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

Rhea-AI Summary

McRae Industries (MCRAA) reported fiscal Q3 2026 net revenues of $27.4 million versus $30.9 million a year earlier. Net earnings were $0.9 million, or $0.38 per diluted share, down from $3.2 million, or $1.40 per share.

For the first nine months, revenues were $86.6 million and net earnings $3.3 million ($1.45 per diluted share), both below fiscal 2025. Gross margins declined, partly due to $3.0 million in tariffs year-to-date. The company received a U.S. government boot contract estimated at $15.4 million over 36 months and ended the quarter with $20.6 million in cash and fully available $6.75 million in credit lines.

Positive

• Government boot contract estimated at $15.4 million over 36 months
• Nine‑month western and lifestyle sales increased to $63.8 million from $61.6 million
• Nine‑month operating profit of $2.6 million, despite lower revenues and higher tariffs
• Cash and cash equivalents of $20.6 million at May 2, 2026
• Fully available credit lines totaling $6.75 million through January 2027
• Operating activities generated approximately $4.5 million of cash in nine months

Negative

• Q3 2026 net revenues fell to $27.4 million from $30.9 million
• Q3 net earnings declined to $0.9 million from $3.2 million
• Nine‑month net earnings decreased to $3.3 million from $6.1 million
• Q3 gross margin fell to 25.2% from 31.7%
• Tariffs totaled $3.0 million in fiscal 2026 year‑to‑date
• Cash balance declined to $20.6 million from $31.6 million
• Working capital decreased to $72.5 million from $85.9 million

News Market Reaction – MCRAA

+5.84%

+5.84% News Effect

On the day this news was published, MCRAA gained 5.84%, reflecting a notable positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Market Context

The stock moved +5.8% in the session following this news. A strong positive reaction aligns with inv...

Analysis

The stock moved +5.8% in the session following this news. A strong positive reaction aligns with investors emphasizing McRae’s ongoing profitability and contract wins despite margin pressure. The company reported Q3 fiscal 2026 net revenues of $27.4M and nine-month net earnings of $3.262M, while securing a $15.44M Air Force boot contract and maintaining $20.6M in cash. However, tariff costs of $3.0M, lower year-on-year earnings, and reduced working capital could temper enthusiasm if contract execution or refund efforts underperform.

Key Figures

Q3 2026 net revenues: $27,418,000 Q3 2026 EPS: $0.38 per diluted Class A share Nine-month 2026 revenues: $86,569,000 +5 more

8 metrics

Q3 2026 net revenues $27,418,000 Third quarter fiscal 2026 vs $30,870,000 in Q3 2025

Q3 2026 EPS $0.38 per diluted Class A share Third quarter fiscal 2026 vs $1.40 in Q3 2025

Nine-month 2026 revenues $86,569,000 First nine months fiscal 2026 vs $87,120,000 prior year

Nine-month 2026 EPS $1.45 per diluted Class A share First nine months fiscal 2026 vs $2.68 prior year

Air Force boot contract $15,441,664 Estimated award amount, 36-month ordering period

Cash and equivalents $20.6 million At May 2, 2026 vs $31.6 million at August 2, 2025

Tariffs paid FY 2026 YTD $3.0 million Tariffs in first nine months fiscal 2026

Operating cash flow $4.5 million Cash provided by operating activities, first nine months fiscal 2026

Historical Context

3 past events · Latest: Jun 04 (Positive)

Pattern 3 events

Date	Event	Sentiment	24h Move	Catalyst
Jun 04	Dividend declaration	Positive	-0.3%	Announced $0.14 cash dividend payable July 1, 2026.
Mar 17	Earnings release	Neutral	+0.8%	Reported Q2 2026 results with tariff pressure and share repurchase plan.
Mar 05	Dividend declaration	Positive	+1.0%	Declared $0.14 dividend payable April 1, 2026.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Recent dividend announcements produced mixed reactions, while the prior earnings report saw a modestly positive move despite margin pressure.

Recent Company History

Over recent months, McRae has combined steady shareholder returns with mixed earnings trends. Two dividend declarations on March 5, 2026 and June 4, 2026 at $0.14 per share showed generally stable capital return policies, with small price reactions around them. The prior earnings release on March 17, 2026 highlighted tariff-driven margin pressure but still yielded a 0.78% gain. Today’s third-quarter and nine-month fiscal 2026 results extend themes of margin compression and tariff costs alongside ongoing boot brand shifts and government demand.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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MOUNT GILEAD, N.C., June 15, 2026 /PRNewswire/ -- McRae Industries, Inc. (Pink Sheets: MCRAA and MCRAB) reported consolidated net revenues for the third quarter of fiscal 2026 of $27,418,000 as compared to $30,870,000 for the third quarter of fiscal 2025. Net earnings for the third quarter of fiscal 2026 amounted to $858,000, or $0.38 per diluted Class A common share, as compared to $3,160,000, or $1.40 per diluted Class A common share, for the third quarter of fiscal 2025.

Consolidated net revenues for the first nine months of fiscal 2026 totaled $86,569,000 as compared to $87,120,000 for the first nine months of fiscal 2025. Net earnings for the first nine months of fiscal 2026 amounted to $3,262,000, or $1.45 per diluted Class A common share, as compared to net earnings of $6,059,000, or $2.68 per diluted Class A common share, for the first nine months of fiscal 2025.

THIRD QUARTER FISCAL 2026 COMPARED TO THIRD QUARTER FISCAL 2025

Consolidated net revenues totaled $27.4 million for the third quarter of fiscal 2026 as compared to $30.9 million for the third quarter of fiscal 2025. Sales related to our western/lifestyle boot products for the third quarter of fiscal 2026 totaled $19.7 million as compared to $20.2 million for the third quarter of fiscal 2025. This decrease in net revenues was mainly driven by a decrease in our Laredo brand. Revenues from our work boot products decreased from $8.7 million for the third quarter of fiscal 2025 to $7.9 million for the third quarter of fiscal 2026. This was primarily a result of decreased orders on military boots. Additionally, third quarter revenues for fiscal 2025 included $2.0 million in land sales through our affiliate American Mortgage Investment Company (AMIC).

Consolidated gross profit for the third quarter of fiscal 2026 amounted to approximately $6.9 million as compared to $9.8 million for the third quarter of fiscal 2025. Gross profit, as a percentage of net revenues, decreased from 31.7% for the third quarter of fiscal 2025 to 25.2% for the third quarter of fiscal 2026. Gross profit in the prior year was positively affected by $1.6 million from the land sale mentioned above. Our margins have also been negatively impacted by tariffs, as we paid $0.8 million in the third quarter for tariffs. Based on current information, we are seeking a refund for these tariff costs (as well as tariff costs for prior periods) but there can be no assurance we will receive any such refunds.

Consolidated selling, general and administrative expenses totaled approximately $6.1 million for the third quarter of fiscal 2026 as compared to $6.3 million for the third quarter of fiscal 2025. This decrease resulted primarily from decreased commissions, offset by an increase in marketing expenses.

As a result of the above, the consolidated operating profit for the third quarter of fiscal 2026 amounted to $0.8 million as compared to $3.5 million for the third quarter of fiscal 2025.

FIRST NINE MONTHS FISCAL 2026 COMPARED TO FIRST NINE MONTHS FISCAL 2025

Consolidated net revenues for the first nine months of fiscal 2026 totaled $86.6 million as compared to $87.1 million for the first nine months of fiscal 2025. Our western and lifestyle product sales totaled $63.8 million for the first nine months of fiscal 2026 as compared to $61.6 million for the first nine months of fiscal 2025. This increase in net revenues was driven by an increase in our Dan Post and Dingo brands, offset by a decrease in our Laredo and El Dorado brands. Net revenues from our work boot business decreased from $24.2 million for the first nine months of fiscal 2025 to $23.3 million for the first nine months of fiscal 2026. This decrease was in our Dan Post and Laredo work brands.

Consolidated gross profit totaled $22.1 million, or 25.6%, for the first nine months of fiscal 2026 as compared to $25.3 million, or 29.0%, for the first nine months of fiscal 2025. This decrease was not only driven by the land sale mentioned above, but also $3.0 million in tariffs paid in this fiscal year. Based on current information, we are seeking a refund for these tariff costs (as well as tariff costs for prior periods) but there can be no assurance we will receive any such refunds.

Consolidated selling, general and administrative expenses totaled approximately $19.5 million for the first nine months of fiscal 2026 as compared to $19.2 million for the first nine months of fiscal 2025. This increase resulted primarily from increased marketing expenses.

As a result of the above, the consolidated operating profit amounted to $2.6 million for the first nine months of fiscal 2026 as compared to $6.1 million for the first nine months of fiscal 2025.

On April 29^th, 2026, McRae Industries, Inc. received a contract award from The United States Government DLA Troops Support for Airforce temperate weather boots. This contract has a 36 month ordering period with first delivery no later than 150 days from contract award. The estimated dollar amount for the award is $15,441,664.

Financial Condition and Liquidity

Our financial condition remained strong at May 2, 2026 as cash and cash equivalents totaled $20.6 million as compared to $31.6 million at August 2, 2025. Our working capital decreased from $85.9 million at August 2, 2025 to $72.5 million at May 2, 2026.

We currently have two lines of credit totaling $6.75 million, all of which was fully available at May 2, 2026. One credit line totaling $1.75 million (which is restricted to one hundred percent of the outstanding receivables due from the Government) expires in January 2027. Our $5.0 million line of credit, which also expires in January 2027, is secured by the inventory and accounts receivable of our Dan Post Boot Company subsidiary.

For the first nine months of fiscal 2026, operating activities provided approximately $4.5 million of cash. Net earnings, as adjusted for depreciation and other non-cash items, contributed approximately $3.2 million of cash. Increased accounts receivable and decreased employee benefits liabilities used approximately $2.0 million of cash. Decreased accounts payable and other assets provided approximately $2.5 million of cash.

Net cash used by investing activities totaled approximately $13.6 million, primarily due to the purchase of fixed assets and securities, offset by the sale of securities.

Net cash used in financing activities totaled $1.8 million, which was used primarily for dividend payments and the repurchase of stock.

We believe that our current cash and cash equivalents, cash generated from operations, and available credit lines will be sufficient to meet our capital requirements for the remainder of fiscal 2026.

Forward-Looking Statements

This press release includes certain forward-looking statements. Important factors that could cause actual results or events to differ materially from those projected, estimated, assumed or anticipated in any such forward-looking statements include: the effect of competitive products and pricing, the potential impact of tariffs on our business, uncertainties concerning the tariff refund program announced in March 2026, risks unique to selling goods to the Government (including variation in the Government's requirements for our products and the Government's ability to terminate its contracts with vendors), changes in fashion cycles and trends in the western boot business, loss of key customers, acquisitions, supply interruptions, additional financing requirements, our expectations about future Government orders for military boots, loss of key management personnel, our ability to successfully develop new products and services, and the effect of general economic conditions in our markets.

McRae Industries, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
		May 2, 2026		August 2, 2025
ASSETS
Current assets:
Cash and cash equivalents		$20,634		$31,593
Equity investments		9,383		8,730
Debt securities		4,963		6,786
Accounts receivable, net		18,945		17,836
Inventories, net		24,325		24,599
Income tax receivable		350		639
Prepaid expenses and other current assets		577		1,611
Total current assets		79,178		91,794
Property and equipment, net		8,824		5,274
Other assets:
Deposits		3		14
Right to Use Asset		1,174		1,589
Real estate held for investment		2,321		2,311
Debt securities		16,327		5,032
Trademarks		2,824		2,824
Total other assets		22,648		11,770
Total assets		$110,650		$108,838

 

McRae Industries, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
		May 2, 2026		August 2, 2025
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$3,577		$2,093
Accrued employee benefits		548		1,232
Accrued payroll and payroll taxes		973		823
Lease liability		555		555
Other		980		1,143
Total current liabilities		6,633		5,846
Lease liability		619		1,034
Deferred tax liabilities		382		382
Total liabilities		7,634		7,262
Shareholders' equity:
Common Stock:
Class A, $1 par value; authorized 5,000,000 shares    issued and outstanding, 1,888,332 and 1,892,793    shares, respectively		1,888		1,893
Class B, $1 par value; authorized 2,500,000 shares;    issued and outstanding, 361,904 and 362,977    shares, respectively		362		363
Retained earnings		100,766		99,320
Total shareholders' equity		103,016		101,576
Total liabilities and shareholders' equity		$110,650		$108,838

 

McRae Industries, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
	Three Months Ended				Nine Months Ended
	May 2,		May 3,		May 2,		May 3,
	2026		2025		2026		2025
Net revenues	$27,418		$30,870		$86,569		$87,120
Cost of revenues	20,520		21,077		64,420		61,859
Gross profit	6,898		9,793		22,149		25,261
Selling, general and administrative expenses	6,114		6,279		19,508		19,190
Operating profit	784		3,514		2,641		6,071
Other income	427		271		1,869		1,733
Earnings before income taxes	1,211		3,785		4,510		7,804
Provision for income taxes	353		625		1,248		1,745
Net earnings	$858		$3,160		$3,262		$6,059
Earnings per common share:
Diluted earnings per share:
Class A	0.38		1.40		1.45		2.68
Class B	NA		NA		NA		NA
Weighted average number of common shares outstanding:
Class A	1,892,499		1,895,011		1,892,695		1,895,893
Class B	362,906		363,509		362,953		363,720
Total	2,255,405		2,258,520		2,255,648		2,259,613

 

McRae Industries, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except share data)
(Unaudited)
		Common Stock, $1 par value				Accumulated Other
		Class A		Class B		Comprehensive	Retained
		Shares	Amount	Shares	Amount	Income (Loss)	Earnings
Balance, August 3, 2024		1,896,334	$1,897	363,826	$364	$0	$94,805
Cash Dividend ($0.14 per  Class A common stock)							(265)
Cash Dividend ($0.14 per Class B common stock)							(51)
Net earnings							1,846
Balance, November 2, 2024		1,896,334	$1,897	363,826	$364	$0	$96,335
Cash Dividend ($0.84 per  Class A common stock)							(1,592)
Cash Dividend ($0.84 per Class B common stock)							(304)
Net earnings							1,053
Balance, February 1, 2025		1,896,334	$1,897	363,826	$364	$0	$95,492
Stock Buyback		(3,541)	(4)	(849)	(1)		(214)
Cash Dividend ($0.14 per  Class A common stock)							(266)
Cash Dividend ($0.14 per Class B common stock)							(51)
Net earnings							3,160
Balance, May 3, 2025		1,892,793	$1,893	362,977	$363	$0	$98,121
		Common Stock, $1 par value				Accumulated Other
		Class A		Class B		Comprehensive	Retained
		Shares	Amount	Shares	Amount	Income (Loss)	Earnings
Balance, August 2, 2025		1,892,793	$1,893	362,977	$362	$0	$99,320
Cash Dividend ($0.14 per  Class A common stock)							(265)
Cash Dividend ($0.14 per Class B common stock)							(51)
Net earnings							1,449
Balance, November 1, 2025		1,892,793	$1,893	362,977	$362	$0	$100,453
Cash Dividend ($0.42 per  Class A common stock)							(795)
Cash Dividend ($0.42 per Class B common stock)							(152)
Net earnings							956
Balance, January 31, 2026		1,892,793	$1,893	362,977	$362	$0	$100,462
Stock Buyback		(4,461)	(4)	(1,073)	(1)		(238)
Cash Dividend ($0.14 per  Class A common stock)							(265)
Cash Dividend ($0.14 per Class B common stock)							(51)
Net earnings							858
Balance, May 2, 2026		1,888,332	$1,889	361,904	$361	$0	$100,766

 

McRae Industries, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
		Nine Months Ended
		May 2,		May 3,
		2026		2025
Cash Flows from Operating Activities:
Net earnings		$3,262		$6,059
Adjustments to reconcile net earnings to net cash used in operating activities		1,214		(3,810)
Net cash provided in operating activities		4,476		2,249
Cash Flows from Investing Activities:
Proceeds from sale of land		-		2,010
Purchase of land		(10)		-
Proceeds from sale of fixed assets		-		263
Capital expenditures		(4,125)		(669)
Purchase of securities		(14,079)		(2,216)
Proceeds from sale of securities		4,600		9,509
Net cash used in investing activities		(13,614)		8,897
Cash Flows from Financing Activities:
Repurchase company stock		(243)		(219)
Dividends paid		(1,578)		(2,529)
Net cash used in financing activities		(1,821)		(2,748)
Net (Decrease) Increase in Cash and Cash equivalents		(10,959)		8,398
Cash and Cash Equivalents at Beginning of Year		31,593		20,723
Cash and Cash Equivalents at End of Period		$20,634		$29,121

 

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SOURCE McRae Industries, Inc.

FAQ

How did McRae Industries (MCRAA) perform in Q3 2026 earnings?

McRae Industries reported Q3 2026 net earnings of $858,000, or $0.38 per diluted share. According to McRae Industries, this compares with $3,160,000, or $1.40 per diluted Class A common share, on net revenues that declined to $27.4 million from $30.9 million.

What were McRae Industries (MCRAA) revenues and profit for the first nine months of fiscal 2026?

For the first nine months of fiscal 2026, McRae Industries generated net revenues of $86.6 million and net earnings of $3.3 million. According to McRae Industries, this compares with $87.1 million in revenues and $6.1 million in net earnings for the same period of fiscal 2025.

How did tariffs impact McRae Industries (MCRAA) results in fiscal 2026?

Tariffs increased costs and reduced margins for McRae Industries in fiscal 2026. According to McRae Industries, it paid $0.8 million in tariffs in Q3 and $3.0 million year-to-date, contributing to gross margin declines, and is seeking refunds with no assurance of recovery.

What government contract did McRae Industries (MCRAA) receive in April 2026?

On April 29, 2026, McRae Industries received a U.S. government DLA Troop Support contract for Airforce temperate weather boots. According to McRae Industries, the contract has a 36‑month ordering period and an estimated dollar amount of $15,441,664.

How strong is McRae Industries (MCRAA) liquidity after Q3 2026?

McRae Industries reported solid liquidity with $20.6 million in cash and cash equivalents at May 2, 2026. According to McRae Industries, it also had $72.5 million in working capital and two fully available credit lines totaling $6.75 million, both expiring in January 2027.

What drove changes in McRae Industries (MCRAA) boot segment sales in fiscal 2026?

Western and lifestyle boot sales rose to $63.8 million for nine months, while work boot revenues decreased to $23.3 million. According to McRae Industries, growth in Dan Post and Dingo brands was offset by weaker Laredo, El Dorado, and certain work boot orders, including military boots.

How much cash did McRae Industries (MCRAA) generate from operations in the first nine months of 2026?

Operating activities provided approximately $4.5 million of cash during the first nine months of fiscal 2026. According to McRae Industries, net earnings adjusted for non-cash items contributed about $3.2 million, while working capital changes, including receivables and payables movements, drove the remaining net operating cash inflow.