Lakeland Industries reported a record first quarter (Q1 FY2026) with revenue of $46.7 million, up 29% year over year, driven by a 100% increase in Fire Services and meaningful contributions from the latest acquisitions. U.S. sales rose 42% to $22.5 million, aided by 15% organic growth, while Europe surged 102% to $12.1 million, underscoring accelerated cross-border demand for head-to-toe PPE solutions. However, gross margin compressed to 33.5% from 44.6% a year earlier, reflecting a shift in geographic mix toward lower-margin regions and the amortization impact of purchase accounting on acquired entities. Organic gross margin declined to 35.9% from 44.6% year-over-year, with continued margin pressure from higher manufacturing and freight costs and tariff mitigation inventory builds.
Adjusted EBITDA, excluding FX, was $0.6 million, down from $3.8 million in the prior-year period, as operating expenses rose $6.3 million largely due to inorganic growth, acquisition-related costs, and integration activity. The company posted a net loss of $3.9 million ($0.41 per diluted share) for the quarter, versus net income of $1.7 million a year ago. cash flow was negative from operations at $4.8 million, with capex of $1.2 million and free cash flow of approximately -$6.1 million. The balance sheet remains cash-rich on a nominal basis with $18.6 million in cash and equivalents and total debt of $40.2 million (net debt of $21.6 million), supported by a revolving line with roughly $20.2 million of unused capacity.
Looking ahead, management reaffirmed FY2026 guidance: revenue of $210â$220 million and adjusted EBITDA (ex FX) of $24â$29 million, underscoring expectations for sequential gross margin and EBITDA improvement as tariff-related inventory builds normalize and integration benefits from four acquisitions (Veridian, Eagle, Jolly, LHD, and LHC) materialize. The company is advancing price/flow-through discipline, cross-selling initiatives, and certificate approvals (NFPA 1970/71) to capture a broader head-to-toe PPE opportunity, while continuing ERP consolidation (SAP implementation) to unlock operating leverage. The near-term setup includes tariff mitigation strategies (e.g., cross-certification with Veridian, U.S.-manufacturing readiness, and Vietnam/China tariff diversification) that are expected to support mid-term margin expansion and top-line growth across Fire Services and Industrial PPE verticals.