Miller Industries Q2 2026 Earnings: Revenue Growth Comes With Margin Pressure

Miller Industries (NYSE: MLR) reported Q2 2026 revenue of $240.0 million, up 12.1% from $214.0 million, while diluted EPS fell 13.7% to $0.63 from $0.73. Steady production and sustained order intake lifted sales, but faster growth in operating costs, higher SG&A expenses, and Omars-related non-cash charges prevented that growth from translating into higher earnings.

Core Earnings Data

Revenue increased as Miller Industries matched production with sustained order intake. Management also reported a significant sequential improvement in net income, supported by production efficiencies, although profit remained below the prior-year quarter.

Gross profit rose more slowly than revenue, resulting in a 120-basis-point contraction in gross margin. Net income and diluted EPS both declined by double-digit percentages.

The quarterly improvement did not fully offset the weaker start to the year. For the six months ended June 30, 2026, revenue was $420.9 million, down 4.3%, while net income fell 52.7% to $7.8 million and diluted EPS declined to $0.68 from $1.42.

Higher Production Lifted Sales, but Costs Limited Earnings Conversion

Costs of operations increased 13.7% to $204.1 million, faster than revenue growth, limiting gross profit growth to 3.9%. SG&A expenses also rose 7.6% to $25.2 million, while other income of $479,000 in the prior-year quarter shifted to an expense of $338,000. As a result, pre-tax income declined 11.4% to $10.1 million.

The Omars acquisition also reduced reported earnings. Preliminary non-cash acquisition-related expenses lowered diluted EPS by approximately $0.11, primarily due to fair-value adjustments for equipment and amortization of the estimated value of customer relationships. Miller Industries said most acquisition and integration expenses were recognized during the first two quarters and that Omars’ initial results continued to support management’s expectation that the acquisition will be accretive in its first year.

Cash Generation Reduced Debt While Funding Expansion

Miller Industries said cash generation enabled it to reduce debt by $20 million from the end of Q1, leaving no outstanding balance on its credit facility. Cash and cash equivalents reached $55.6 million at June 30, up from $44.7 million at the end of 2025.

Working-capital balances moved in different directions from year-end. Inventory declined by approximately $26.9 million to $157.3 million, while accounts receivable increased by about $26.7 million to $225.0 million and accounts payable rose by approximately $48.8 million to $127.4 million.

The company returned $4.9 million to shareholders through dividends and repurchases during the quarter, including approximately $2.5 million of share repurchases. The board also approved a quarterly dividend of $0.21 per share, payable September 15, 2026, to shareholders of record on September 8.

Miller Industries is simultaneously proceeding with a planned 200,000-plus-square-foot expansion at its Ooltewah headquarters. The approximately $100 million project remains on schedule, with the majority expected to be funded through operating cash flow over several years. The facility is intended to increase heavy-duty recovery equipment capacity, support European demand, and prepare for military commitments that now exceed $200 million. Military production is scheduled to begin in 2027 and accelerate through 2028 and 2029.

2026 Guidance

Miller Industries reaffirmed its full-year revenue range of $850 million to $900 million and expects EPS to be generally consistent with full-year 2025. Production volumes are expected to remain steady during the second half, while the product mix shifts toward historical levels of bodies and chassis.

The expected full-year gross margin in the mid-13% range is below the 15.0% reported in Q2, meaning the quarterly margin should not be treated as the expected level for the entire year.

Risks Investors Should Watch

• Margin pressure: Costs of operations grew faster than revenue in Q2, and the full-year gross-margin outlook remains below the quarterly level. Product mix and cost control will determine how much future revenue reaches the bottom line.
• Demand and financing conditions: Management described the macroeconomic environment as inconsistent. Elevated interest rates, insurance expenses, tariffs, and customers’ access to financing could affect retail activity and order intake.
• Expansion execution: The Ooltewah project requires approximately $100 million and is expected to rely mainly on operating cash flow. Construction costs, timing, or weaker cash generation could reduce capital-allocation flexibility.
• Omars integration: Initial performance has supported management’s accretion expectations, but realizing that benefit still depends on successful integration and control of remaining acquisition-related expenses.
• Military production timing: Commitments exceed $200 million, but production is not scheduled to begin until 2027. The expected benefit depends on capacity readiness and successful execution of the multiyear ramp.

Summary

Miller Industries delivered double-digit Q2 revenue growth by maintaining steady production against sustained order intake, but higher operating costs, SG&A expenses, and Omars-related charges led to lower margins and earnings. Debt reduction and a higher cash balance strengthened financial flexibility as the company continued shareholder returns and its Ooltewah expansion. The main issues to monitor are whether stable second-half production can support the reaffirmed revenue range and whether margins settle near the guided mid-13% level.