McRAE INDUSTRIES, INC. REPORTS EARNINGS FOR THE THIRD QUARTER AND FIRST NINE MONTHS OF FISCAL 2026

Key Takeaways:

• McRae’s net revenues and earnings decreased year over year.
• Tariffs significantly impacted the company’s gross margins.
• Western/lifestyle boot sales fell slightly while work boot sales slid more sharply.
• A new U.S. Government contract may spur future revenue.
• Liquidity remains solid, despite lower cash balances compared to last year.

Financial Performance

McRae Industries, Inc. posted consolidated net revenues of $27.4 million for the third quarter of fiscal 2026, down from $30.9 million in the same quarter of fiscal 2025. Net earnings for the third quarter dropped to $858,000 from $3.16 million year over year, reflecting the strain of decreased sales in several product lines and additional tariff costs.

Third Quarter Results

Revenues from western and lifestyle boots totaled $19.7 million, compared to $20.2 million in the prior-year period. Company officials noted that reduced orders for their Laredo brand contributed to this decrease. Work boot revenues declined from $8.7 million to $7.9 million, primarily linked to fewer military boot orders. McRae’s gross profit for the third quarter came in at $6.9 million, a decrease from $9.8 million the previous year, due in part to tariffs totaling approximately $0.8 million this quarter.

First Nine Months of Fiscal 2026

Over the first nine months of fiscal 2026, McRae reported consolidated net revenues of $86.6 million, slightly below the $87.1 million recorded for the same period in fiscal 2025. Western and lifestyle product sales rose to $63.8 million, bolstered by stronger Dan Post and Dingo brands, though Laredo and El Dorado sales dropped. Work boot brands, including Dan Post and Laredo work lines, fell from $24.2 million to $23.3 million. Tariff expenses, which totaled around $3.0 million for the year to date, also weighed on net earnings, which decreased to $3.26 million from $6.06 million in the prior year’s first nine months.

New Government Contract

On April 29, 2026, McRae Industries secured a new contract worth an estimated $15.44 million from the U.S. Government’s DLA Troops Support to supply Air Force temperate weather boots. This 36-month contract, with deliveries beginning within 150 days of the award, is expected to provide a measure of stability and revenue growth amid broader headwinds.

Financial Condition and Liquidity

As of May 2, 2026, McRae’s cash and cash equivalents stood at $20.6 million, down from $31.6 million at August 2, 2025. Meanwhile, working capital decreased from $85.9 million to $72.5 million over the same period, though the company affirms that current cash reserves, operations, and available credit lines are sufficient for the balance of fiscal 2026.

Forward-Looking Statements

McRae Industries cautions that factors such as tariffs, competition, potential changes in government orders, and shifting consumer preferences may affect future results. The company remains cautiously optimistic that its diverse product lines and the newly awarded government contract will bolster performance in the months ahead.