Goodfellow Inc. (TSX: GDL) reported net earnings of $2.3 million for the third quarter ended August 31, 2026, a 40% decline from $3.7 million in the same period last year. Consolidated sales rose 2.7% to $145.7 million, driven by stable commercial demand offsetting residential weakness.

The company’s performance reflects mixed conditions in Canada’s lumber and building materials sector. Uncertainty surrounding trade policies weighed on residential construction activity and consumer confidence, while demand remained relatively stable in select commercial, industrial and infrastructure-related markets.

Financial Performance Overview

For the nine months ended August 31, 2026, Goodfellow reported net earnings of $1.2 million or $0.14 per share, compared to $3.9 million or $0.47 per share a year ago. Consolidated sales for the nine-month period were $397.1 million, down from $406.0 million in the prior year.

The following table summarizes the key financial metrics for the three and nine months ended August 31, 2026:

Note: EBITDA calculated as Earnings before income taxes + Depreciation & Amortization + Net financial costs.

Dividend Declaration

The Board of Directors declared an eligible dividend of $0.10 per share, payable on November 3, 2026, to shareholders of record at the close of business on October 20, 2026. This dividend is designated as an eligible dividend under the Income Tax Act (Canada). Future dividends remain at the discretion of the Board.

What the Numbers Show

A divergence between top-line growth and bottom-line contraction characterizes this quarter. While sales increased by $3.8 million year-over-year, cost of goods sold rose by $5.5 million, compressing gross margins. Simultaneously, selling, administrative and general expenses increased by $0.3 million. This combination resulted in a significant drop in earnings before income taxes, which fell from $5.2 million to $3.1 million. The data suggests that volume growth did not translate into profitability due to rising input costs and operating expenses.

Goodfellow Inc. reported a decline in financial performance for the second quarter ended May 31, 2026, with net earnings falling to $2.1 million or $0.25 per share from $2.5 million or $0.29 per share in the prior year. Consolidated sales decreased to $142.7 million compared to $152.9 million last year, impacted by a complex operating environment characterized by macroeconomic uncertainty and softer consumer demand. For the six months ended May 31, 2026, the company reported a net loss of $1.1 million or $(0.13) per share, contrasting with net earnings of $0.2 million or $0.02 per share in the same period last year, while sales dropped to $251.4 million from $264.1 million.

The company attributed the slower start to the building season to disciplined purchasing and inventory management by customers, alongside uneven regional construction activity. Despite these challenges, Goodfellow stated it remains well positioned for future growth through a strong balance sheet and diversified product offering. The financial results for the period were unaudited.

Financial Performance

The company's cost structure saw changes during the quarter, with cost of goods sold decreasing to $114,685,000 from $126,265,000 in the prior year. Selling, administrative and general expenses increased to $23,933,000 from $22,047,000. Net financial costs remained relatively stable at $1,218,000 compared to $1,212,000.

Consolidated Statements of Comprehensive Income (Loss)

Balance Sheet and Cash Flows

Total assets as at May 31, 2026, stood at $351,995,000, an increase from $294,918,000 as at November 30, 2025. Current assets rose to $266,741,000, driven by higher inventories at $165,363,000 and trade receivables at $89,291,000. Current liabilities increased significantly to $127,961,000, primarily due to bank indebtedness of $69,805,000.

Cash flows from operating activities for the six months ended May 31, 2026, were negative at $(44,326,000), compared to $(45,407,000) in the prior year. Financing activities provided net cash of $45,332,000, largely from a net increase in CORRA loans of $48,000,000. Investing activities utilized $2,847,000, mainly for the acquisition of property, plant and equipment.