Franklin Covey Swings to $5.3M Loss in First Half of Fiscal 2026

Franklin Covey Co. (NYSE: FC), a leadership training and organizational consulting firm, swung to a net loss of $5.3 million for the six months ending February 28, 2026, compared to net income of $105,000 in the same period a year earlier. Read more earnings reports.

Revenue for the first half of fiscal 2026 fell 3.9% to $123.7 million from $128.7 million in the prior-year period. The company reported an operating loss of $5.7 million, a sharp deterioration from operating income of $19,000 a year earlier.

For the quarter ending February 28, 2026, Franklin Covey posted a net loss of $2.0 million, compared to a loss of $1.1 million in the same quarter of fiscal 2025. Quarterly revenue was essentially flat at $59.6 million, up slightly from $59.6 million a year ago.

Margin Compression Drives Losses

Gross profit for the six-month period declined to $93.6 million from $98.5 million, reflecting margin pressure despite relatively stable revenue. Cost of goods sold rose to $30.0 million from $30.2 million.

Selling, general and administrative expenses declined to $89.6 million for the first half of fiscal 2026 from $92.3 million in the prior-year period, a reduction of $2.7 million. The cost savings were insufficient to offset the decline in gross profit.

Cash Position Weakens

Cash and cash equivalents stood at $13.7 million as of February 28, 2026, down sharply from $31.7 million at the end of the prior fiscal year on August 31, 2025. The company generated $16.4 million from operations during the six-month period, up from $12.8 million a year earlier.

Cash used in financing activities totaled $27.6 million for the first half of fiscal 2026, compared to $15.9 million in the prior-year period. Investing activities consumed $6.8 million, up from $5.0 million a year earlier.

Balance Sheet Erosion

Total assets declined to $206.5 million as of February 28, 2026, from $242.9 million at the end of fiscal 2025. Current assets fell to $95.4 million from $129.5 million. Accounts receivable dropped to $50.2 million from $68.4 million.

Stockholders' equity decreased to $38.1 million from $66.9 million at the end of the prior fiscal year. Treasury stock increased to $312.8 million from $289.9 million, reflecting share repurchase activity.

Total liabilities declined to $168.4 million from $176.0 million. Current liabilities fell to $152.2 million from $157.3 million.

Per-Share Results

The company reported a loss of $0.45 per diluted share for the six months ending February 28, 2026, compared to earnings of $0.01 per diluted share in the prior-year period. For the quarter, the loss was $0.17 per diluted share versus a loss of $0.08 per share a year earlier.

Weighted average diluted shares outstanding totaled 11.8 million for the six-month period, down from 13.2 million in the prior year. The company had 11.3 million shares outstanding as of February 28, 2026.