Dogness (International) Corporation reported first‑half 2026 results that saw revenue decline 36.2% to $7.710 million, a drop from $12.1 million in the same period a year earlier. The company posted a net loss of $5.175 million, or $(0.29) per share, compared with a net loss of $1.8 million a year ago.
Intelligent pet product sales fell 62.6% to $1.7 million from $4.5 million, while climbing‑hooks and other manufacturing revenue dropped 76.8% to $0.7 million from $2.9 million. Traditional pet product revenue grew 14.6% to $5.343 million from $4.7 million, but the overall gross profit margin contracted to 11.2% from 28.3% in the prior year, reflecting lower sales volume and reduced average selling prices in the high‑margin segments.
Operating expenses increased 13% to $6.328 million, driven by higher marketing and R&D spend, while general and administrative costs were trimmed by more than 20%. The operating loss widened to $5.461 million, up from the prior period, indicating that cost reductions have not yet offset the revenue decline.
Management said the temporary impact of U.S. tariff policies has weighed on revenue and margins, but the company has taken steps to control costs and invest in new product development. "The first half of fiscal 2026 presented challenges as U.S. tariff policies temporarily impacted our overall revenue and margins. Despite these headwinds, our core traditional pet products category demonstrated strong resilience, growing 14.6% year‑over‑year driven by increased global demand and loyal customer orders," said CEO Silong Chen.
Chen also highlighted operational measures: "To mitigate external pressures, we took proactive steps to optimize operations, successfully reduced our general and administrative expenses by over 20%. At the same time, we strategically invested in targeted marketing to expand our brand footprint and capture future market share."
Looking forward, the company remains optimistic about its R&D pipeline. "Looking ahead, our outlook remains highly optimistic. We are accelerating our R&D initiatives to introduce a new generation of intelligent, eco‑friendly pet products that meet evolving consumer demands. Backed by a robust portfolio of over 200 patents and a fully integrated supply chain, Dogness is well‑positioned to navigate these temporary trade fluctuations, return to sustainable growth, and deliver long‑term shareholder value," Chen added. The results underscore the company’s ongoing challenge of balancing declining high‑margin segments with growth in traditional products while navigating trade headwinds and investing in future‑growth technologies.
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