Tennant's Q4 results miss estimates on ERP woes

Overview

• Floor-care equipment leader's Q4 revenue and adjusted EPS missed analyst expectations

• ERP system implementation caused disruptions, impacting Q4 performance

• Company repurchased ~$88 mln in shares in 2025, about 6% of outstanding shares

Outlook

• Tennant expects 2026 net sales between $1.24 bln and $1.28 bln

• Company projects 2026 adjusted EPS of $4.70 to $5.30

• Tennant anticipates ERP challenges to continue early in 2026

Result Drivers

• ERP IMPLEMENTATION - Tennant's Q4 performance was adversely affected by ERP system transition, causing production disruptions and impacting sales and costs

• ORDER MANAGEMENT ISSUES - ERP-related constraints led to order-management and fulfillment disruptions

• REGIONAL SALES IMPACT - North America saw a 22.3% decline in Q4 organic sales due to ERP transition and demand softness, partially offset by volume increases in EMEA and APAC

Company press release: ID:nBw2XdxCMa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the industrial machinery & equipment peer group is "buy"

• Wall Street's median 12-month price target for Tennant Co is $111.00, about 34.9% above its February 23 closing price of $82.30

• The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 12 three months ago

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