FGI Industries Ltd.

Second quarter 2026 revenue was $31.9 million, up 2.9% year over year. Gross profit was $10.7 million, up 22.5%, and gross margin increased to 33.4% from 28.1% in the prior-year quarter, driven by trade-related recoveries. GAAP operating gain was $1.4 million versus an operating loss of $0.8 million last year; GAAP net income attributable to shareholders was $1.3 million versus a $1.2 million loss, and adjusted net income was $1.2 million versus a $1.2 million loss. Operating expenses fell to $9.3 million from $9.5 million. At quarter-end, total liquidity was $7.9 million. Full-year 2026 guidance was unchanged and excludes trade-related recoveries: revenue of $134 million to $141 million, adjusted operating income of $0.7 million to $2.5 million, and adjusted net income from a loss of $0.3 million to a gain of $1.1 million.

David Bruce said the company delivered another quarter of revenue growth and better operating expense performance while staying disciplined on cost control and investing in its brands, products and channels strategy. He highlighted Sanitaryware and Shower Systems as the strongest businesses and said new customer programs and product launches should support growth in the second half. His tone was constructive but cautious, repeatedly noting mixed market conditions, soft demand, and ongoing tariff/trade uncertainty.

Jae Chung laid out the quarter’s financial improvement: revenue of $31.9 million, gross profit of $10.7 million, gross margin of 33.4%, operating expenses of $9.3 million, and total liquidity of $7.9 million. He said the margin improvement was driven by trade-related recoveries and lower operating costs, including lower selling and distribution costs and warehouse optimization. He also noted the company expects to begin operations at a new warehouse in Texas to support Southern U.S. distribution, and reiterated that 2026 guidance excludes trade-related recoveries.

Analysts focused on tariffs/recoveries, customer discounting, and the visibility behind second-half guidance. Management said most IEEPA-related recoveries are already received or nearly complete, but any refunds will be detailed in the upcoming Q, and they stressed that recoveries are only a partial offset because tariff and other trade-related costs continue and may rise again next year. On demand, management described the market as soft and cautious, with more promotional activity rather than broad discounting, and said the back half should benefit from new customer programs and growth in branded products and the planned Houston distribution center.