Methode Electronics, Inc. reported fiscal 2026 second‑quarter results that saw net sales fall 15.5% to $246.9 million, operating income shrink to $2.9 million from $9.4 million a year earlier, and a net loss of $9.9 million. Adjusted income from operations dropped to $4.0 million from $14.3 million, while the company reaffirmed its full‑year guidance of $900 million to $1 billion in net sales and $70 million to $80 million in adjusted EBITDA, and projected positive free cash flow for the year.
Segment‑level analysis shows the automotive division, the company’s largest revenue generator, posted $110.5 million in sales and a $10.9 million operating loss, down from $145.5 million and a $9.4 million loss a year earlier. The industrial segment generated $126.9 million in sales and $29.3 million in operating income, a decline from $131.4 million and $31.5 million, respectively. The interface segment produced $9.5 million in sales and $2.3 million in operating income, down from $15.7 million and $3.8 million. The revenue decline is largely driven by a 26 % drop in automotive sales, reflecting the company’s ongoing roll‑off of legacy programs and weaker demand for electric‑vehicle components.
Margin compression is evident: operating margin fell to 1.2% from 3.2% a year earlier, driven by lower volumes and a weaker automotive mix. Inventory write‑downs and higher raw‑material costs further eroded profitability, while the company’s cost‑reduction initiatives have yet to fully offset these headwinds. The net loss, while larger than the $1.6 million loss a year earlier, is largely attributable to a one‑time charge related to restructuring and inventory write‑downs.
CEO Jon DeGaynor emphasized that the transformation program is progressing, noting that “the company is laser focused on improving execution and making Methode a more reliable and resilient company.” He highlighted that cost‑reduction initiatives and new program launches are expected to support margin expansion, and that the company remains confident in delivering positive free cash flow for the year.
Despite the revenue decline and net loss, the company’s guidance remains unchanged, signaling management’s confidence that the transformation will ultimately improve profitability. The company faces ongoing headwinds from EV market softness and inventory write‑downs, but it also sees tailwinds in its higher‑margin industrial and interface segments. Market reaction was muted, with the stock falling 5% in after‑hours trading, largely driven by the EPS miss of $0.28 per share versus the consensus estimate of $0.25 and the significant year‑over‑year revenue decline.
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