Kennametal reports 3% sales increase for first fiscal quarter
Kennametal Inc. reported sales of $498 million for its first fiscal quarter of 2026 increased 3% from $482 million in the prior year quarter, reflecting organic sales growth of 3%.
"Our first quarter started off strong with share gains and modest end market improvements compared to our previous expectations, resulting in sales and adjusted EPS that exceeded the upper end of our outlook," said President and CEO Sanjay Chowbey.
"As we continue to build a more resilient business and create value for shareholders, our team remains focused on our fiscal year 2026 priorities of above market growth, cost structure improvement and shaping a smarter portfolio."
Operating income was $38 million, or 7.5% margin, compared to $36 million, or 7.5% margin, in the prior year quarter. The increase in operating income was driven by pricing and tariff surcharges and incremental year-over-year restructuring savings of approximately $8 million, partially offset by higher compensation costs, tariffs and general inflation, a prior year benefit from net insurance proceeds of $4 million that did not repeat in the current year and an increase in incremental restructuring and related charges of approximately $3 million. Adjusted operating income was $41 million, or 8.2% margin, in the current quarter, compared to $37 million, or 7.6% margin, in the prior year quarter.
Year-to-date net cash flow from operating activities was $17 million compared to $46 million in the prior year period. The change in net cash flow from operating activities was driven primarily by working capital changes including an increase in inventory. Year-to-date free operating cash flow (FOCF) was negative $5 million compared to positive $21 million in the prior year period. The decrease in FOCF was driven primarily by working capital changes including an increase in inventory, partially offset by lower net capital expenditures.
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