Escalade reported lower third-quarter sales but higher profit, as improved margins and a recovery of previously incurred tariff costs helped offset weakness in several product categories. The sporting-goods and recreation-equipment maker also generated stronger operating cash flow, reduced debt and approved a quarterly dividend.
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Sales fell, but some categories grew. Third-quarter net sales were $65.6 million, down 3.2% from a year earlier. Lower sales in basketball, indoor games and table tennis outweighed gains in archery, safety and outdoor games. The company said the comparison was affected by tariff-related order timing in the prior-year quarter. Archery benefited from strong demand for vertical bows and the contribution of Gold Tip, acquired in September 2025.
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Margins and earnings improved. Gross margin rose 1.23 percentage points to 29.4%, which Escalade attributed mainly to better absorption of costs and a more favorable customer and sales mix. Operating income increased to $8.7 million from $7.3 million. Net income rose to $6.7 million from $5.6 million, and diluted earnings per share increased to 48 cents from 40 cents.
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Tariff recoveries boosted results. Third-quarter pre-tax income included $1.7 million in tariff recoveries. The company said the recoveries contributed $1.6 million to EBITDA, which was $10.0 million, up from $8.6 million a year earlier.
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Cash generation strengthened and debt declined. Cash provided by operations was $14.9 million, compared with $1.0 million used in the year-earlier quarter. At September 30, total debt was $13.1 million, down from $20.2 million a year earlier and $18.5 million at the end of 2025. Escalade also had $24.5 million in cash and equivalents and $60.0 million available under its revolving credit facility, which matures in 2027.
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Quarterly dividend approved. The board approved a dividend of 15.25 cents per share. Shareholders of record on January 4, 2027, are due to be paid on January 11.
What the results show: Escalade’s quarterly profit increased despite lower sales, supported by higher margins and tariff recoveries. The reported tariff benefit was a material contributor to EBITDA, while the company also ended the quarter with less debt and more cash from operations than in the year-earlier period.