Jewett-Cameron Trading Company Ltd.

Revenue was $8.3 million versus $9.3 million in Q1 2025, down 7%. Gross operating margin was negative 12.5% versus positive 18.3% last year. Net loss was $3.9 million, or $1.12 per basic and diluted share, compared with a net loss of $658,000, or $0.19 per share, in the prior year period. Operating expenses were $2.7 million versus $2.6 million, with wages and employee benefits down to $1.2 million from $1.7 million and SG&A up to $1.4 million from $809,000. Inventory at 11/30/2025 was $13.5 million versus $15.9 million at August, and the inventory allowance increased to $3.05 million from $1.2 million. Management did not provide formal next-quarter or full-year revenue/EPS guidance, but said it expects pricing to normalize as conditions stabilize, margins to improve as tariff-related pricing changes flow through, and annual operating expenses to be reduced by $1 million to $3 million. The company also said the amended NorthRim facility increased maximum borrowing to $6.5 million, with borrowings at $4.2 million as of 11/30/2025.

Chad Summers framed the quarter as difficult but consistent with a broader turnaround plan. He emphasized that metal fencing remains the core business and said the company is seeing encouraging renewed momentum there, while also expanding retail display footprint and improving in-store merchandising. His tone was cautiously optimistic: he repeatedly pointed to actions already underway—pricing alignment, cost reductions, headcount cuts, and monetizing non-core assets—as the foundation for a more sustainable business exiting fiscal 2026.

Mitch Van Domelen focused on the quarter’s financial pressure points: revenue down 7% to $8.3 million, gross margin at negative 12.5%, and a net loss of $3.9 million, or $1.12 per share. He said the biggest margin hit was $2.2 million of inventory write-downs, mostly pet and lumber, and noted that wages and employee benefits fell to $1.2 million from $1.7 million while SG&A rose to $1.4 million due to consultants and warehouse costs. On liquidity, he highlighted the NorthRim amendment, which lifted receivables advances to 90% and increased the borrow limit to $6.5 million, with $4.2 million borrowed at quarter-end.

In Q&A, an analyst asked about the renegotiated pricing agreements, and management said it had successfully secured new pricing to reduce tariff-driven margin erosion, with implementation beginning in 2026. The analyst also asked for inventory mix detail; management declined to give exact numbers but said metal fence is the fastest-moving inventory, pet contains slow-moving stock, and lumber inventory remains elevated but is being worked down through customer discussions and third-party liquidators.