Key Tronic Corporation (Nasdaq: KTCC) reported total revenue of USD 96.3 million for the second quarter (Q2) of fiscal year 2026, a decrease of 15% compared to the same period last year. For the first six months $(HY)$ of fiscal year 2026, total revenue was USD 195.1 million. The company reported a gross margin of 0.6% and an operating margin of -10.7% in Q2 fiscal year 2026. Adjusted gross margin, excluding charges related to the closure of the China manufacturing facility and workforce reductions in Mexico, was 7.9% for Q2 fiscal year 2026. Key Tronic cited reduced demand from a longstanding customer, the transition of an end-of-life program, and delays in new program launches due to ongoing global economic uncertainty and volatile trade policies as key factors affecting performance. These impacts were partially offset by increased demand from other longstanding customers and certain program ramps, including the continued ramping of a previously announced consigned materials program. During the period, the company undertook significant cost reduction initiatives, including the closure of its China manufacturing facility and workforce reductions in Mexico, which adversely affected margins. Key Tronic generated positive cash flow from operations in Q2 fiscal year 2026. Due to continued macroeconomic uncertainty, the company will not provide revenue or earnings guidance for the third quarter of fiscal year 2026.

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