Ennis Inc. (NYSE:EBF) Reports Q3 Earnings Beat, Improved Margins Despite Revenue Miss

Ennis, Inc. Reports Mixed Q3 Results, Beats on Profitability Amidst Strategic Inventory Management

ENNIS INC (NYSE:EBF) has released its financial results for the third quarter of fiscal 2026, ending November 30, 2025. The manufacturer of business forms and printed products delivered a performance characterized by steady profitability against a backdrop of modest top-line growth, with the market reaction in early trading reflecting a measured response to the nuanced report.

Earnings and Revenue Versus Estimates

The company's results presented a split outcome when measured against Wall Street expectations. Ennis reported earnings per diluted share (EPS) of $0.42 for the quarter, which surpassed the analyst consensus estimate of $0.41. This represents a 7.7% increase from the $0.39 reported in the same quarter last year.

On the revenue front, the company slightly missed expectations. Quarterly sales came in at $100.2 million, a marginal 0.4% year-over-year increase, but below the estimated $101.5 million. For the first nine months of the fiscal year, revenues of $296.0 million are down 2.0% compared to the prior year period.

The key financial takeaways from the quarter are:

• EPS: $0.42 (Reported) vs. $0.41 (Estimated) – A Beat
• Revenue: $100.2M (Reported) vs. $101.5M (Estimated) – A Miss
• Gross Profit Margin: 31.9%, a significant 260 basis point improvement from 29.3% a year ago.

Market Reaction and Price Action

Following the earnings release, Ennis shares showed modest positive momentum in pre-market trading. This initial reaction suggests investors are focusing on the company's earnings beat and substantial margin expansion, potentially viewing the slight revenue shortfall as less critical given the broader operational context provided in the report. The stock's performance over recent weeks has been relatively stable, indicating no major negative sentiment heading into the announcement.

Strategic Highlights from the Quarterly Report

The earnings press release detailed several strategic moves that underpin the current financials. Management highlighted effective cost control and operational efficiencies as primary drivers behind the expanded gross margin. The company also continues to execute on its acquisition strategy, having completed the purchase of CFC Print & Mail at the end of the quarter. Acquired businesses contributed approximately $5.8 million in revenue for the quarter.

A significant focus was placed on inventory management. The company had strategically built inventory earlier in the year in response to the closure of the sole domestic producer of carbonless paper. During Q3, it successfully reduced inventory from $62.1 million to $60.8 million and expressed confidence in transitioning to alternative supply sources without disruption.

Furthermore, Ennis maintains a debt-free balance sheet with substantial cash reserves. The company also returned capital to shareholders, repurchasing approximately 793,000 shares year-to-date and declaring a regular quarterly cash dividend of $0.25 per share.

Looking Ahead

While the press release did not provide specific quantitative forward guidance, management commentary was generally positive regarding future cash flow and operational stability. The company expects cash flow to improve as inventory purchasing requirements decline in the coming quarters, allowing it to rebuild its cash position.

Analysts currently estimate revenue of $99.1 million and EPS of $0.41 for the upcoming fourth quarter (Q4 2026). For the full fiscal year 2026, the consensus sales estimate stands at $398.4 million.

For a detailed breakdown of historical earnings and future analyst estimates for Ennis, Inc., you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.