Oil-Dri Corporation of America

Third-quarter net sales were $126 million, up 9% year over year. Income from operations increased 23% versus the prior-year quarter, and net cash provided by operating activities was $25 million. Gross margin was unfavorably impacted by 190 basis points year over year, and domestic cost per ton of goods sold rose 6% due to purchased materials, labor, packaging and transportation costs. Looking ahead, management did not provide formal quarterly or full-year financial guidance on the call, but said second-half year-over-year momentum was improving, cat litter demand remained strong, Amlan was growing, and fluid purification demand should stay healthy over the next 12 to 18 months.

Dan Jaffee emphasized that the company’s recent capital investment cycle is intended to protect service and quality, even if it pressures margins in the near term. He highlighted a 99.9% fill rate, strong customer recognition, and the company’s ability to navigate Winter Storm Fern because of improved facilities. His tone was confident and long-term oriented, stressing that Oil-Dri is focused on cash generation, reserves, and expanding value from its minerals rather than chasing tonnage.

Susan Kreh said the quarter benefited from stronger second-half momentum, with net sales of $126 million up 9% and operating income up 23% year over year. She pointed to $25 million of operating cash flow as evidence that earnings are converting into cash, while also noting gross margin pressure of 190 basis points and a 6% increase in domestic cost per ton from materials, labor, packaging, and transportation. She also cited the board-approved dividend increase to $0.225 per share, payable August 21, 2026, which she said reflects confidence in the sustainability of cash flow.

Analysts asked about the drivers of elevated cat litter demand, and management said it reflected stronger category demand, Winter Storm Fern-related order timing, and gains in crystal, lightweight, coarse, branded, and private-label products. Questions on Amlan focused on whether new accounts can become repeat customers and the 12- to 18-month outlook; management said it has regained a foothold at a lost key account, added customers across world areas, and sees a strong outlook supported by vertical integration and differentiated value. Analysts also asked about Middle East conflict effects, SAF demand, shipping costs from China, and competitive pressure in cat litter; management said jet fuel and SAF-related demand is helping fluid purification, inbound ocean freight was not meaningfully hit in the quarter, and cat litter remains highly promotional with price and trade-spend pressure.