Executive Summary

Q1 2025 delivered solid top-line growth with revenue up 8.0% y/y to $33.2M, but profitability deteriorated as gross margin contracted 60 bps to 26.8% and operating loss widened to $(1.3)M on higher growth investments and tariff/freight headwinds .
Mix was bifurcated: Bath Furniture (+32.7% y/y) and Covered Bridge cabinetry (+135.7% y/y) drove growth, while Sanitaryware (-1.7%) and Shower Systems (-1.3%) declined modestly; U.S. +8.0%, Canada +3.8%, Europe −2.8% .
FY2025 guidance was maintained: revenue $135–145M, adjusted operating income $(2.0)–$1.5M, adjusted net income $(1.9)–$(1.0)M; liquidity stood at $14.3M (cash $1.2M, revolver availability $13.0M) at quarter-end .
Against S&P Global consensus, Q1 revenue modestly beat ($33.21M vs $33.00M est), while SPGI “Primary EPS” came in below (−$0.55 actual vs −$0.05 est); note FGI’s reported diluted EPS was −$0.07 . Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well
- Bath Furniture and Covered Bridge continued outsized growth as program pricing, design wins, expanded geographies and dealer count drove share gains: Bath Furniture +32.7% y/y; Covered Bridge +135.7% y/y .
- Management reiterated confidence in brand/product/channel (BPC) strategy despite a flat industry, highlighting momentum from new product introductions and channel expansion: “strategy is bearing fruit and driving revenue growth well above the overall market” .
- Liquidity remained adequate at $14.3M to fund growth initiatives, with guidance maintained into year despite tariff uncertainty .
What Went Wrong
- Gross margin fell 60 bps y/y to 26.8% due to China-related tariffs and higher freight, pressuring profitability despite revenue growth .
- Operating expenses rose 16.6% y/y to $10.2M on BPC initiatives, Isla Porter, warehouse optimization, and India investments, contributing to an operating loss of $(1.3)M .
- Sanitaryware (−1.7% y/y) and Shower Systems (−1.3%) softened, and Europe contracted (−2.8% y/y), partially offsetting strong cabinet and Bath Furniture lines .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$36.10	$35.59	$33.21
Gross Profit ($USD Millions)	$9.31	$8.74	$8.90
Gross Margin (%)	25.8%	24.6%	26.8%
Operating (Loss) Income ($USD Millions)	$(0.07)	$(1.26)	$(1.28)
Operating Margin (%)	(0.2%)	(3.5%)	(3.9%)
Adjusted Operating Margin (%)	0.2%	(3.2%)	(3.8%)
Net (Loss) Attributable to Shareholders ($USD Millions)	$(0.55)	$(0.40)	$(0.63)
Diluted EPS ($)	$(0.06)	$(0.04)	$(0.07)

Q1 2025 vs Estimates (S&P Global)

Metric	Consensus	Actual	Surprise
Revenue ($USD Millions)	$33.00*	$33.21	+0.6% vs est*
Primary EPS ($)	$(0.05)*	$(0.55)*	Miss vs est*

Values retrieved from S&P Global. Figures marked with an asterisk (*) reflect S&P Global estimates/actuals and may differ from company-reported diluted EPS methodology.

Segment Revenue ($USD Millions)

Segment	Q3 2024	Q4 2024	Q1 2025
Sanitaryware	$21.5	$21.8	$20.2
Bath Furniture	$4.2	$3.5	$4.1
Shower Systems	$7.1	$6.7	$5.7
Other (incl. Kitchen Cabinets)	$3.3	$3.6	$3.3
Total	$36.1	$35.6	$33.2

Key KPIs and Balance Sheet

KPI	Q3 2024	Q4 2024	Q1 2025
Total Liquidity ($USD Millions)	$16.3	$15.6	$14.3
Cash and Equivalents ($USD Millions)	$3.04	$4.56	$1.23
Short-term Loans / Total Debt ($USD Millions)	$12.49	$14.50	$13.17
Total Operating Expenses ($USD Millions)	$9.37	$10.00	$10.18

Non-GAAP (select)

Metric	Q3 2024	Q4 2024	Q1 2025
Adjusted Operating (Loss) Income ($M)	$0.06	$(1.14)	$(1.26)
Adjusted Net (Loss) Income ($M)	$(0.11)	$(0.66)	$(1.07)

Guidance Changes

Metric	Period	Previous Guidance (3/26/25)	Current Guidance (5/13/25)	Change
Total Net Revenue	FY2025	$135–$145M	$135–$145M	Maintained
Adjusted Operating Income	FY2025	$(2.0)–$1.5M	$(2.0)–$1.5M	Maintained
Adjusted Net Income	FY2025	$(1.9)–$(1.0)M	$(1.9)–$(1.0)M	Maintained

Note: Non-GAAP definitions and reconciliation context disclosed by the company; guidance excludes certain non-recurring items and includes minority interest adjustments .

Earnings Call Themes & Trends

Note: FGI holds earnings calls only for Q2 and Q4; there was no Q1 2025 call. “Previous Mentions” reflect Q3 2024 and Q4 2024 commentary.

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Tariffs/Macro	Q4 call: tariff environment “fluid”; pricing/supplier/customer coordination; conservative 2025 outlook embeds tariff impact .	Press release: gross margin pressured by China-related tariffs; ongoing industry uncertainty .	Worsening to Stable (headwind persists)
Supply chain/China+1 sourcing	Q4 call: accelerating diversification beyond China; SAP aiding pricing agility .	Continued supplier/customer coordination to navigate tariffs .	Improving (mitigation efforts)
Product performance	Q3: broad growth; strong Shower Systems; Bath Furniture surge . Q4: Bath Furniture growth with promotional costs; Shower Systems +17% .	Bath Furniture +32.7%; Covered Bridge +135.7%; Sanitaryware and Shower slightly down .	Mixed (cabinets/furniture strong; sanitary/shower softer)
Regional trends	Q3: US +21%, Canada +9%, Europe +39% . Q4: US +14.7%, Canada +9.9%, Europe +23.3% .	US +8.0%, Canada +3.8%, Europe −2.8% .	Softening in Europe
BPC strategy/OpEx investment	Q3/Q4: elevated OpEx for BPC, Canada distribution, kitchen initiatives .	OpEx +16.6% y/y for BPC, Isla Porter, warehouse optimization, India .	Continuing investment (near-term margin drag)
Isla Porter (AI-backed digital sales)	Highlighted in Q3/Q4 as building premium design relationships .	Continues to add relationships via AI-backed platform .	Steady progress
India expansion	Discussed as growth vector .	Investment continues .	Building

Management Commentary

Strategic stance: “FGI’s strategic investments in our brands, products and channels strategy is bearing fruit and driving revenue growth well above the overall market” .
On tariffs and playbook: “The increasing tariff environment in 2025 remains fluid… we experienced a similar tariff process several years ago… confident that we can work through what comes” .
Growth drivers: “Bath Furniture and Covered Bridge… increased 32.7% and 135.7%… Covered Bridge continues to show strong growth due to continued order momentum, expanded geographies and higher dealer count” .
Investment priorities and liquidity: “Operating expenses increased 16.6% y/y to $10.2 million… [for] BPC growth strategy, Isla Porter, one-time costs [warehouse] and India… total available liquidity of $14.3 million… best use of our capital is for internal investment” .
Prior call context on pricing and sourcing: “We generally work closely with customers… adjust price as necessary… our new SAP system… allows flexibility” and “active in diversifying our sourcing… moving some of our sourcing to impact 2025” .

Q&A Highlights

No Q1 2025 call. Context from Q4 2024 Q&A:

Tariff impact and mitigation: Management expects to balance tariff headwinds through supplier support, customer pricing, and timing; diversified sourcing underway .
FY2025 bridge: Guidance assumes tariff pressure, with potential upside if impact moderates; new program wins and market/channel expansion underpin growth outlook .
Pricing mechanics: Preference for price adjustments over explicit surcharges; SAP enables quicker customer-specific adjustments .
Market outlook: R&R expected flat; new programs intended to outpace market despite mixed consumer backdrop .

Estimates Context

Q1 2025 vs S&P Global consensus: Revenue $33.00M est vs $33.21M actual (beat); Primary EPS $(0.05) est vs $(0.55) actual (miss). Coverage is thin (Revenue: 2 estimates; EPS: 1 estimate)*. Values retrieved from S&P Global.
Methodology note: FGI reported diluted EPS of $(0.07) for Q1 2025; SPGI “Primary EPS” may differ from GAAP diluted EPS due to methodology. We anchor estimate comparisons on SPGI metrics while citing company-reported diluted EPS for GAAP comparability .

Key Takeaways for Investors

Revenue resilience amid tariff headwinds, but margin compression and elevated OpEx kept earnings negative; profitability hinges on tariff pass-through, freight normalization, and operating leverage as growth matures .
Growth is concentrated in Bath Furniture and custom cabinetry (Covered Bridge), validating the BPC strategy; sustaining mix toward these categories is key to outgrowing a flat R&R market .
FY2025 guidance held; near-term catalysts include tariff trajectory, China+1 sourcing ramp, and execution of new customer programs .
Liquidity ($14.3M) and revolver capacity provide runway for internal investments; watch working capital and cash conversion given inventory/receivable dynamics and elevated OpEx .
Estimate revisions: modest revenue upward bias possible given Q1 beat; EPS may drift lower on SPGI methodology unless margin recovers—note thin coverage (1–2 estimates)*. Values retrieved from S&P Global.
Stock narrative likely sensitive to tariff clarity and evidence of margin recapture (pricing actions, freight) alongside continued momentum in Bath Furniture and cabinetry .

Citations:

Q1 2025 8-K/press release and financials
Q4 2024 8-K/press release and financials
Q3 2024 8-K/press release and financials
Q4 2024 earnings call transcript (themes/Q&A)

S&P Global estimates:

Q1 2025 Revenue Consensus Mean, Primary EPS Consensus Mean, and # of estimates as shown in the tables above. Values retrieved from S&P Global.*

FGI Industries Ltd. (FGI)·Q1 2025 Earnings Summary