GNRC · 10-Q · 2026Q3 · Full report

Tariff Refund and Gross Margin

GENERAC HOLDINGS INC. · 2026-11-03 · Importance 39 · Surprise 50 · In source text

Third-quarter gross margin was 39.9%, up from 38.3% a year earlier, primarily because of favorable price/cost impacts, including lower tariff costs, partly offset by unfavorable sales mix. Nine-month gross margin increased to 41.0% from 39.0%, with tariff refunds contributing approximately 2 percentage points of margin growth. The company received $29.7 million of Phase I IEEPA tariff refunds in the third quarter and $91.1 million in the first nine months of 2026. It recorded $9.5 million and $80.6 million, respectively, as reductions of cost of goods sold, with approximately $10.5 million of recovery remaining in inventory at September 30, 2026.

Key facts

• The U.S. Supreme Court invalidated IEEPA tariffs on February 20, 2026, and allowed recovery of previously paid IEEPA tariff amounts. source
• Generac received Phase I IEEPA tariff refunds of approximately $29.7 million in the three months and $91.1 million in the nine months ended September 30, 2026. source
• Generac recorded approximately $9.5 million and $80.6 million of tariff recovery as reductions of cost of goods sold for the three and nine months ended September 30, 2026, respectively. source
• As of September 30, 2026, Generac had received all expected Phase I IEEPA tariff refunds, and approximately $10.5 million of tariff recovery remained in inventory. source
• Generac’s third-quarter 2026 gross profit margin was 39.9%, compared with 38.3% in the third quarter of 2025, primarily due to favorable price/cost impacts including lower tariff costs, partly offset by unfavorable sales mix. source
• Generac’s nine-month 2026 gross profit margin was 41.0%, compared with 39.0% in the prior year; tariff refunds contributed approximately 2% to gross-margin growth, with lower tariff rates and favorable price/cost impacts also contributing. source

Impact estimates