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Shares of Oil-Dri Corporation of America (ODC - Free Report) have underperformed the broader market following the release of its first-quarter fiscal 2026 results. Shares of Oil-Dri have declined 6.7% since reporting results for the first quarter of fiscal 2026. This compares to the S&P 500 index’s 0.1% rise over the same time frame. Over the past month, the stock has declined 12.6% against the S&P 500’s 1.2% growth, reflecting investor caution despite the company delivering one of its strongest quarterly profit results on record.
Earnings & Revenue Performance
For the first quarter ended Oct. 31, 2025, Oil-Dri reported consolidated net sales of $120.5 million, down 6% from $127.9 million in the year-ago period. The revenue decline followed a record-setting quarter last year, resulting in difficult year-over-year comparisons, particularly in certain product categories.
Net income fell 6% to $15.5 million from $16.4 million a year earlier. Diluted earnings per common share were $1.06, down 6% from $1.13 in the prior-year quarter. Income from operations declined 20% to $17 million, while EBITDA decreased 10% to $23.6 million. Despite these declines, management highlighted that the quarter represented the second-highest quarterly gross profit and net income in the company’s history.
Oil-Dri Corporation Of America Price, Consensus and EPS Surprise
Gross profit for the quarter totaled $35.5 million, representing a 13% decrease from the prior year. The gross margin contracted to 29.5% from 31.9% a year earlier, driven by lower sales volumes and a 3% increase in domestic cost of goods sold per ton.
Selling, general and administrative expenses declined 5% year over year to $18.5 million, supported by lower bad debt expenses, reduced corporate bonus accruals and the absence of a foreign value-added tax assessment that weighed on the prior-year quarter. The reduction in SG&A partially offset pressure from lower volumes and higher per-unit costs.
Operating cash flow for the quarter was $10.3 million compared with $10.9 million in the prior year, while cash and cash equivalents ended the quarter at $42.4 million, down from $50.5 million at the end of fiscal 2025.
Segment Performance & Business Drivers
The Business-to-Business Products Group reported net sales of $44.3 million, a 9% decline from last year’s level due to reduced volumes. Segment operating income fell 20% to $13.6 million. Within the segment, fluid purification revenues declined 13% to $26.7 million as demand normalized following elevated renewable diesel filtration activity in the prior year. Animal health revenues from Amlan International dropped 25% year over year to $4.7 million due to lower demand. These declines were partly offset by strong performance in the agricultural business, which posted record quarterly sales of $12.9 million, up 12% year over year, driven by higher demand and pricing for the Verge product line.
The Retail and Wholesale Products Group generated net sales of $76.2 million, down 4% from the prior year, reflecting lower volumes in domestic cat litter and industrial and sports products. Segment operating income declined 7% to $12.4 million, though management noted this result exceeded the prior three quarters and marked the second-highest operating income in the segment’s history.
Domestic cat litter sales, excluding co-packaging, declined 6% year over year, influenced by tough promotional comparisons and increased competitive promotional activity. However, the lightweight cat litter segment continued to outperform the broader category, with sales of Cat’s Pride Antibacterial Clumping Litter increasing 32% year over year.
Management Commentary & Influencing Factors
Management emphasized that the year-over-year declines were largely expected, given the exceptionally strong performance in the prior-year quarter. Chief executive officer Daniel S. Jaffee pointed to continued execution of growth strategies, disciplined investment and strong cash generation as key positives.
Lower volumes in certain categories, higher per-ton costs and normalization of demand in renewable diesel filtration weighed on the results, while cost controls and growth in agricultural and lightweight cat litter products provided partial offsets. The quarter also benefited from a favorable legal settlement, contributing to a $700,000 net other income compared with $1 million in net expenses in the prior year.
Other Developments
Subsequent to the quarter’s end, Oil-Dri’s board of directors approved a 14% increase in the company’s quarterly cash dividend, marking the second dividend increase in calendar year 2025. The new dividend underscores management’s confidence in the company’s financial position and long-term outlook, supported by consistent profitability and cash generation.
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Oil-Dri Q1 Earnings Decline Y/Y Amid Tough Comparison Pressures
Shares of Oil-Dri Corporation of America (ODC - Free Report) have underperformed the broader market following the release of its first-quarter fiscal 2026 results. Shares of Oil-Dri have declined 6.7% since reporting results for the first quarter of fiscal 2026. This compares to the S&P 500 index’s 0.1% rise over the same time frame. Over the past month, the stock has declined 12.6% against the S&P 500’s 1.2% growth, reflecting investor caution despite the company delivering one of its strongest quarterly profit results on record.
Earnings & Revenue Performance
For the first quarter ended Oct. 31, 2025, Oil-Dri reported consolidated net sales of $120.5 million, down 6% from $127.9 million in the year-ago period. The revenue decline followed a record-setting quarter last year, resulting in difficult year-over-year comparisons, particularly in certain product categories.
Net income fell 6% to $15.5 million from $16.4 million a year earlier. Diluted earnings per common share were $1.06, down 6% from $1.13 in the prior-year quarter. Income from operations declined 20% to $17 million, while EBITDA decreased 10% to $23.6 million. Despite these declines, management highlighted that the quarter represented the second-highest quarterly gross profit and net income in the company’s history.
Oil-Dri Corporation Of America Price, Consensus and EPS Surprise
Oil-Dri Corporation Of America price-consensus-eps-surprise-chart | Oil-Dri Corporation Of America Quote
Other Key Business Metrics
Gross profit for the quarter totaled $35.5 million, representing a 13% decrease from the prior year. The gross margin contracted to 29.5% from 31.9% a year earlier, driven by lower sales volumes and a 3% increase in domestic cost of goods sold per ton.
Selling, general and administrative expenses declined 5% year over year to $18.5 million, supported by lower bad debt expenses, reduced corporate bonus accruals and the absence of a foreign value-added tax assessment that weighed on the prior-year quarter. The reduction in SG&A partially offset pressure from lower volumes and higher per-unit costs.
Operating cash flow for the quarter was $10.3 million compared with $10.9 million in the prior year, while cash and cash equivalents ended the quarter at $42.4 million, down from $50.5 million at the end of fiscal 2025.
Segment Performance & Business Drivers
The Business-to-Business Products Group reported net sales of $44.3 million, a 9% decline from last year’s level due to reduced volumes. Segment operating income fell 20% to $13.6 million. Within the segment, fluid purification revenues declined 13% to $26.7 million as demand normalized following elevated renewable diesel filtration activity in the prior year. Animal health revenues from Amlan International dropped 25% year over year to $4.7 million due to lower demand. These declines were partly offset by strong performance in the agricultural business, which posted record quarterly sales of $12.9 million, up 12% year over year, driven by higher demand and pricing for the Verge product line.
The Retail and Wholesale Products Group generated net sales of $76.2 million, down 4% from the prior year, reflecting lower volumes in domestic cat litter and industrial and sports products. Segment operating income declined 7% to $12.4 million, though management noted this result exceeded the prior three quarters and marked the second-highest operating income in the segment’s history.
Domestic cat litter sales, excluding co-packaging, declined 6% year over year, influenced by tough promotional comparisons and increased competitive promotional activity. However, the lightweight cat litter segment continued to outperform the broader category, with sales of Cat’s Pride Antibacterial Clumping Litter increasing 32% year over year.
Management Commentary & Influencing Factors
Management emphasized that the year-over-year declines were largely expected, given the exceptionally strong performance in the prior-year quarter. Chief executive officer Daniel S. Jaffee pointed to continued execution of growth strategies, disciplined investment and strong cash generation as key positives.
Lower volumes in certain categories, higher per-ton costs and normalization of demand in renewable diesel filtration weighed on the results, while cost controls and growth in agricultural and lightweight cat litter products provided partial offsets. The quarter also benefited from a favorable legal settlement, contributing to a $700,000 net other income compared with $1 million in net expenses in the prior year.
Other Developments
Subsequent to the quarter’s end, Oil-Dri’s board of directors approved a 14% increase in the company’s quarterly cash dividend, marking the second dividend increase in calendar year 2025. The new dividend underscores management’s confidence in the company’s financial position and long-term outlook, supported by consistent profitability and cash generation.