Myers Industries Q3 2026 Earnings: Revenue Rises as Resin Costs Pressure Margins

Myers Industries (NYSE: MYE) reported Q3 2026 net sales of $171.3 million, up 8.1% from $158.5 million a year earlier, while diluted EPS from continuing operations fell 23.5% to $0.13 from $0.17. Infrastructure and Food & Beverage drove the sales increase, but higher resin costs, unfavorable product mix, and unplanned maintenance reduced margins; lower interest and tax expenses helped adjusted EPS rise modestly.

Core Financial Results

Sales increased 10.4% when excluding approximately $3 million associated with low-margin products Myers exited after idling two rotational molding facilities in Q4 2025. However, volume growth and pricing actions were not enough to offset resin inflation, adverse mix, and maintenance costs at the profit level.

Adjusted operating income and adjusted EBITDA both declined, even as adjusted income from continuing operations increased 5.5%. The divergence reflects benefits from lower interest and tax expenses below the operating-income line.

Discontinued operations recorded a $5.6 million loss, compared with income of $0.8 million a year earlier. As a result, Myers reported an overall net loss of $0.9 million, or $0.02 per diluted share, versus net income of $7.1 million, or $0.19 per diluted share, in Q3 2025.

Business and End-Market Performance

Growth was concentrated in Infrastructure and Food & Beverage. Together, these two end markets offset essentially flat revenue across Industrial, Consumer, and Vehicle.

For full-year 2026, Myers continues to expect moderate growth in Industrial and strong growth in Infrastructure. The company lowered its Vehicle outlook to down from stable, while raising Consumer to moderate growth from stable and Food & Beverage to strong growth from moderate growth. These outlooks exclude the effects of exiting low-margin products and idling two facilities in late 2025.

Revenue Growth Did Not Offset Resin and Mix Pressure

The central issue in the quarter was the gap between sales growth and profitability. Net sales rose 8.1%, but gross profit declined 5.0% because of a spike in resin costs, unfavorable product mix, and unplanned maintenance. Consequently, gross margin contracted to 27.3%, and the adjusted EBITDA margin fell 280 basis points to 15.5%.

Cost control provided a partial offset. SG&A expense declined slightly to $28.4 million from $28.7 million and fell to approximately 16.6% of revenue from 18.1%. Nevertheless, the gross-margin deterioration was large enough to push operating income lower.

Below the operating line, net interest expense fell to $5.2 million from $7.5 million, while tax expense decreased to $1.5 million from $2.9 million. Those reductions allowed adjusted EPS to increase 3.2% despite a 9.9% decline in adjusted operating income. GAAP results also included a $3.5 million non-cash loss on debt extinguishment related to an amended credit agreement.

Cash Flow and Balance Sheet

Quarterly cash conversion weakened. Operating cash flow from continuing operations decreased to $17.4 million, while higher capital expenditures of $5.9 million contributed to free cash flow falling to $11.5 million from $21.8 million.

Myers ended the quarter with $254.7 million in total liquidity, consisting of $53.5 million in cash and $201.2 million available under its revolving credit facility. The quarter also included $23.6 million of proceeds from a business sale. Net debt, as defined under the credit agreement, declined by $28.5 million from Q2, and the net leverage ratio improved to 1.86 times from 1.94 times.

Management Outlook

Management expects significant sequential margin improvement in Q4, though it did not quantify the anticipated recovery. Its outlook is based on resin costs having declined and stabilized from their recent peak, combined with pricing actions that remain in effect.

Following the sale of Myers Tire Supply, the company plans to concentrate resources on its specialty engineered product platforms. Management also emphasized operational productivity and cost discipline as offsets to the inflationary environment.

Risks Investors Should Monitor

• Resin cost volatility: Another increase in resin prices, or a delay between cost changes and customer pricing, could continue to pressure gross margin.
• Product mix and operating costs: Unfavorable mix and unplanned maintenance reduced profitability despite higher sales. Continued pressure in either area could limit the expected Q4 margin recovery.
• Uneven end-market demand: Q3 growth came from only two end markets, while Industrial, Consumer, and Vehicle were flat. The revised outlook for declining Vehicle demand adds another source of uncertainty.
• Weaker quarterly cash conversion: Free cash flow fell nearly 47% year over year. Sustaining debt reduction will require stronger cash generation alongside the anticipated margin improvement.

Summary

Myers Industries delivered higher Q3 2026 revenue, led by Infrastructure and Food & Beverage, but resin inflation, adverse mix, and maintenance costs caused a substantial margin contraction. Lower interest and tax expenses supported adjusted EPS, while cash flow weakened but leverage improved. The main items to watch are whether resin stabilization and pricing produce the expected Q4 margin recovery, whether growth broadens beyond two end markets, and how the weaker Vehicle outlook affects demand.