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FGI Industries Ltd. (FGI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $35.85M (-0.7% y/y), gross margin expanded to 26.5% (+70 bps y/y), and operating income turned positive to $0.37M, but GAAP net loss widened to $1.65M (GAAP diluted EPS of -$0.86) .
  • Results missed Wall Street consensus: revenue $35.85M vs $37.70M* and Primary EPS $0.13* vs $0.59*; adjusted net income was $0.24M and adjusted diluted EPS $0.13 .
  • Guidance was maintained: FY25 revenue $135–$145M; adjusted operating income $(2.0)–$1.5M; adjusted net income $(1.9)–$1.0M .
  • Liquidity stood at $14.2M (cash $1.9M, total debt $14.1M, $12.3M revolver availability); company will only hold earnings calls for Q2 and Q4 going forward .
    Values retrieved from S&P Global*.

What Went Well and What Went Wrong

What Went Well

  • Gross margin expanded to 26.5% (+70 bps y/y) as management navigated a fluid tariff environment and pricing actions with customers and suppliers .
  • Positive operating income of $0.37M vs operating loss of $0.07M in Q3’24, aided by lower selling, distribution, and R&D costs .
  • CEO highlighted strategic progress across Brands, Products, and Channels; sanitaryware revenue grew 7% y/y, and international expansion (Europe +7.3% y/y; India dealer adds) continued .
    “FGI’s strategic investments in our Brands, Products and Channels strategy is bearing fruit and becoming a positive driver of revenue growth” — Dave Bruce, CEO .

What Went Wrong

  • GAAP net loss widened to $1.65M (EPS -$0.86) vs $0.55M loss last year (EPS -$0.29), with higher deferred tax expense impacting the quarter .
  • Canada revenue declined 8% y/y; Bath Furniture (-10.8% y/y) and Shower Systems (-17.8% y/y) were weak, offsetting sanitaryware growth .
  • The tariff backdrop remained a headwind with customers pausing decision-making, and freight costs were cited as higher; CFO noted discipline in OpEx but overall expenses remained sizable at $9.13M .

Financial Results

Consolidated Performance (y/y, q/q, and sequential trend)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD)$36,099,179 $33,212,548 $30,998,260 $35,848,861
Gross Profit ($USD)$9,308,222 $8,900,258 $8,706,607 $9,498,668
Gross Margin %—26.8% 28.1% 26.5%
Operating Income ($USD)$(65,826) $(1,280,859) $(832,338) $369,723
Operating Margin %(0.2%) (3.9%) (2.7%) 1.0%
GAAP Diluted EPS ($)$(0.29) $(0.07) $(0.64) $(0.86)

Adjusted Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Adjusted Operating Income ($USD)$55,663 $(1,260,953) $(832,338) $369,723
Adjusted Operating Margin %0.2% (3.8%) (2.7%) 1.0%
Adjusted Net Income ($USD)$(105,451) $(1,072,383) $(1,161,873) $240,591
Adjusted Diluted EPS ($)$(0.06) $(0.11) $(0.61) $0.13

Segment & Geography Mix

Segment Revenue ($USD)Q1 2025Q2 2025Q3 2025
Sanitaryware$20.2M $18.1M $22.9M
Bath Furniture$4.1M $4.1M $3.7M
Shower Systems$5.7M $5.2M $5.9M
Other (Primarily Kitchen Cabinets)$3.3M $3.5M $3.3M
Geography Growth (y/y)Q3 2025
U.S.+1.3%
Europe+7.3%
Canada(8.0%)

KPIs & Balance Sheet

KPIQ1 2025Q2 2025Q3 2025
Cash & Equivalents ($USD)$1.23M $2.52M $1.88M
Total Debt ($USD)$13.17M $12.56M $14.08M
Revolver Availability ($USD)$13.0M $13.9M $12.3M
Total Liquidity ($USD)$14.3M $16.4M $14.2M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Net Revenue ($USD)FY 2025$135–$145M $135–$145M Maintained
Adjusted Operating Income ($USD)FY 2025$(2.0)–$1.5M $(2.0)–$1.5M Maintained
Adjusted Net Income ($USD)FY 2025$(1.9)–$1.0M $(1.9)–$1.0M Maintained

Note: Company will only host earnings calls for Q2 and Q4 going forward; results for other quarters will be released via press and SEC filings .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025 and Q1 2025)Current Period (Q3 2025)Trend
Tariffs/MacroCustomers paused orders in early Q2 amid large proposed tariffs; uncertainty persisted with reprieves and fluid negotiations . Q1 noted tariff-driven margin pressure .Tariffs remain fluid; pricing actions with customers/suppliers; confidence in navigating as in 2018 .Caution persists, pipeline recovering
Supply Chain / China+1Active diversification across all product categories; global sourcing footprint to look “completely different” next year .Continuing to evaluate China+1 to diversify/broaden sourcing .Execution progressing
Gross Margin TrajectoryQ2: upper-20s gross margin target reiterated despite tariff headwinds . Q1: margin down 60 bps y/y .Gross margin 26.5% (+70 bps y/y) .Stabilizing/improving
Product PerformanceQ2 growth in Sanitaryware, Bath Furniture, Covered Bridge; Shower Systems down . Q1 growth in Bath Furniture & Covered Bridge; Sanitaryware/Shower down .Sanitaryware +7% y/y; Bath Furniture and Shower down y/y; Other flat .Mixed: Sanitaryware strength; other categories mixed
Regional TrendsQ2: U.S. down slightly; Canada +2.0%; Europe +36.7% (note call text includes a likely misstatement; press release shows the formal figures). Q1: U.S. +8%, Canada +3.8%, Europe -2.8% .U.S. +1.3%, Europe +7.3%, Canada -8.0% .Moderating growth; Canada weaker
Digital/AI InitiativesIsla Porter uses an AI-backed digital sales platform (Q1/Q2) .Isla Porter continues relationships with premium design community .Ongoing build-out
OpEx DisciplineQ2: OpEx up slightly due to growth investments; warehouse optimization . Q1: OpEx up due to BPC, Isla Porter, India .OpEx down 2.6% y/y to $9.13M .Improved cost control

Management Commentary

  • “The increasing tariff environment in 2025 remains fluid with signs of clarity developing… we are confident that we can navigate through what comes given the close relationships we have cultivated… The order pipeline is recovering” — Dave Bruce, CEO .
  • “FGI continues to invest in long-term growth with discipline in overall operating expenses, which decreased 2.6% y/y to $9.1M. FGI ended the third quarter with total available liquidity of $14.2M.” — Jae Chung, CFO .
  • “Sanitaryware revenue grew 7.0%… Bath Furniture, Shower Systems and Other revenue declined 10.8%, 17.8% and 0.7% y/y” — Dave Bruce .
  • “Going forward, FGI will hold quarterly earnings calls only for the second and fourth quarters” — Company statement .

Q&A Highlights

(No Q3 call; highlights from Q2 call as context)

  • Tariff impact: Customers paused orders amid large proposed tariffs; subsequent reductions improved pipeline; uncertainty remains with reprieves .
  • China+1: Diversification across all segments; a “completely different” global sourcing footprint expected next year .
  • Margins: Management targeted upper-20s gross margin in back half as new programs roll out despite tariffs .
  • OpEx: Diligent expense control, cutting where possible without sacrificing growth .
  • Guidance: Back half rebound implied within maintained FY25 guidance .

Estimates Context

MetricPeriodConsensusActual
Revenue ($USD)Q3 2025$37,695,000*$35,848,861
Primary EPS ($)Q3 2025$0.59*$0.125*
Revenue ($USD)FY 2025$135,477,500*—
Primary EPS ($)FY 2025$(0.25)*—
  • Q3 revenue missed consensus by ~$1.85M (~4.9%); Primary EPS missed by ~$0.46, though adjusted diluted EPS printed $0.13 .
  • Guidance maintained aligns broadly with FY revenue consensus midpoint; but EPS consensus suggests continued losses on a GAAP/Primary basis*.
    Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Near-term: Results were a clear miss vs consensus on revenue and EPS; watch tariff headlines and any customer order cadence normalization through Q4 as a trading catalyst .
  • Margin trajectory: Gross margin stabilized in mid-20s; operating margin turned positive; continued product/program rollouts are the lever to sustain improvement .
  • Mix matters: Sanitaryware strength offset declines in Bath Furniture/Shower; Canada softness bears monitoring; execution on global sourcing/China+1 could mitigate tariff risk .
  • Liquidity: $14.2M liquidity supports ongoing growth investments; OpEx discipline evident in Q3 with 2.6% y/y decline .
  • Guidance: Maintained FY25 ranges suggest confidence in pipeline recovery; any change (raise/cut) would be a stock driver at Q4 call .
  • Non-GAAP framing: Adjusted EPS positive ($0.13) despite GAAP loss; reconcile narrative carefully in models (tax/deferred items impacted GAAP) .
  • Communications cadence: No Q3 call; next live color comes at Q4; monitor press releases and 10-Qs for updates .

Appendix: Additional Data Points

  • Liquidity detail (Q3): Cash $1.88M; total debt $14.08M; availability $12.3M; total liquidity $14.2M .
  • Share count reflects 1-for-5 reverse split effective July 31, 2025 (retroactive effect applied) .