Q.E.P. reports Q1 sales decline amid housing market slowdown

BOCA RATON - Q.E.P. Co., Inc. (OTCQX:QEPC) reported first quarter fiscal 2026 net sales of $61.5 million, down 3.1% from $63.5 million in the same period last year, according to a company press release. The company, currently trading at an attractive P/E ratio of 8.16, is identified as undervalued according to InvestingPro analysis.

The flooring installation solutions provider attributed the sales decline to "ongoing softness in home improvement spending due to elevated interest rates and macroeconomic uncertainty."

Despite lower sales, Q.E.P.’s gross profit increased slightly to $22.7 million, with gross margin improving to 36.9% from 35.4% in the prior year period. The company noted this margin improvement may be temporary, as it resulted from selling through inventory purchased before recent tariff increases. InvestingPro data shows the company maintains strong financial health with a "GOOD" overall rating, supported by robust profitability metrics and solid liquidity with a current ratio of 2.99.

Net income for the quarter ended May 31, 2025, was $4.4 million or $1.36 per diluted share, compared to $4.5 million or $1.34 per diluted share in the first quarter of fiscal 2025.

Operating expenses decreased to $16.9 million from $17.3 million in the prior year period, reflecting lower variable expenses tied to reduced sales volumes.

Cash provided by operating activities was $2.6 million, down from $6.1 million in the comparable period, which the company attributed to a strategic inventory build in anticipation of potential tariff impacts. According to InvestingPro, the company maintains a strong balance sheet with more cash than debt, and subscribers can access 4 additional exclusive ProTips about QEPC’s financial position and market performance.

"Despite persistent economic headwinds, the first quarter results demonstrate the strength and resiliency of our business," said Len Gould, President and Chief Executive Officer, in the statement.

The company also announced the completion of a new adhesive production facility in Dalton, Georgia, which it described as "a major milestone" that will enhance manufacturing capacity.

Q.E.P.’s Board of Directors declared a quarterly cash dividend of $0.20 per share, payable on August 28, 2025, to stockholders of record as of August 1, 2025.

In other recent news, Q.E.P. Co., Inc. has announced a cash dividend of $0.20 per share, which is scheduled for payment on May 28, 2025. Shareholders recorded as of May 1, 2025, will be eligible to receive this dividend. This decision aligns with the company’s strategy to enhance shareholder returns and demonstrates its commitment to providing consistent shareholder value. QEP, known for its diverse portfolio of brands like QEP®, LASH®, and ROBERTS®, distributes its products globally through various retail and specialty channels. Founded in 1979 and based in Boca Raton, Florida, QEP has established itself with a wide range of flooring solutions, including specialty installation tools and adhesives. The company operates additional facilities across the United States, Canada, and Asia. Investors are reminded that forward-looking statements from the company involve risks and uncertainties, such as market conditions and economic factors, which could impact financial performance. QEP has stated that it does not have an obligation to update forward-looking statements except as required by law.

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