Investors unplugged from Methode Electronics (MEI 2.79%) stock on Thursday, after the company published quarterly results that featured erosion in key metrics. Its shares lost nearly 11% of their value that day, in a trading session that saw the benchmark S&P 500 index creep up by 0.1%.
Across-the-board declines
In Methode's fiscal second quarter of 2026, the company's net sales totaled just under $247 million, representing a 16% year-over-year decline. Net loss not in accordance with generally accepted accounting principles (GAAP) deepened considerably, to $9.9 million ($0.28 per share) from the year-ago deficit of $1.6 million.
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Methode beat the average analyst estimate of slightly over $236 million for sales, but missed the consensus of $0.25 per share for GAAP net loss.
All three of Methode's reporting segments experienced sales declines, led by a 39% decrease for the interface unit. The company attributed this to falling volume sales of touch panels for appliances. The industrial and automotive products segments, meanwhile, declined by 3% and 24%, respectively.
NYSE: MEI
Key Data Points
Full-year guidance reaffirmed
Methode reiterated its existing guidance for the entirety of fiscal 2026. Management expects sales to range from $900 million to $1 billion, while non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to be between $70 million and $80 million. The company didn't provide any bottom-line forecasts.
Methode seems to be on the wrong end of developments in all three of its target markets, and the currently cautious mood of the U.S. consumer probably isn't going to help. This might just be a falling-knife situation, and I'd worry that further share price erosion is in store.
