Resources Connection, Inc. (RGP) reported third‑quarter fiscal 2026 revenue of $107.9 million, falling short of the consensus estimate of $108.19 million and marking a year‑over‑year decline. The shortfall reflects a continued contraction in the on‑demand talent segment, while the company’s pivot toward consulting services has not yet offset the revenue loss.
Gross margin improved to 35.7 % from 35.1 % in the same quarter a year earlier, driven by a higher mix of higher‑margin consulting and managed‑services revenue and disciplined cost control.
GAAP diluted earnings per share were a loss of $0.28, missing the consensus estimate of –$0.11 by $0.17. The miss is attributable to lower revenue, higher SG&A expenses of $45.8 million, and the company’s ongoing transformation initiative, which has temporarily increased operating costs.
For the fourth quarter, management guided revenue to decline 16 % year‑over‑year on an organic constant‑currency basis, reflecting continued demand weakness in core segments. Despite the guidance, the CFO highlighted that the company’s cash position remains strong and that the transformation plan is expected to deliver cost savings of $12‑$14 million annually.
CEO Roger Carlile expressed optimism about the company’s future, emphasizing strong client relationships and the competitive advantage of its three‑delivery‑mode model. CFO Jennifer Ryu noted that no M&A revenue was recorded in the quarter and that the Sitrick business sale, which generated approximately $9 million in revenue, is complete.
Investors reacted positively, citing confidence in the company’s cost‑saving initiatives, the transformation plan, and its robust cash position as key factors supporting the outlook for fiscal 2027.
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