Myers Industries (MYE) Q3 2026 earnings review
Myers Industries grows sales 8%, but plastic costs squeeze profit
Myers Industries, a maker of plastic containers and industrial ground mats, grew sales while rising plastic costs squeezed its profit margins. Revenue rose 8%, or 10% excluding products dropped when it closed two factories last year, led by Infrastructure matting and Food and Beverage containers. However, gross margin fell nearly 4 percentage points from a year ago to 27% because of a plastic resin cost jump, product mix, and unplanned factory repairs. Chief executive Aaron Schapper expects a strong margin rebound in the fourth quarter now that resin prices have stabilized.
| Sales excluding exited low-margin products | +10.4% from a year ago (reported sales +8.1%) |
|---|---|
| Gross margin | 27.3% -3.8 percentage points from a year ago (34.3% in Q2) |
| Profit per share, excluding one-offs | $0.32 +3.2% from a year ago |
| End-market full-year outlook | Mixed 2 markets raised, 1 cut, 2 unchanged |
⚖️ Verdict: 🔴 Bearish
The story got worse because the margin expansion and cash generation that carried the first half of the year both reversed in the third quarter. Gross margin dropped 7 percentage points from the second quarter, and free cash flow fell nearly in half from a year ago as earlier unpaid supplier bills started coming due. On the positive side, the company finished selling its Myers Tire Supply unit for $24 million and cut net debt to 1.86 times EBITDA, lowering interest costs.
The question now is whether the third-quarter margin drop was a brief delay before customer price increases take effect or a return to weaker profitability as World Cup stadium mat orders fade. If pricing and lower resin costs restore margins, fourth-quarter gross margin will rebound toward the low-30% range; if project mix was the real driver, margins will stay depressed. Fourth-quarter gross margin and Infrastructure sales will settle it.
🐂 Bull Case
Tire Supply Sale Cut Debt and Interest Costs
Myers Industries makes plastic and metal containers, storage bins, and heavy-duty ground mats. To focus on those manufactured goods, the company finished selling Myers Tire Supply, its tire repair distribution unit, during the third quarter. The sale brought in $23.6 million of cash and resolved a standing question over when the deal would close.
- Net debt reduction: $28.5 million from last quarter
- Net debt to EBITDA ratio: 1.86x, down from 1.94x in Q2 and 2.6x a year ago
- Net interest expense: $5.2 million, down 30.7% from a year ago
The company also refinanced its credit facility in July, taking a $3.5 million non-cash accounting charge. Because debt is lower, smaller interest bills and a lower tax rate offset the drop in operating profit, so profit per share excluding one-offs rose 3.2% to $0.32.
What to watch: fourth-quarter net interest expense. Another sequential drop will confirm that the July refinancing and the $28.5 million debt paydown permanently lowered quarterly financing costs.
Agricultural Demand Lifted Food and Beverage
The Food and Beverage division makes Buckhorn seed boxes and large bulk containers for farming and chemical customers. Sales in this market rose 11.5% from a year ago to $19.3 million. Chief executive Aaron Schapper raised the full-year outlook for the division from moderate growth to strong growth, showing that second-quarter seed box demand was not just a one-time pull-forward.
Across the whole business, sales from product lines the company kept rose 10.4%, after stripping out about $3 million of low-margin products dropped when it idled two rotational molding plants late last year. Overhead and selling costs also fell by 1.5 percentage points of revenue to 16.6%, keeping the restructuring savings intact.
What to watch: fourth-quarter Food and Beverage sales against last year's $23.2 million fourth-quarter peak. Growth over that high base will show agricultural container demand is holding into 2027.
Positives this quarter didn't test
One standing growth driver could not be measured from the third-quarter earnings release alone.
- Military ammunition packaging: the company targets 10% to 15% yearly sales growth through 2028 from a $49 million base in 2025, helped by new production in Poland, but the release combines military containers inside the broader Industrial division (flat at $68.4 million); the conference call or annual report will show whether military sales grew while general industrial parts shrank.
🐻 Bear Case
Resin Spike and Plant Repairs Cut Margin
Myers Industries melts plastic resin to mold its containers and ground mats, and its contracts pass resin cost increases on to customers only after a delay. In the third quarter, chief executive Aaron Schapper said "a significant spike in resin cost and unfavorable product mix pressured gross margins in the quarter", while the release also cited "unplanned maintenance costs" at its factories.
- Gross margin: 27.3%, down 3.8 percentage points from a year ago and down 7.0 points from Q2
- Cost of making the products: 72.7% of sales, up 3.8 percentage points from a year ago
- Operating margin excluding one-offs: 10.4%, down 2.1 percentage points from a year ago
Schapper added that "Resin costs have since declined and stabilized from their recent peak, while our pricing actions remain in place and continue to support margin recovery." That framing rests on temporary material costs, but an 8.1% sales increase still produced a 9.9% drop in operating profit excluding one-offs, wiping out the margin gains from earlier in the year.
What to watch: fourth-quarter gross margin. Schapper said "We expect significant sequential margin improvement in the fourth quarter", so a return above 31% is needed to show pricing caught up and plant repairs are over.
Infrastructure Growth Slowed From Last Quarter
The Infrastructure division sells Signature Systems composite ground mats, which utility crews, construction sites, and stadiums lay down to protect turf and support heavy trucks. Bulls view composite mats replacing wooden mats as a multi-year growth driver, while bears warned that second-quarter sales of $48.6 million were inflated by temporary World Cup stadium orders.
In the third quarter, Infrastructure revenue rose 37.6% from a year ago to $40.8 million, keeping it the fastest-growing part of the business. However, sales dropped 16.0% from the second quarter. Because Infrastructure carries higher margins than the company average, its drop from 27.1% of total sales in the second quarter to 23.8% in the third quarter also hurt the company's overall product mix.
What to watch: fourth-quarter Infrastructure revenue against last year's $35.1 million fourth quarter. A second sequential drop would show the order backlog is normalizing toward slower growth.
Payables Reversal Cut Free Cash Flow in Half
In the first half of 2026, free cash flow jumped because the plastics maker stretched out its unpaid bills to suppliers, with accounts payable rising by $24.9 million between December and June. That raised the risk that cash generation would drop once those bills came due in the second half of the year.
That reversal began in the third quarter. Accounts payable fell by $5.6 million from June to $70.6 million, and total working capital used $2.8 million of cash compared with providing $5.6 million a year ago. As a result, operating cash flow from continuing operations fell 33.0% to $17.4 million, and free cash flow fell 47.4% to $11.5 million.
What to watch: fourth-quarter accounts payable and free cash flow. If payables fall back toward last December's $51.3 million level, fourth-quarter cash generation will stay weak even if profit margins recover.
Vehicle and Industrial Demand Stayed Flat
Outside of ground mats and agricultural boxes, the remaining three-quarters of Myers Industries stood still. Industrial sales (39% of revenue), Vehicle sales for recreational vehicles, boats, and cars (13%), and Consumer fuel can sales (12%) each printed 0% growth from a year ago. The company also cut its full-year Vehicle outlook from stable to down, and added $0.5 million to its environmental cleanup reserves.
What to watch: fourth-quarter Industrial revenue, once the $3 million quarterly drag from closed rotational molding plants is lapped. Flat Industrial sales in the fourth quarter would show core factory demand is stalling.
💲 Other KPIs
Spending on factories and equipment rose to $5.9 million, or 3.5% of sales, up from $4.2 million (2.6% of sales) a year ago. Over the first nine months of 2026, capital spending totaled $14.3 million, or 2.8% of sales, stepping up in the third quarter toward the company's full-year target of 3.5% of revenue.
Diluted shares rose 0.9% from a year ago to 37.9 million from stock-based employee compensation. The Akron manufacturer bought back no stock in the third quarter or the first nine months of 2026, compared with $0.5 million in the third quarter of 2025, directing cash toward debt paydown and its $5.1 million quarterly dividend instead.
🔮 Guidance
Unchanged. Management still expects moderate full-year growth for its largest market (39% of trailing sales), excluding the roughly $3 million quarterly drag from low-margin products exited in late 2025. Third-quarter reported sales were flat at $68.4 million after falling 2.6% in the first quarter and rising 1.5% in the second.
Unchanged. The plan continues to call for strong full-year growth in Signature Systems ground matting (24% of trailing sales). With revenue up 26% in the first quarter, 52% in the second, and 38% in the third, the division is already well ahead of last year entering the fourth quarter.
Cut. Myers lowered its full-year forecast for RV, marine, and automotive components (13% of trailing sales) from stable to down, excluding exited products. After sales fell 14% in the first quarter and 19% in the second, flat third-quarter revenue of $22.7 million was not enough to bring the full year back to even.
Raised. The outlook for Scepter fuel cans and outdoor products (12% of trailing sales) moved up from stable to moderate growth, assuming normal storm activity and excluding exited low-margin lines. Reported Consumer sales were flat in the third quarter at $20.1 million.
Raised. This is the second straight upgrade for agricultural and bulk containers (12% of trailing sales), which started the year forecast as slightly down and moved to moderate growth last quarter. Third-quarter sales grew 12% to $19.3 million following 48% growth in the second quarter.
❓ Key Questions
How much did military ammunition packaging grow in Q3?
The company targets 10% to 15% yearly growth in military packaging through 2028, backed by new production in Poland. Because military sales sit inside the Industrial division, which was flat at $68.4 million, investors need the standalone military figure to check progress.
How large were the unplanned factory maintenance costs?
Gross margin fell 7 percentage points from the second quarter to 27.3%, which the release blamed on resin costs, product mix, and unplanned maintenance. Separating one-time repair bills from the resin lag shows how much margin will bounce back automatically in Q4.
Where does the Signature Systems matting backlog stand today?
Infrastructure sales fell 16% from the second quarter to $40.8 million after World Cup stadium orders rolled off. A dollar backlog figure or order growth rate for composite mats would show whether utility and data-center demand is re-accelerating into 2027.
When will management bring back numbered financial targets?
Management suspended numbered annual profit and revenue targets in late 2024 on a temporary basis, promising to bring them back as soon as possible. With the Myers Tire Supply sale now finished, the company has a simpler portfolio to forecast.