Ennis Climbs After Q3 Profit Beat, Strong Margin Growth
The print products supplier's stock rose after it posted higher profitability and integrated a new acquisition, offsetting a slight miss on quarterly revenue.
Shares of Ennis, Inc. (NYSE: EBF) gained in morning trading after the company posted third-quarter earnings that surpassed analyst expectations, driven by a significant expansion in profitability and contributions from a recent acquisition.
The stock rose more than 1% to $18.26 after the Midlothian, Texas-based manufacturer of print and business products reported earnings of $0.42 per diluted share, narrowly beating the consensus estimate of $0.41. The positive investor sentiment came despite quarterly revenue of $100.2 million that landed just shy of the $100.5 million analysts had forecast.
The market's focus-and the core of the bullish signal for investors-was the company's impressive operational efficiency. Ennis reported its gross profit margin expanded to 31.9% for the quarter, a stout increase of 260 basis points from the 29.3% margin it posted in the same period a year ago. This jump in profitability suggests strong cost controls and successful pricing strategies within a traditionally high-volume, low-margin industry.
Fueling the results was the completed acquisition of CFC Print & Mail, a wholesale provider of business documents and commercial print solutions. According to the company's earnings release, the newly integrated business contributed approximately $5.8 million to revenues during the quarter. The deal, announced in November, represents a key part of Ennis's strategy to grow through strategic acquisitions that add profitable revenue streams.
"The CFC acquisition and our focus on operational discipline were key drivers this quarter," said Keith Walters, Chairman, President & CEO of Ennis, Inc., in a statement. Walters expressed confidence in the company's ability to improve cash flow through ongoing inventory optimization and highlighted its strong financial position, noting a robust balance sheet with no debt.
For the third fiscal quarter ended November 30, 2025, Ennis generated total sales of $100.2 million and net earnings of $10.8 million. While revenue growth was nearly flat year-over-year, the improved margin profile allowed the company to deliver stronger bottom-line results, a trend that has captured investor attention.
With a market capitalization of approximately $465 million, Ennis is a long-established player in the commercial services and supplies sector. The stock's low beta of 0.40 suggests lower volatility compared to the broader market, and a significant 83% of its shares are held by institutional investors, indicating a stable investor base. Wall Street analysts have a consensus 12-month price target of $23.00 on the stock, representing significant potential upside from its current trading level.