Franklin Covey Co. has announced a new $20 million 10b5‑1 share repurchase plan that will be executed under the company’s existing $50 million share‑repurchase authorization. The plan is slated to be completed by the end of January 2026, adding a second tranche to the $20 million already committed under the prior plan.
The company had already completed $10 million of share repurchases in the fourth quarter of fiscal 2025 and an additional $10 million in the first quarter of fiscal 2026, bringing the total repurchased under the earlier authorization to $20 million. The new plan therefore doubles the amount of capital that will be returned to shareholders in the near term.
CEO Paul Walker said the new plan reflects Franklin Covey’s confidence that the stock is undervalued and that the company’s long‑term performance will continue to generate value. He added that the repurchase program is part of a broader capital‑allocation strategy that balances shareholder returns with investments in AI‑driven solutions and market expansion.
Financially, the company reported Q4 FY2025 revenue of $71.2 million, a 15.3 % decline from $84.1 million in the same quarter a year earlier, and net income of $4.4 million, or $0.34 per diluted share, versus $12.0 million and $0.89 per diluted share in Q4 FY2024. The revenue beat analysts’ estimate of $71.11 million, but the EPS miss of $0.55 per share was driven by a 15 % drop in the Enterprise Division and a one‑time charge related to restructuring costs. The company’s gross margin of 76.2 % remained strong, indicating pricing power in its core services despite the revenue decline.
Reducing the number of shares outstanding through the repurchase program is expected to lift earnings per share. While Franklin Covey has not disclosed a precise EPS lift, a $20 million buyback at the current share price would reduce the share count by roughly 1.3 million shares, potentially increasing EPS by 5–10 % depending on future earnings growth. The company’s guidance for fiscal 2026—revenue of $265–$275 million and adjusted EBITDA of $28–$33 million—suggests management expects to maintain profitability while returning capital to shareholders.
Investors have noted the revenue beat but expressed concern over the EPS miss and the company’s lack of forward guidance. The market reaction to the Q4 earnings release was mixed, with a short‑term lift following the revenue beat and a subsequent decline as analysts highlighted the EPS miss and the absence of a clear outlook for the next quarter. The share repurchase announcement is viewed as a signal that Franklin Covey believes its stock is undervalued and that it can generate value for shareholders while still investing in growth initiatives.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.