Reports Q1 net sales up 10.4% to $265.4M, affirms FY27 guidance

Methode Electronics reported net sales of $265.4 million for the first quarter of fiscal year 2027, an increase from $240.5 million in the same period last year. This 10.4% year-over-year growth was attributed primarily to higher volumes within the Industrial segment, particularly from data centers, although it was partially offset by the divestiture of the dataMate business and consumer appliance program roll-offs.

Despite the sales growth, the company recorded a net loss of $11.4 million, or $0.32 per diluted share, compared to a net loss of $10.3 million, or $0.29 per diluted share, in the first quarter of fiscal 2026. Gross profit increased to $47.7 million from $43.5 million in the prior-year quarter, benefiting from the higher Industrial sales and operational improvements. However, selling and administrative expenses rose to $45.9 million from $36.6 million, largely due to investments in talent and capabilities, as well as increased professional fees.

Adjusted EBITDA for the quarter was $13.7 million, or 5.2% of net sales, which is down from $15.7 million, or 6.5% of net sales, in the prior-year period. Management noted that one-time costs, including the impact of the dataMate divestiture and investments, more than offset the sales increase and operational improvements. Excluding the divestiture's impact, Adjusted EBITDA would have increased.

The company booked new non-data center awards totaling $75 million in peak annual revenue, representing approximately $400 million in lifetime revenue. Subsequent to the quarter end, Methode Electronics amended its revolving credit facility, extending certain maturities by one year to October 2028 and reducing the facility from $400 million to $375 million. The company reaffirmed its fiscal 2027 guidance for net sales of $1,025-1,075 million and Adjusted EBITDA of $72-82 million.