Compass Minerals Fiscal Q3 2026 Earnings: Salt Costs Weigh on Margins
Compass Minerals (NYSE: CMP) reported fiscal 2026 third-quarter revenue of $215.3 million, compared with $214.6 million a year earlier, while diluted EPS improved to a loss of $0.13 from a loss of $0.41. The GAAP net loss narrowed to $5.7 million, but operating income and adjusted EBITDA declined as higher costs in Salt outweighed improved Plant Nutrition profitability. The quarter ended June 30, 2026.
Core earnings data
Revenue was nearly unchanged year over year, but operating margin fell to 5.1% from 7.4%. The consolidated profitability decline reflected weaker Salt results, which more than offset higher operating income and adjusted EBITDA in Plant Nutrition.
| Metric | Fiscal Q3 2026 | Fiscal Q3 2025 | Year-over-year change |
|---|---|---|---|
| Revenue | $215.3 million | $214.6 million | Approximately +0.3% |
| GAAP operating income | $10.9 million | $15.9 million | Approximately -31% |
| GAAP operating margin | 5.1% | 7.4% | -2.3 percentage points |
| GAAP net loss | $(5.7) million | $(17.0) million | Loss narrowed by $11.3 million |
| Diluted EPS | $(0.13) | $(0.41) | Improved by $0.28 |
| Adjusted net loss | $(5.8) million | $(15.8) million | Loss narrowed by $10.0 million |
| Adjusted diluted EPS | $(0.14) | $(0.39) | Improved by $0.25 |
| Adjusted EBITDA | $39.9 million | $41.0 million | Approximately -2.7% |
Plant Nutrition gains did not offset Salt cost pressure
Salt revenue increased 5% as a 9% rise in combined average selling prices offset a 4% decline in total volume. However, lower volume and higher per-unit product and distribution costs reduced Salt operating income by 25% and adjusted EBITDA by 15%.
Plant Nutrition revenue declined 16% as reported sales volume fell 19%, largely because Compass Minerals sold the Wynyard sulfate of potash business in March 2026; excluding the divestiture, volume increased approximately 4%. Higher prices and lower per-unit product and distribution costs helped Plant Nutrition operating income rise 50% and adjusted EBITDA increase 32%.
| Segment metric | Fiscal Q3 2026 | Year-over-year change |
|---|---|---|
| Salt revenue | $173.9 million | +5% |
| Salt operating income | $21.2 million | -25% |
| Salt adjusted EBITDA | $38.9 million | -15% |
| Plant Nutrition revenue | $37.6 million | -16% |
| Plant Nutrition operating income | $7.8 million | +50% |
| Plant Nutrition adjusted EBITDA | $15.0 million | +32% |
The segment split shows why consolidated adjusted EBITDA declined despite the improvement in Plant Nutrition: Salt remained the much larger source of revenue and segment earnings.
Cash flow and balance sheet
For the first nine months of fiscal 2026, rather than the third quarter alone, operating cash flow was $162.8 million versus $204.6 million a year earlier. The company linked working-capital movements to the seasonal reduction in inventory after winter and the settlement of an Ontario tax dispute. Capital spending increased to $62.1 million from $53.8 million, while the Wynyard sale generated $23.3 million of net cash proceeds.
Financing activities used $127.1 million during the nine-month period, primarily reflecting the redemption of the remaining $150.0 million of 6.75% senior notes due in 2027, partly offset by $35.0 million of net revolving-credit borrowings.
Compass Minerals ended June with $328.1 million of liquidity, including $56.3 million of cash and $271.8 million available under its revolving credit facility. Total debt fell to $716.6 million from $825.3 million a year earlier, while net debt declined to $660.3 million from $745.9 million. The company’s net leverage ratio improved to 2.8 times from 4.3 times.
S&P Global Ratings upgraded the corporate credit rating to B+ from B with a stable outlook. S&P cited debt reduction and improved profitability, with its separately calculated adjusted leverage declining to 3.1 times from 4.2 times.
Fiscal 2026 guidance
Compass Minerals raised the midpoint of full-year adjusted EBITDA guidance to $230 million, with a current range of $218 million to $242 million. Stronger Plant Nutrition expectations supported the increase, while the Salt outlook was adjusted for mix, inflation and slower-than-planned operational improvements.
| Metric | Previous guidance | Current guidance | Update |
|---|---|---|---|
| Salt highway volume | 8,450–8,800 thousand tons | 8,600–8,800 thousand tons | Lower end raised |
| Total Salt volume | 10,350–10,800 thousand tons | 10,500–10,800 thousand tons | Lower end raised |
| Salt revenue | $1,025–$1,080 million | $1,053–$1,090 million | Range raised |
| Salt adjusted EBITDA | $225–$240 million | $225–$236 million | Upper end reduced |
| Plant Nutrition volume | 280–300 thousand tons | 290–300 thousand tons | Lower end raised |
| Plant Nutrition revenue | $190–$210 million | $200–$209 million | Range narrowed and lower end raised |
| Plant Nutrition adjusted EBITDA | $43–$47 million | $49–$57 million | Range raised |
| Effective tax rate | 30%–34% | 27%–31% | Range reduced |
Corporate and Other adjusted EBITDA guidance remained unchanged at a loss of $51 million to $56 million. Full-year capital expenditures are projected at $90 million to $110 million, while net interest expense guidance remains $62 million to $67 million.
Management described the 2026–27 highway deicing bid season as constructive, citing substantial year-over-year price improvement in core U.S. markets and consistent growth in demand tenders. At the same time, it acknowledged that mining production costs have not improved as quickly as planned because maintenance, labor and related costs remain elevated.
Risks investors should monitor
- Salt cost execution: Higher per-unit product and distribution costs compressed Salt earnings despite better pricing. The pace of improvement at mining operations remains slower than management expected.
- Weather, volume and mix: Highway salt volume declined 6% during the quarter. Deicing demand and product mix remain sensitive to winter conditions even as the upcoming bid season shows favorable pricing and tender trends.
- Cash flow and leverage: Nine-month operating cash flow declined while capital spending increased. Net debt and leverage have improved materially, but net debt remains $660.3 million and full-year net interest expense is expected to be $62 million to $67 million.
- Plant Nutrition earnings sustainability: The Wynyard sale reduced reported revenue and volume, making retained-business volume trends important. This quarter’s profit improvement also depended on higher pricing and lower per-unit costs.
Summary
Compass Minerals’ fiscal third quarter combined nearly flat revenue and a narrower net loss with weaker operating margins. Plant Nutrition delivered better pricing, lower unit costs and higher segment earnings, but those gains did not fully offset Salt’s volume and cost pressures. The raised full-year adjusted EBITDA midpoint and lower leverage are constructive developments, while Salt mining costs, winter demand, Plant Nutrition’s retained-business performance and cash generation remain the main areas to monitor.
This article may include AI-generated content that is human-reviewed, which is for reference and general information purposes only and does not constitute investment advice.
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