Myers Reverses Margin Expansion on Resin Spike

The Tip Desk · November 10, 2026 · 3 min read

Gross margin fell to 27.3% as resin costs and mix compressed profit even as net sales rose 8.1% to $171.34 million.

Myers Industries Inc. (MYE), a manufacturer of plastic and metal products, reported net sales of $171.34 million for the quarter ended September 30, 2026, up 8.1% from a year earlier, as a resin-cost spike and unfavorable mix compressed profitability.

President and CEO Aaron Schapper said Focused Transformation initiatives continued to drive commercial excellence across growth platforms, resulting in the year-over-year increase in revenue.

That year-over-year sales increase followed 9.8% growth in the second quarter and 1.8% in the first. Excluding the exit of about $3 million of low-margin products tied to idling two rotational molding facilities in the fourth quarter of 2025, the company said net sales rose 10.4%.

Gross margin reversed two quarters of expansion. It fell to 27.3% from 31.1% a year earlier, a 380 basis-point decline, after a 300 basis-point expansion in the second quarter and a 330 basis-point expansion in the first. Operating income margin fell to 8.7% from 10.5% a year earlier, a 180 basis-point decline, after 520 basis-point expansion in the second quarter and 450 basis-point expansion in the first. Adjusted EBITDA margin declined to 15.5% from 18.3% a year earlier, a 280 basis-point decline, after 350 basis-point expansion in the second quarter and 420 basis-point expansion in the first.

The company attributed the gross-profit and operating-income decline to higher resin costs, unfavorable mix and unplanned maintenance costs, partially offset by higher volume and pricing actions. Operating income was $14.84 million.

GAAP diluted earnings from continuing operations were $0.13 a share, down 23.5% from a year earlier, after 92.3% growth in the second quarter and 94.7% in the first. Adjusted diluted earnings from continuing operations were $0.32 a share, up 3.2% from a year earlier, after 60.6% growth in the second quarter and 57.1% in the first. The company said lower interest expense and tax expense offset the decrease in operating income, and that GAAP earnings also reflected a non-cash extinguishment loss from amending the credit agreement.

Infrastructure sales were $40.81 million, up 38% from a year earlier, after 52% growth in the second quarter and 26% in the first. Food & Beverage sales were $19.30 million, up 12% from a year earlier, after 48% growth in the second quarter and a 12% decline in the first. Industrial sales were $68.41 million, essentially unchanged from a year earlier. Vehicle sales were $22.69 million and Consumer sales were $20.13 million, both essentially unchanged from a year earlier.

Schapper said resin costs have since declined and stabilized from their recent peak, while pricing actions remain in place and continue to support margin recovery. The company said it expects significant sequential margin improvement in the fourth quarter and that the outlook for its end markets remains favorable.

The company completed the sale of Myers Tire Supply, which it said simplifies the portfolio and enables focus on growth platforms. For the full year 2026, the company changed its Vehicle outlook to Down from previously stable, Consumer to Moderate growth from previously stable, and Food & Beverage to Strong growth from previously moderate growth. Industrial remains Moderate growth and Infrastructure remains Strong growth.

Cash flow from operations was $17.4 million and free cash flow was $11.5 million, versus free cash flow of $26.5 million in the second quarter and $23.9 million in the first. Capital expenditures were $5.9 million. Total liquidity was $254.7 million, including $201.2 million of availability under the revolving credit facility and $53.5 million in cash. Net debt as defined by the credit agreement was reduced by $28.5 million, and the net leverage ratio improved to 1.86x from 1.94x in the second quarter.