BOCA RATON, FLORIDA — July 15, 2026 — Q.E.P. CO., INC. (OTCQX: QEPC) (the “Company” or “QEP”) today reported financial results for its first quarter ended May 31, 2026.
Net sales for the quarter ended May 31, 2026 were $61.0 million, down $0.5 million or 0.9% from $61.5 million for the first quarter of fiscal 2026. The slight decline in net sales was primarily due to lower sales in the Company’s non-core powder business. Despite continued weakness in home improvement spending amid elevated interest rates, inflationary pressures, and broader macroeconomic and geopolitical uncertainties, retail channel sales remained flat and distribution channel sales increased during the current period.
Gross profit for the first quarter of fiscal 2027 was $21.8 million, compared to $22.7 million in the prior-year period, a decrease of $0.9 million or 4.1%. As a percentage of net sales, gross margin was 35.7% in the first quarter of fiscal 2027, compared to 36.9% in the first quarter of fiscal 2026. Gross margin during the first quarter of fiscal 2027 reflects higher tariff costs and ongoing inflationary pressures. By comparison, the prior-year period benefited from inventory purchased before the implementation of tariffs.
Operating expenses for the first quarter of fiscal 2027 were $16.5 million, or 27.0% of net sales, compared to $16.9 million, or 27.4% of net sales for the first quarter of fiscal 2026. Operating expenses for the first quarter of fiscal 2027 reflect higher outbound freight costs, driven by increased fuel charges, together with continued investment in sales and marketing infrastructure. Other income during the quarter included approximately $1.0 million of cash refunds received from U.S. Customs and Border Protection related to tariffs previously paid under the International Emergency Economic Powers Act ("IEEPA").
Operating income for the first quarter of fiscal 2027 was $5.3 million, compared to $5.8 million for the comparable period in fiscal 2026.
Interest income, net, was $0.2 million for the first quarter of both fiscal 2027 and fiscal 2026.
The provision for income taxes as a percentage of income before taxes was 26% for the first quarter of fiscal 2027, unchanged from the prior-year period.
Net income for the first quarter of fiscal 2027 was $4.0 million, or $1.33 per diluted share, compared to $4.4 million, or $1.36 per diluted share, for the first quarter of fiscal 2026.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of fiscal 2027 was $5.8 million, or 9.4% of net sales, compared to $6.1 million, or 10.0% of net sales, for the first quarter of fiscal 2026. A reconciliation of adjusted EBITDA, a non-GAAP financial measure, to net income from continuing operations is included in this press release.
