Shares of Lakeland Industries (LAKE -1.38%) dropped as much as 14.1% in trading on Thursday after the company reported fiscal first-quarter 2022 results. The stock closed the day down 12.6%.
Net sales for the quarter were $34.1 million, down sharply from $45.6 million a year ago and $36.9 million in the fourth quarter of fiscal 2021. Management said that demand for personal protective equipment (PPE) was down as the worst of the pandemic subsided and customers experienced higher inventory levels.
Net income fell from $8.6 million a year ago to $4.6 million, or $0.57 per share. If the current end-user demand remains weak, it's likely the rest of the year will be fairly weak, too, and that's why the stock is trading so much lower.
As many companies start to see demand pick up while the pandemic subsides, Lakeland Industries is one company that will see its business slow. That's the nature of PPE right now, but it's encouraging that the company is still making a profit given the drop in demand. Down days like today are a reminder of why a balanced portfolio is important so investors aren't hurt too badly if one business takes a negative turn.