What Happened?
Shares of industrial cleaning equipment manufacturer Tennant Company fell 17.1% in the afternoon session after the company reported second-quarter results that missed analyst estimates on the top and bottom lines and lowered its full-year profit forecast.
The industrial cleaning equipment manufacturer's revenue for the quarter was $324 million, falling short of the consensus estimate of $329.6 million. The earnings miss was more significant, with adjusted earnings per share coming in at $0.83, well below analysts' expectation of $1.33. Weaker profitability was driven by a decline in gross margin and increased operating expenses.
While Tennant raised its 2026 net sales guidance to a range of $1.270 billion to $1.310 billion, it trimmed its full-year profit outlook. The company lowered its guidance for Adjusted EBITDA, a measure of profitability, to between $155 million and $170 million, with the midpoint falling below analyst estimates of $180 million.
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What Is The Market Telling Us
Tennant’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for Tennant and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock dropped 25.4% on the news that the company reported weaker-than-expected results for the third quarter of 2025. The company's revenue fell 4% year-over-year to $303.3 million, missing Wall Street's expectations. Similarly, its adjusted earnings per share of $1.46 and adjusted EBITDA of $49.8 million both came in below consensus estimates. The results were weighed down by a shrinking operating margin, which fell to 7.4% from 9.7% in the same quarter last year. While Tennant reiterated its full-year revenue and EPS guidance and provided an upbeat full-year EBITDA forecast, investors focused on the softer-than-expected current quarter's performance.
Tennant is flat since the beginning of the year, and at $74.66 per share, it is trading 16.3% below its 52-week high of $89.22 from August 2026. Investors who bought $1,000 worth of Tennant’s shares 5 years ago would now be looking at only $997.33.
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