Oil-Dri Corporation of America (ODC) finished fiscal 2026 with record fourth-quarter revenue. It earned $1.00 per diluted common share on revenue of $129.29 million for the quarter ended July 2026. Earnings grew 12.4% from a year ago and revenue grew 3.3%. No consensus estimate or Earnings Whisper was available, so the quarter is best judged against Oil-Dri's own trajectory. On that basis, management did what it promised. Early in the year it guided to a difficult first half followed by a stronger second half and a realistic chance of a full-year profit gain. It delivered record annual sales of $493.8 million, record net income of $57.0 million and EBITDA of $93.3 million, up from $90.0 million. The central tension is how the gains were produced. Earnings grew faster than revenue because expenses were cut, not because product economics improved.
The quality of the beat deserves scrutiny. Fourth-quarter gross margin was flat year over year at 27.8%. Gross profit rose only 3%, in line with sales, while domestic cost of goods sold per ton increased 3% on higher freight. The real lever was SG&A, which fell 8% to $17.7 million and dropped from 15.3% to 13.7% of sales. That decline accounts for most of the 17% gain in operating income. The full-year picture makes the point more sharply. Gross margin compressed from 29.5% to 27.8% as per-ton costs rose 4%. Operating income was essentially flat at $68.0 million. Net income growth leaned on a $3.5 million swing in other income, which included lower landfill costs, higher interest income and a favorable legal settlement. Part of the SG&A reduction came from a lower bonus accrual, which is not an obvious source of repeatable savings.
The segment detail shows a business pulling in two directions. Business to Business was the clear winner. Sales rose 4% to $50.1 million, and operating income climbed 13% to $17.0 million. Animal health set a quarterly record of $9.9 million, up 18%, recovering fully from the key-account loss management disclosed in the second quarter. Agricultural sales grew year over year in every quarter of the fiscal year. Retail and Wholesale tells a weaker story. Sales grew 3%, yet segment operating income fell 5% to $9.3 million because shipping cat litter became significantly more expensive. Diesel prices and tighter trucking capacity drove those costs, and some price increases reach customers only on a lag. Domestic cat litter excluding co-packaged products fell 3% to $55.9 million as clay litter softened under competitor trade spending and changes in retailer distribution. Co-packaged litter grew 60%, helped by new lightweight products, and partly masks that erosion in the core branded and private-label clay business.
There are also signs of deceleration. Third-quarter sales grew 9% and operating income grew 23%. Fourth-quarter growth slowed to 3% and 17%, respectively. Fluids purification sales were flat in the quarter but down 5% for the year, reflecting volatile demand from renewable diesel producers. Management also cautioned that the fourth-quarter pace for its Amlin animal health products is not sustainable, attributing part of it to a rebound effect. Depreciation and amortization rose 6%, and management continues to flag depreciation as a structural drag on gross margin. That drag could grow, because the CFO indicated capital spending could exceed the roughly $35 million annual run rate.
The most consequential forward-looking development is on the balance sheet. Year-end cash reached a record $73.7 million, operating cash flow was $80 million, and share repurchases rose to $12.6 million from $2.3 million. On top of that, Oil-Dri expanded its revolver to $100 million with a $125 million accordion and doubled its fixed-rate shelf to $150 million. Total borrowing capacity rose from $200 million to $375 million, and the company removed its $100 million acquisition cap. Management said it is actively evaluating strategic acquisitions in sorbent minerals. That gives Oil-Dri a new growth path, but it also introduces leverage and integration risk to what has been a conservatively financed company. Other catalysts include Brazil's bans on certain feed antibiotics, Amlin's expansion into beef feedlots, adoption of new Amlin products by large North American poultry integrators, and early signs that competitors' promotional spending is easing.
Market data for this report is limited. No sentiment reading or current price was supplied. The stock opened at $87.76 after the June report, comfortably above a 200-day moving average now at $77.74, so shares came into this release with a reasonably constructive longer-term trend.
The bottom line is that Oil-Dri delivered on its second-half recovery and closed a record year with strong cash generation and more financial flexibility. However, earnings grew mainly through expense discipline while gross margin stayed under pressure from freight costs and depreciation. Investors now need to watch three things: whether price increases catch up with transport costs, how management handles slowing B2B growth as the Amlin surge normalizes, and how it uses the expanded borrowing capacity.