Insteel Industries reports lower profits in the third quarter of 2026 as cost inflation outstrips price growth

The American company Insteel Industries Inc. announced a net profit of $9.0 million for the third quarter of fiscal year 2026 ended June 27, 2026, compared with a net profit of $5.2 million in the second quarter of fiscal year 2026 and $15.2 million in the third quarter of fiscal year 2025. Net sales for the third quarter were $197.7 million, compared to $172.7 million in the second quarter. and $179.9 million in the same quarter a year ago.

Net sales increased by 9.9 percent year-on-year, driven by an 8.0 percent increase in average selling prices and a 1.7 percent increase in shipments. Accordingly, average selling prices increased by 2.3 percent and shipments increased by 11.9 percent compared to the second quarter. Despite the revenue improvement, gross profit decreased to $20.1 million from $30.8 million in the previous year's quarter, and gross profit decreased to 10.2 percent from 17.1 percent as inflationary pressures on wire rod, freight, and operating costs more than offset price and volume increases.

In the first nine months of fiscal year 2026, net income was $21.8 million, compared with $26.5 million in the same period a year ago. Net sales for the nine-month period increased to $530.2 million from $470.3 million, driven by a 13.1% increase in average selling prices, while supply volumes remained relatively unchanged. Gross profit for the nine-month period decreased to 10.3 percent from 13.8 percent in the same period of the previous year.

Operating cash flow for the quarter was $13.7 million, compared to $28.2 million in the previous year's quarter. The company ended the quarter debt-free, with $22.9 million in cash and no outstanding loans under a revolving credit facility of $100.0 million. During the quarter, Insteel repurchased 75,000 ordinary shares for $1.9 million. Since the beginning of the year, the company has returned $23.8 million to shareholders through dividends and share buybacks.

Capital expenditures for the first nine months totaled $9.1 million. The full-year capital expenditure forecast has been revised to about $15.0 million, compared with the previous expectation of $20.0 million, reflecting the timing of certain projects rather than any changes to planned investment activities, with some of the related costs now expected to be incurred in fiscal year 2027.

H.

O. Volz III, Insteel's president and CEO, said, "The business environment remained favorable during the quarter as supply volumes increased compared to the previous year. Customer sentiment remains