Methode Electronics shares fall 5% after Q2 earnings miss

CHICAGO - Methode Electronics, Inc. (NYSE:MEI) saw its shares tumble 5% after reporting a wider-than-expected loss for the second quarter of fiscal 2026, despite revenue exceeding analyst estimates.

The custom-engineered solutions provider reported a net loss of $9.9 million, or $0.28 per share, compared to a loss of $0.25 per share expected by analysts. Revenue came in at $246.9 million, surpassing the consensus estimate of $236.13 million but still representing a 15.6% decline YoY. The company noted that the quarter contained 13 weeks compared to 14 weeks in the same period last year.

"Methode’s transformation journey made further progress in the quarter and is on track," said President and Chief Executive Officer Jon DeGaynor. "I am proud of the unwavering commitment and hard work that the Methode team has put into our transformation."

The company’s adjusted EBITDA margin was 7.1% for the quarter. The Automotive segment was particularly challenged, with sales declining 24.1% to $110.5 million due to the roll-off of legacy programs and lower sales volumes of sensor and user interface products.

Methode reaffirmed its fiscal 2026 guidance, projecting revenue between $900 million and $1 billion, which aligns with the analyst consensus of $946.1 million. The company also maintained its adjusted EBITDA forecast of $70 to $80 million.

"We are reaffirming our fiscal 2026 guidance, driven by strategic operational enhancements - even as we navigate an approximately $100 million decline in annual net sales primarily due to evolving EV market demand," DeGaynor added.

Free cash flow for the first half of fiscal 2026 was positive at $6.4 million, a significant improvement compared to negative $61.1 million in the same period last year.

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