped analysts’ estimate of $163.8 million, while adjusted earnings per share came in below the estimate of $0.45, at $0.32. The company held an earnings review call on October 29 at 10:00 a.m. Eastern time, with CEO Aaron Schapper and CFO Samantha Rutty.
The company said sales rose 10.4% excluding the impact of exiting low-margin products and closing two rotational molding facilities. The exit involved products worth about $3 million, according to the results statement. Management attributed the declines in gross and operating profit to higher resin costs, unfavorable product mix and unplanned maintenance work. It said higher volumes and pricing actions offset some of those pressures. The gap between sales growth and the lower margin shows that higher revenue did not translate into higher gross profitability in the quarter.
Performance varied across the company’s segments: infrastructure revenue rose 38% to $40.810 million, while food and beverage revenue increased 12% to $19.298 million. Management said on the earnings call that strong demand for composite mats and turf protection products supported the infrastructure segment. It added that seed boxes and intermediate bulk containers helped drive food and beverage growth. By contrast, industrial, automotive and consumer revenue remained roughly stable during the quarter. The divergence puts growth in two segments against stability in the others, while the company later lowered its full-year outlook for automotive from flat to a decline.
Diluted earnings per share from continuing operations fell to $0.13 from $0.17 in the year-earlier quarter, and income from continuing operations declined to $4.711 million from $6.290 million. The company’s adjusted measure showed a slightly different trend: adjusted diluted earnings per share from continuing operations rose 3.2% to $0.32 from $0.31. At the same time, adjusted EBITDA margin fell to 15.5% from 18.3%. These measures show a divergence between earnings under the accounting measure and the adjusted result, while margin pressure remained clear in both presentations.
In the second quarter, the company had reported year-over-year revenue growth of 9.8%, an operating income margin of 17.4% and an adjusted EBITDA margin of 21.8%. Those figures provide a recent comparison with the third-quarter margin declines, while revenue continued to grow. In August, Myers completed the sale of its North American Myers Tire Supply business to Lion Equity Partners for an agreed $30 million, subject to customary post-closing adjustments. The company said the transaction supports its shift toward focusing on its core businesses and growth platforms. MYE shares closed at $32.20 on October 28, before results were announced the next day.
Total liquidity was $254.7 million at quarter-end, including $201.2 million available under the revolving credit facility and $53.5 million in cash. Cash flow from operations was $17.4 million, while free cash flow was $11.5 million. The company reduced net debt, as defined in its credit agreement, by $28.5 million. Net leverage also improved to 1.86 times, compared with 1.94 times in the second quarter. These figures provide financial context for the results, with lower profitability accompanied by debt reduction and improved leverage during the period.
Management forecast significant sequential margin improvement in the fourth quarter, citing pricing actions and stable resin prices, and said end-market prospects were favorable. Its statement said: "We expect significant sequential margin improvement in the fourth quarter, and our end-market outlook remains favorable." The company’s 2026 outlook points to strong growth in infrastructure and food and beverage, and moderate growth in the industrial and consumer segments. In automotive, the company expects a decline, after previously forecasting stability. That puts the expected fourth-quarter margin improvement alongside differing demand trajectories across the company’s segments.