Oil-Dri Q1 Net Income Dips 5.6% Amidst Sales Decline

Ticker: ODC · Form: 10-Q · Filed: Dec 8, 2025 · CIK: 74046

Sentiment: mixed

Topics: Earnings, Revenue Decline, Net Income Drop, Treasury Stock, Cash Flow, Stock Split, Consumer Goods

Related Tickers: ODC

TL;DR

**ODC's Q1 numbers are soft, but the buybacks show management is trying to prop up the stock; watch for sustained revenue growth next quarter or this dip could get deeper.**

AI Summary

Oil-Dri Corp of America reported a net income of $15.456 million for the three months ended October 31, 2025, a decrease of 5.6% from $16.376 million in the same period last year. Net sales also declined by 5.8% to $120.486 million from $127.945 million. Gross profit decreased to $35.495 million from $40.780 million, while selling, general and administrative expenses saw a slight reduction to $18.541 million from $19.590 million. The company's cash and cash equivalents decreased by $8.074 million, from $50.458 million at the beginning of the period to $42.384 million. Total assets decreased to $380.723 million from $391.677 million, and total liabilities decreased to $114.196 million from $132.617 million. Shareholder equity increased to $266.527 million from $259.060 million, partly due to a net income contribution of $15.456 million and amortization of restricted stock of $1.448 million, offset by $6.960 million in treasury stock purchases and $2.433 million in dividends declared. The company also executed a two-for-one stock split on January 3, 2025, which retroactively adjusted share and per share amounts.

Why It Matters

This performance indicates a challenging quarter for Oil-Dri, with both top-line revenue and net income declining. For investors, the decrease in net income and sales, coupled with significant treasury stock purchases, suggests management is prioritizing shareholder returns through buybacks despite operational headwinds. Employees might face pressure if these trends continue, potentially impacting future growth initiatives. Customers could see pricing adjustments or product changes as the company navigates a tougher market. In a competitive landscape, a decline in sales could signal market share erosion or increased competition from rivals in the sorbent minerals industry, making strategic responses crucial for long-term viability.

Risk Assessment

Risk Level: medium — The company experienced a 5.8% decline in net sales and a 5.6% drop in net income for the quarter ended October 31, 2025, compared to the prior year. This indicates operational challenges. Additionally, cash and cash equivalents decreased by $8.074 million, from $50.458 million to $42.384 million, suggesting a reduction in liquidity, although total liabilities also decreased significantly by $18.421 million.

Analyst Insight

Investors should monitor Oil-Dri's next quarter for signs of revenue stabilization and net income recovery. While treasury stock purchases offer some support, sustained declines in sales and profitability could signal deeper issues. Consider holding existing positions but deferring new investments until a clear turnaround in operational performance is evident.

Financial Highlights

debt To Equity
0.43
revenue
$120.486M
total Assets
$380.723M
total Debt
$39.827M
net Income
$15.456M
eps
$1.14
gross Margin
29.46%
cash Position
$42.384M
revenue Growth
-5.8%

Key Numbers

Key Players & Entities

FAQ

What were Oil-Dri's net sales for the quarter ended October 31, 2025?

Oil-Dri Corporation of America reported net sales of $120.486 million for the three months ended October 31, 2025. This represents a decrease from $127.945 million in the same period of the prior year.

How did Oil-Dri's net income change in the first quarter of fiscal year 2026?

Oil-Dri's net income for the quarter ended October 31, 2025, was $15.456 million, which is a decrease of $0.920 million or 5.6% compared to $16.376 million in the corresponding period of 2024.

What was the impact of the stock split on Oil-Dri's shares?

Oil-Dri's Board of Directors approved a two-for-one stock split, distributed on January 3, 2025. This resulted in an increase of $0.8 million to Common Stock and Class B Stock, with an offsetting decrease in Additional Paid-In-Capital, and proportionate adjustments to outstanding awards.

What were Oil-Dri's cash and cash equivalents at the end of October 2025?

As of October 31, 2025, Oil-Dri's cash and cash equivalents stood at $42.384 million. This is a decrease from $50.458 million at the beginning of the period.

How much did Oil-Dri spend on treasury stock purchases in the quarter?

Oil-Dri spent $6.960 million on purchases of treasury stock during the three months ended October 31, 2025. This is a significant increase from $1.984 million in the same period last year.

What is Oil-Dri's current risk level based on this 10-Q filing?

The risk level for Oil-Dri is assessed as medium. This is due to declining net sales and net income, coupled with a decrease in cash and cash equivalents, indicating operational and liquidity challenges despite a reduction in total liabilities.

What is the strategic outlook for Oil-Dri given the Q1 results?

The strategic outlook for Oil-Dri appears to involve managing declining sales and net income while continuing shareholder returns through dividends and treasury stock purchases. The company will need to address the operational challenges to reverse the downward trend in revenue and profitability.

How do Oil-Dri's current liabilities compare to the previous fiscal year-end?

Oil-Dri's total current liabilities decreased significantly to $50.886 million as of October 31, 2025, from $69.187 million at July 31, 2025. This reduction was primarily driven by a decrease in accrued expenses from $44.864 million to $29.715 million.

What is the basic common earnings per share for Oil-Dri?

Oil-Dri reported basic common earnings per share of $1.14 for the three months ended October 31, 2025. This is a decrease from $1.21 in the same period of the previous year.

What are the main factors contributing to the decrease in Oil-Dri's gross profit?

The decrease in Oil-Dri's gross profit from $40.780 million in Q1 2024 to $35.495 million in Q1 2025 is primarily attributable to the 5.8% decline in net sales, which outpaced the 2.5% reduction in cost of goods sold.

Risk Factors

Industry Context

Oil-Dri Corp of America operates in the specialty minerals and absorbent materials industry. This sector is characterized by a focus on mining, processing, and marketing of various clay-based products for diverse applications, including pet care, agricultural, industrial, and automotive markets. Key industry trends include increasing demand for sustainable and natural products, as well as evolving consumer preferences in pet litter and animal feed additives.

Regulatory Implications

The company is subject to environmental regulations related to its mining and manufacturing operations, which can impact costs and operational flexibility. Compliance with these regulations is crucial to avoid penalties and maintain social license to operate. Additionally, product safety and labeling regulations are relevant for its consumer-facing products.

What Investors Should Do

  1. Monitor raw material cost trends.
  2. Analyze customer concentration risks.
  3. Evaluate the impact of the stock split.
  4. Assess the effectiveness of cost management initiatives.

Key Dates

Glossary

Treasury Stock
Stock that a company has repurchased from the open market. It is no longer outstanding and does not have voting rights. (Oil-Dri Corp of America purchased $6.960 million in treasury stock during the period, reducing cash and impacting equity.)
Amortization
The process of gradually writing off the initial cost of an intangible asset over its useful life. This includes items like patents, trademarks, and customer lists. (The company recorded amortization expenses for its trademarks, trade names, patents, and customer lists, which are reflected in its asset values and net income.)
Additional paid-in capital
The amount of money a company receives from shareholders in exchange for stock, above the stock's par value. (This account increased from $66.138 million to $67.597 million, contributing to the overall increase in stockholders' equity.)
Retained earnings
The cumulative amount of net income that a company has retained over time, rather than distributing it to shareholders as dividends. (Retained earnings increased significantly from $277.500 million to $290.523 million, primarily due to net income earned during the period.)
Operating lease right-of-use assets
An asset recognized under accounting standards for leases, representing the lessee's right to use an underlying asset for the lease term. (These assets decreased from $14.219 million to $13.288 million, reflecting ongoing lease payments.)

Year-Over-Year Comparison

Compared to the prior year's comparable period, Oil-Dri Corp of America reported a 5.8% decrease in net sales to $120.486 million and a 5.6% decline in net income to $15.456 million. Gross profit also fell from $40.780 million to $35.495 million, indicating margin pressures. While total liabilities decreased significantly, cash and cash equivalents saw a reduction of $8.074 million. Stockholders' equity, however, increased due to net income and other adjustments, despite treasury stock purchases.

Filing Stats: 4,662 words · 19 min read · ~16 pages · Grade level 15.8 · Accepted 2025-12-08 16:08:56

Key Financial Figures

Filing Documents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Page

: Financial Statements

Item 1: Financial Statements 3

: Management's Discussion and Analysis of Financial Condition and Results o f Operations

Item 2: Management's Discussion and Analysis of Financial Condition and Results o f Operations 23

: Quantitative and Qualitative Disclosures About Market Risk

Item 3: Quantitative and Qualitative Disclosures About Market Risk 28

: Controls and Procedures

Item 4: Controls and Procedures 28

– OTHER INFORMATION

PART II – OTHER INFORMATION

: Risk Factors

Item 1A: Risk Factors 29

: Unregistered Sales of Equity Securities and Use of Proceeds

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 30

: Mine Safety Disclosures

Item 4: Mine Safety Disclosures 30

: Exhibits

Item 6: Exhibits 31

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS Certain statements in this report, including, but not limited to, under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this report and in other documents that we file with the U.S. Securities and Exchange Commission ("SEC"), may constitute forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Our forward-looking statements include, but are not limited to, statements regarding our or our management team's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking statements are based on management's current expectations, estimates, forecasts, assumptions and projections about future events, our future performance, the future of our business, our plans and strategies, projections, anticipated trends, the economy and other future developments and their potential effects on us. In addition, we, or others on our behalf, may make forward-looking statements in press releases or written statements, or in our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls. Forward-looking statements can be identified by words such as "expect," "endeavor," "outlook," "forecast," "would," "could," "should," "project," "intend," "plan," "continue," "believe," "seek," "estimate," "anticipate," "may," "assume," "potential," "foresee," "predict," "possible," "commit," "design," "strive," and variations of such words and similar references to future periods. Such statements are subject to certain risks, uncertainties and assumptions that could cause actual results to differ mater

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

ITEM 1. Financial Statements OIL-DRI CORPORATION OF AMERICA Condensed Consolidated Balance Sheet (in thousands, except for share and per share amounts, unaudited) ASSETS October 31, 2025 July 31, 2025 Current Assets Cash and cash equivalents $ 42,384 $ 50,458 Accounts receivable, net of allowances of $ 1,293 and $ 1,493 at October 31, 2025 and July 31, 2025, respectively 66,469 69,370 Inventories, net 56,645 51,594 Prepaid expenses and other assets 4,578 5,961 Total Current Assets 170,076 177,383 Other Assets Property, plant and equipment, net 148,680 149,704 Goodwill 16,017 16,017 Trademarks, trade names and patents, net of accumulated amortization of $ 710 and $ 693 at October 31, 2025 and July 31, 2025, respectively 6,595 6,603 Customer list, net of accumulated amortization of $ 9,560 and $ 9,278 at October 31, 2025 and July 31, 2025, respectively 18,625 18,907 Deferred income taxes 854 1,291 Operating lease right-of-use assets 13,288 14,219 Other 6,588 7,553 Total Other Assets 210,647 214,294 Total Assets $ 380,723 $ 391,677 The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. 3 OIL-DRI CORPORATION OF AMERICA Condensed Consolidated Balance Sheet (continued) (in thousands, except for share and per share amounts, unaudited) LIABILITIES & STOCKHOLDERS' EQUITY October 31, 2025 July 31, 2025 Current Liabilities Current maturities of notes payable $ 1,000 $ 1,000 Accounts payable 13,945 16,808 Dividends payable 2,434 2,444 Operating lease liabilities 3,792 4,071 Accrued expenses 29,715 44,864 Total Current Liabilities 50,886 69,187 Noncurrent Liabilities Long-term debt, net of unamortized debt issuance costs of $ 173 and $ 183 at October 31, 2025 and July 31, 2025, respectively 38,827 38,817 Deferred compensation 6,241 5,777 Long-term operating lease liabilities 10,604 11,296 Other 7,638 7,540 Total Noncurrent Liabilities 63,310 63,430 Total Liabilities 114,196 132,617 Co

View Full Filing

View this 10-Q filing on SEC EDGAR

View on Read The Filing