Earnings

Tennant Raises Sales Outlook, Cuts Profit Guidance

The Tip Desk · August 6, 2026 · 4 min read

Second-quarter net sales were $324.0 million as the company lifted full-year sales to $1.270-$1.310 billion and reduced adjusted EBITDA guidance to $155-$170 million.

Tennant Company (TNC) raised its 2026 net sales outlook to $1.270 billion to $1.310 billion and cut adjusted EBITDA guidance to $155 million to $170 million, or a 12.2% to 13.0% margin, after a second quarter in which order growth and robotics sales continued to build even as margin recovery lagged the pace the company had expected.

The floor-care equipment maker reported net sales of $324.0 million for the three months ended June 30, 2026, up 1.7% from a year earlier. That growth rate slowed from 2.7% in the first quarter. Organic sales, which exclude foreign currency and acquisitions, declined 0.5%, a narrower drop than the 1.9% organic decline in the first quarter.

Volume was a 3.5% drag on sales in the second quarter, improving from a 6.1% volume drag in the first quarter. Price contributed 3.0%. The organic decline reflected production and fulfillment constraints in North America and softer demand in certain EMEA and APAC markets.

Americas organic sales grew 1.4%, reversing a 0.7% organic decline in the first quarter. The increase was driven by price realization and continued strength in Latin America, partially offset by lower volumes in North America due to production and fulfillment constraints. EMEA organic sales fell 2.8%, versus a 1.0% decline in the first quarter, on lower equipment volumes in parts of Southern Europe and the Benelux region and softer demand in export markets affected by geopolitical developments in the Middle East. APAC organic sales fell 10.6%, versus a 6.8% decline in the first quarter, on lower equipment volumes across most countries, distributor overstock in certain markets, and partially offsetting price realization and volume growth in India.

Adjusted EBITDA was $35.3 million, or 10.9% of net sales, down 30.8% from $51.0 million a year earlier. The margin was 510 basis points below the year-ago 16.0%. Sequentially, the 10.9% margin was 110 basis points above the 9.8% margin in the first quarter.

Gross profit margin was 39.5%, 260 basis points lower than the year-ago quarter. The decline was driven primarily by ERP-related recovery costs, supply constraints, and elevated freight and tariff-related material costs in North America. In EMEA, margin was pressured by competitive price concessions, volume deleverage, and unfavorable mix, partially offset by price realization and cost management.

Selling and administrative expense was $99.5 million, or 30.7% of sales. Adjusted S&A was 29.1% of sales. Research and development expense was $12.5 million, attributed to continued investment in robotics and autonomous solutions. Adjusted diluted EPS was $0.83, down 44.3% from $1.49 a year earlier. Net income was $7.6 million.

Orders of $339.5 million increased 6.6% year over year, slowing from a 10% year-over-year increase in the first quarter. Backlog built to $127 million. AMR sales were approximately $31 million, up 37% year over year, underscoring progress toward a $250 million AMR revenue target by 2028.

President and Chief Executive Officer Dave Huml said second-quarter results reflected solid demand and order growth, though margin recovery progressed more slowly than expected. He said residual ERP-related inefficiencies in North America and margin pressure in EMEA weighed on profitability more than anticipated.

The company is raising full-year net sales guidance to reflect the order and backlog position and continued robotics momentum, while lowering the adjusted EBITDA range to reflect profitability impacts in the first half and a more measured pace of margin recovery in the second half. Full-year organic net sales growth guidance is 3.5% to 7.0%. Diluted net income per share is guided at $2.15 to $2.80, and adjusted diluted net income per share at $3.80 to $4.45. Capital expenditures are expected at about $25 million.

Operating cash flow was $5.0 million in the second quarter, a $17.5 million decrease from the prior-year period, attributed primarily to lower operating performance and increased working capital requirements, including higher accounts receivable and inventory balances. Cash and cash equivalents were $76.9 million at June 30, 2026. Net leverage was 2.0 times.

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