Tennant Company's stock declined sharply following fourth-quarter earnings that fell short of expectations, with the company attributing operational challenges to a November enterprise resource planning system transition. The cleaning equipment manufacturer reported an 11% decline in sales and a 68% drop in adjusted earnings per share for the quarter, reflecting the extended implementation period of its new ERP platform.
Management disclosed that the system transition resulted in approximately $30 million in lost sales during the quarter, with approximately half of that amount expected to be permanently unrecoverable due to strain on customer relationships. The company projects that operations will stabilize by the second quarter of 2026 as the ERP implementation progresses and customer confidence is restored.
Looking ahead, Tennant has provided guidance for 3% to 6.5% organic sales growth in the current fiscal year as conditions normalize. The earnings miss carries particular significance for the company, which holds Dividend King status, as investors assess the sustainability of its capital return program amid the operational recovery period.