Lakeland Industries (NASDAQ:LAKE) reported a modest increase in fiscal first-quarter revenue and a swing to profitability, as management said demand in its fire services platform continued to build while the company works through margin pressures tied to product mix, certification costs and operational transitions.
President, Chief Executive Officer and Executive Chairman Jim Jenkins said net sales for the quarter ended April 30, 2026, were $47.4 million, up 1.4% from $46.7 million in the prior-year period. Net income was approximately $0.4 million, or $0.04 per basic and diluted share, compared with a net loss of $3.9 million, or $0.41 per basic and diluted share, in the first quarter of fiscal 2026.
“The first quarter reflected continued progress against our plan,” Jenkins said, adding that the company does not view the quarter’s margin headwinds as structural. “Importantly, this is not a demand story. Demand across our fire services platform, our service business, and key industrial channels remains healthy.”
Fire services drives growth
Chief Revenue Officer Barry Phillips said fire services revenue rose 11% year over year to $23.4 million, representing about 49% of total company revenue. Management said the mix reflects Lakeland’s continued transformation toward the global fire protection market.
Phillips said the quarter was a “milestone period” for the company’s fire portfolio, with NFPA 1970 certifications achieved for Pacific Helmets, Jolly boots, Veridian turnout gear, boots and gloves, and Lakeland turnout gear and gloves. The certifications allow customers to order a complete certified head-to-toe range across the company’s brands.
The company showcased the portfolio at FDIC in the U.S. and Interschutz in Germany. Phillips said those events, combined with the certification progress, accelerated sales activity and pushed open order backlog to “historic levels.” Manufacturing ramp-up activities are underway at Lakeland, Veridian, Pacific and Jolly, he said.
In response to a question from ROTH Capital Partners analyst Gerard Sweeney, Phillips said the backlog is tied primarily to turnout gear, which typically carries an eight- to 12-week manufacturing lead time, though capacity constraints are pushing that out somewhat. Jenkins said the operational focus has shifted from generating demand to ensuring production can meet the sales pipeline.
Services platform remains a priority
Lakeland also highlighted growth in its independent service provider, or ISP, platform, which provides inspection, cleaning, repair, rental and decontamination services for fire departments and other safety customers. Jenkins said the company expects to open another ISP location in Denver and is expanding its Arizona PPE facility in Phoenix. It also added CO2 decontamination capability in Fresno, California.
Management described CO2 decontamination as an advanced service that can complement traditional wet washing. During the question-and-answer session, Jenkins said the combination of wet wash and CO2 could provide significantly higher decontamination efficacy than the minimum baseline required for a certified ISP. Phillips said the two methods are effective against different contaminants, making the combination important for a broader range of exposures.
Chief Financial Officer Calven Swinea said the service business is currently running at about $4 million to $5 million in revenue per quarter globally. In response to Lake Street Capital analyst Mark Smith, management said the U.S. portion is “a little less than half” of that total, with acquired sites in California and Arizona, the Fresno expansion and the planned Colorado site supporting future growth.
Jenkins said greenfield ISP expansion is attractive from a capital allocation standpoint, estimating a new location can cost about $350,000 to $500,000 to build out and potentially reach $2 million in revenue within about 12 months.
Industrial business shows uneven recovery
Chief Commercial Officer Cameron Stokes said the industrial and chemical critical environment business showed improved momentum across most regions in the first quarter, with the U.S. and Canada the only businesses not exceeding budget. Latin America delivered 119% of plan, while Asia delivered 132% of plan, he said.
Stokes said chemical improved in most regions, while critical environment remains a recovery priority. He said the company expects a strong second quarter in critical environment, supported by better forecasting, demand planning, capacity resolution and stronger end-user demand generation.
Disposables performed well overall despite a “significant U.S. miss,” Stokes said. Jenkins added that while demand has improved in certain industrial channels, Lakeland has not yet seen a meaningful recovery in the U.S. or a meaningful uptick in oil and gas turnaround activity.
Margins pressured by timing and transition costs
Swinea said adjusted gross profit was $15.9 million, compared with $16.5 million in the prior-year period. He attributed the lower gross margin to sales mix and product costs, as well as macroeconomic pressure, partially offset by lower inbound freight and duties.
Swinea said about 330 basis points of first-quarter margin pressure came from items the company views as timing related, transitional or investment-driven. Those included:
- Approximately 150 basis points from product mix, including inventory build ahead of Jolly’s U.S. fire market launch;
- About 80 basis points from NFPA certification costs and transition costs tied to prior certified products;
- Roughly 70 basis points from the release of previously capitalized freight costs as inventory was reduced;
- About 30 basis points from startup costs at the Fresno ISP location.
“First quarter margin pressure was driven by timing, certification transition, inventory positioning, capitalized freight release, and start-up costs, not by a loss of pricing power or fundamental deterioration in the business model,” Swinea said.
Adjusted operating expenses excluding foreign exchange fell to $14.8 million from $15.9 million a year earlier. Swinea said restructuring and cost-control efforts initiated in the prior year drove the reduction, though trade show expenses affected the first half of the year.
Balance sheet, divestiture and outlook
Lakeland ended the quarter with $17.4 million in cash and cash equivalents, up from $12.5 million at the end of fiscal 2026. Working capital was approximately $92.4 million. Swinea said the company had $23.8 million outstanding under its revolving credit facility and $16.2 million of additional available credit, and was in compliance with all debt covenants at quarter-end.
During the quarter, Lakeland completed the divestiture of its High Performance FR and Hi-Vis product lines for approximately $14 million in cash proceeds. Jenkins said the transaction simplified the business, strengthened liquidity and allowed the company to focus resources on fire services and industrial protective products.
Inventory declined to $77.7 million from $82.5 million at the end of fiscal 2026, mainly due to the divestiture. Swinea said inventory reduction may moderate in coming quarters as sales increase and the company builds select fire categories to support demand.
Management reaffirmed its expectation for high single-digit revenue growth and positive cash flow from operations in fiscal 2027. Jenkins said margin improvement should become more visible in the second half of the fiscal year as tenders convert, service revenue grows and operational actions take hold.
About Lakeland Industries (NASDAQ:LAKE)
Lakeland Industries, Inc (NASDAQ:LAKE) is a global provider of high-performance protective apparel and accessories designed to safeguard workers in industrial, healthcare, laboratory, and emergency response environments. The company’s expertise lies in producing garments that shield against chemical, biological, radiological, and thermal risks, supporting safety protocols in sectors such as oil and gas, petrochemicals, pharmaceuticals, and first responders.
The product portfolio encompasses both single-use and reusable solutions, including chemical protective coveralls, flame-resistant garments, arc flash clothing, medical isolation gowns, and cleanroom suits.
