Lakeland Industries, Inc. (LAKE) Market Cap
Lakeland Industries, Inc. has a market capitalization of $113.3M.
Financials based on reported quarter end 2026-01-31
Price: $10.57
▼ -0.37 (-3.38%)
Market Cap: 113.34M
NASDAQ · time unavailable
CEO: James Jenkins
Sector: Consumer Cyclical
Industry: Apparel - Manufacturers
IPO Date: 1986-09-09
Website: https://www.lakeland.com
Lakeland Industries, Inc. (LAKE) - Company Information
Market Cap: 113.34M · Sector: Consumer Cyclical
Lakeland Industries, Inc. manufactures and sells industrial protective clothing and accessories for the industrial and public protective clothing market worldwide. It offers limited use/disposable protective clothing, such as coveralls, laboratory coats, shirts, pants, hoods, aprons, sleeves, arm guards, caps, and smocks; high-end chemical protective suits to provide protection from highly concentrated, toxic and/or lethal chemicals, and biological toxins; and firefighting and heat protective apparel to protect against fire. The company also provides durable woven garments, including electrostatic dissipative apparel used in electronics clean rooms; flame resistant meta aramid, para aramid, and FR cotton coveralls/pants/jackets used in petrochemical, refining operations, and electrical utilities; FR fabrics; and cotton and polycotton coveralls, lab coats, pants, and shirts. In addition, it provides high visibility clothing comprising reflective apparel, including vests, T-shirts, sweatshirts, jackets, coats, raingear, jumpsuits, hats, and gloves; and gloves and sleeves that are used in the automotive, glass, and metal fabrication industries. The company sells its products to a network of approximately 1,600 safety and industrial supply distributors through in-house sales teams, customer service group, and independent sales representatives. It serves end users, such as integrated oil, chemical/petrochemical, automobile, steel, glass, construction, smelting, cleanroom, janitorial, pharmaceutical, and high technology electronics manufacturers, as well as scientific, medical laboratories, and the utilities industry; and federal, state, and local governmental agencies and departments. The company was incorporated in 1982 and is headquartered in Huntsville, Alabama.
Analyst Sentiment
Based on 9 ratings
Analyst 1Y Forecast: $16.38
Average target (based on 2 sources)
Consensus Price Target
Low
$10
Median
$14
High
$19
Average
$14
Potential Upside: 36.2%
Price & Moving Averages
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Fundamentals Overview
Lakeland reported strong revenue growth in FY2026 (+15.2% to $192.6M) driven by a rapid shift toward fire services (+48.6% to $93.6M; ~49% of total revenue). However, profitability deteriorated materially: adjusted gross margin fell ~810 bps year over year (34.4% vs 42.5%), and adjusted EBITDA (ex FX) dropped to ~$7.2M from ~$17.4M, with Q4 margin down ~890 bps to 33.5% and Q4 adjusted EBITDA (ex FX) ~$1.3M. Management attributes the miss to execution and cost dynamics (freight, raw materials, tariffs/duties) plus deleverage from manufacturing underutilization in Mexico/Vietnam and a structurally lower-margin initial fire mix. The offsetting positives are clear: NFPA 1970/2025 certification unlock enables head-to-toe ordering, and the fire open pipeline is now highly visible ($130M+), with FDIC next week and Interschutz in June as key conversion catalysts. Liquidity improved post-year-end via ~$14M HPFR/HiViz divestiture proceeds and an anticipated ABL facility, while FY2027 targets remain single-to-high-single-digit revenue growth with line of sight to positive operating cash flow.
Growth Catalysts
- Fire services segment scaled rapidly: fire service revenue +48.6% to $93.6 million in FY2026; segment now ~49% of total revenue (from ~21% two years prior).
- NFPA 1970/2025 certification unlock across portfolio (structural turnout/proximity gear, Meridian gloves/hoods, Jolly boots, Pacific helmets) enabling full head-to-toe ordering.
- Recurring decontamination/service expansion: California PPE Fresno facility opened January 2026; Denver location expected to open in 2026; ISP growth “faster than initially projected.”
Business Development
- Divestiture: HPFR and HiViz product lines sold to National Safety Apparel for ~$14 million cash proceeds (completed after fiscal year-end).
- Acquisitions completed during FY2026: Arizona PPE and California PPE (expanded U.S. fire services distribution and rental with ISP locations; also added Fresno facility).
- Fire international wins cited: National Fire Department of Colombia (emergency follow-on orders), Fire and Rescue Department of Malaysia (order), ANAC Argentina (fire equipment tender award).
- EMEA brand platform event: planned LHD Germany relaunch at Interschutz 2026 (held every five years).
Financial Highlights
- FY2026 net sales: $192.6 million, +$25.4 million (+15.2%) vs FY2025 $167.2 million.
- Q4 net sales: $45.8 million, down $0.8 million (-1.7%) vs prior-year quarter ($46.6 million).
- Adjusted EBITDA (ex FX): FY2026 ~$7.2 million vs ~$17.4 million prior year; Q4 ~$1.3 million vs ~$6.1 million prior year.
- Adjusted gross margin: Q4 33.5% vs 42.4% Q4 FY2025 (-~890 bps). Full year 34.4% vs 42.5% (-~810 bps).
- Drivers of margin compression: lower initial margins from fire mix (fire grew to ~49% of revenue), manufacturing underutilization in Mexico/Vietnam, raw material cost pressure, elevated inbound freight and duties, and execution gaps in production planning.
- Expense discipline: adjusted operating expenses (ex FX) up only +10.2% FY to $59.2 million; management emphasized expense minimal year-over-year and expense discipline holding.
- Cash flow: Q4 generated ~$2.0 million of operating cash (also referenced ~$1.8 million operating cash by CFO); focus on inventory/work-capital alignment.
- Inventory: ended Jan 31, 2026 inventory $80.5 million, down ~$5.4 million from $87.9 million at Q3; essentially flat YoY while revenue grew ~15%.
Capital Funding
- Total borrowings: $32.3 million; $28.5 million outstanding under revolving credit facility with ~$11.5 million additional availability on revolver (as of 01/31/2026).
- Decatur, Alabama warehouse transaction: $6.1 million sale and partial leaseback generating ~$4.3 million pretax gain; $100% of net proceeds used to repay revolving credit facility.
- ABL facility: in advanced negotiations; expected to close “soon” but timing not assured; Bank of America covenant waiver secured with expectation of being in covenant throughout FY2027.
- Post-year-end liquidity uplift: HPFR/HiViz divestiture generated ~ $14 million additional cash proceeds not reflected at year-end.
Strategy & Ops
- Forecasting/accountability tightening and sales-to-production planning structure added to address execution gaps.
- Manufacturing footprint consolidation and supply chain restructuring planned; transition production from India into Mexico and Vietnam facilities to improve utilization.
- ERP rollout plan revised with “new implementation partner” targeting 2027.
- Inventory optimization explicitly prioritized to reduce carrying costs and release working capital (inventory down from October; further disciplined lowering targeted in FY2027).
- EMEA operational restructuring for LHD Germany: reduce overhead/rightsize cost base for current conditions.
Market Outlook
- FY2027 goalposts: single to high single-digit revenue growth and “clear line of sight to positive cash flow from operations.”
- Event-driven commercial timing: FDIC 2026 next week (NFPA push through North/South America) and Interschutz 2026 in June (LHD Germany relaunch and integrated EMEA head-to-toe platform launch).
- LHD Germany relaunch timing: planned at Interschutz 2026 in June 2026.
- Denver facility: expected to open in 2026; Fresno opened in January 2026.
Risks & Headwinds
- Cost volatility and planning/pricing execution weaknesses: freight inflation, raw material pressure, tariffs, and certification timing delays impacted production efficiency and gross margin conversion.
- Gross margin pressure from mix and deleverage: fire services ramp shifted revenue mix toward lower initial margin profile; underutilization in Mexico/Vietnam created fixed-cost deleverage.
- Q4 timing softness: Europe Q4 revenue down primarily due to timing of LHD and Jolly orders and delayed government tenders; not viewed as structural demand loss.
- Tariff environment remains a factor for industrial (disposables faced pressure via tariff-related cost increases and North America softness), though management expects mitigation without structural disruption to cost base.
- Iran conflict referenced as potential impact on logistics/freight and supply chain costs.
Q&A: Analyst Interest
- Topic: Size/visibility of the fire services order pipeline and how certifications translate into order-writing; Management’s detailed response: Management clarified “largest open orders” means the open book of scheduled production orders with C-sale/invoice visibility, driven by integrating CRM into Salesforce and sales ops structuring a full global view. They cited $130+ million visible open pipeline, $22+ million in higher probabilities over half. Certifications released act like “opening of the spigot,” with FDIC next week central to North/South America and a broader global rollout at the June show.
- Topic: Mechanics of conversion at major shows (FDIC/Interschutz) and what types of orders can appear; Management’s detailed response: Management explained FDIC is largely a visible/tire-kicking forum, not typically an order-writing show, but it can trigger inputs for field trials/user trials. They noted that smaller commodity item orders (e.g., helmets/boots) may appear, while larger department conversions usually lead to tender/RFQ or wear-trial cycles, pushing commercialization beyond mere exhibitor interest.
Sentiment: CAUTIOUS
Note: This summary was synthesized by AI from the LAKE Q4 2026 (fiscal year ended 01/31/2026) earnings transcript. Financial data is complex; please verify all metrics against official SEC filings before making investment decisions.