Acme United, the Connecticut-based maker of Westcott cutting tools and a family of first-aid and emergency-care brands, is running what amounts to a two-front growth strategy in 2026: buying its way into adjacent markets and waiting out a tariff shock that hit its cost base hardest in the first quarter. The second quarter ended June 30 delivered the clearest evidence yet that the plan is landing. Net sales rose 16% to $62.7 million, a record for the company's second quarter, and operating income also hit a record as the profit drag from import duties receded. Net income climbed 6% to $5.1 million, or $1.22 a diluted share (GAAP), against $4.8 million a year ago.
But the two quarters of fiscal 2026 tell opposite stories, and that split is the central tension. The first quarter saw net income fall roughly 40% to under $1 million, the cost of selling inventory bought under last year's high tariff rates while absorbing the newly acquired My Medic business. The second quarter swung back to a record. Pull the first half together and net income actually declined 6% to $6.0 million ($1.46 diluted, GAAP) on sales up 15% to $115.0 million - revenue growing double digits while earnings shrink is, on its face, a profitability problem, and the share price at about $57 - near the top of a $35 to $60 twelve-month range - already reflects the better second-quarter read rather than the weaker first.
The stock trades at roughly 24x trailing earnings against a TTM diluted EPS of about $2.38, and the market's forward multiple (about 26x) prices essentially flat earnings, not a ramp. That says the debate is not whether Acme grows - it is growing - but whether the second quarter is the new run-rate or a lumpy peak. Management laid out the specific levers that would resolve it: tariff drag easing "at a decreasing rate," My Medic's profits concentrated in the fourth quarter, and a German tool line that added a second half. The thesis rests on those three landing on schedule.