Why Tennant Stock Is Plummeting Today
Shares of leading floor-care equipment and cleaning solutions provider Tennant Company (NYSE: TNC) are down 26% as of 1 p.m. ET on Tuesday after the company delivered lackluster fourth-quarter earnings. Sales, adjusted EBITDA, and adjusted earnings per share (EPS) sank 11%, 46%, and 68%, after Tennant's plant ERP transition in November disrupted operations. The company's Q4 sales of $292 million and adjusted EBITDA of $45 million were impacted by $30 million and $22 million, respectively, due to order-entry, production, and shipping issues tied to the ERP transition. Worse yet, management estimated that of the $30 million in lost sales, roughly half would be unrecoverable, as customer relationships were strained due to the three-week disruption.
As a Dividend King -- an S 500 company that has grown its dividend for 50 years or more -- this type of tumult is almost hard to fathom, as the dividend growth stocks in this group are some of the steadiest stocks in the world. In this light, it makes sense that Tennant is working with activist investing firm Vision One, which now owns a 2% stake in the cleaning company. Even before Q4's issues, Tennant's stock was in the midst of a 50% pullback from its 2024 all-time high as its revenue growth rate slowed to 3% annually over the last five years.
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Source Fool.com
