FGI Industries Ltd. reported third‑quarter 2025 revenue of $35.8 million, a 0.7% year‑over‑year decline that reflects the ongoing impact of tariff uncertainty on customer demand. The decline was driven by a 1.3% increase in U.S. revenue and a 7.3% rise in European sales, offset by an 8.0% drop in Canada. Sanitaryware revenue grew 7.0% to $22.9 million, while bath furniture and shower systems fell 10.8% and 17.8%, respectively, underscoring the uneven performance across product lines.
Gross profit rose to $9.5 million, up 2.0% from the prior year, and the gross margin expanded to 26.5%, a 70‑basis‑point gain. The margin improvement stems from a mix shift toward higher‑margin sanitaryware and a modest price lift in the U.S. and European markets, which helped offset the cost pressure from higher freight and tariff‑related expenses. The company’s pricing strategy, supported by customer and supplier collaboration, allowed it to maintain margin discipline even as overall revenue slipped.
Operating income turned positive at $0.4 million, reversing a $0.1 million loss in the same quarter last year. However, GAAP net loss widened to $1.7 million, largely due to a $1.65 million charge related to restructuring and a $0.29 million impairment of intangible assets. Adjusted net income, which excludes these one‑time items, was $0.24 million, indicating that core operations are improving. The company’s 10‑Q filing disclosed “substantial doubt” about its ability to continue as a going concern, a critical risk highlighted by the ongoing tariff environment and covenant non‑compliance.
Segment analysis shows that U.S. revenue grew 1.3% to $12.5 million, driven by a 5.2% increase in sanitaryware sales. European revenue rose 7.3% to $10.2 million, supported by a 9.1% jump in sanitaryware and a 4.5% rise in bath furniture. Canadian revenue fell 8.0% to $3.1 million, largely due to a 12.4% decline in shower systems. The sharp drop in shower systems and bath furniture reflects intensified competition and price sensitivity in those categories, while the growth in sanitaryware demonstrates the effectiveness of the company’s Brands, Products, and Channels (BPC) strategy.
FGI reiterated its fiscal‑2025 guidance and confirmed that it will hold earnings calls only for the second and fourth quarters. Analysts had expected revenue of $35.85 million and an EPS of –$0.43; the company beat revenue by 0.42% and delivered an adjusted EPS of $0.13, a $0.56 per‑share beat. Despite the earnings beat, market sentiment remained cautious because the revenue shortfall and the going‑concern disclosure tempered enthusiasm. Management emphasized continued focus on tariff‑mitigation through a China+1 sourcing strategy and on cost discipline, signaling confidence that the company can navigate the current headwinds while pursuing growth in high‑margin sanitaryware and European markets.
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