Wabash Q3 sales slip; CEO eyes 2026 recovery

Wabash President, CEO & Director Brent Yeagy got the bad news out of the way right from top.

“As we look back on the third quarter, it's clear that the softer market conditions we've been navigating through the year persisted and, in some cases, intensified,” Yeagy said to open the company’s Q3 earnings call with investment analysts. “Demand across the transportation industry remained below expectations as customers continue to delay capital spending decisions, creating further pressure on order activity. This environment contributed to our Q3 performance coming in below plan.”

Wabash reported net sales for the third quarter of 2025 were $381.6 million, a 17.8% decrease compared to the same quarter of the previous year. The company generated consolidated gross profit of $16 million, equivalent to 4.1% of sales. GAAP operating income amounted to $58 million as the company recognized a $81 million gain as a result of a settlement agreement related to a 2019 accident and subsequent legal verdict. Non-GAAP adjusted operating loss was $23.6 million for the quarter.

As for silver linings, Yeagy pointed to the parts and service business, which posted both sequential and year-over-year revenue growth in the quarter, “demonstrating its resilience and critical role it plays in providing stability to our overall performance.”

As of September 30, the Wabash backlog stood at approximately $829 million, as customers continue to take “a wait-and-see approach,” to capital spending, the company noted.

For the full year ending December 31, Wabash reduced its revenue outlook to $1.5 billion.

“As we close out the third quarter, we’ve stayed true to our values while making the prudent—but sometimes difficult—decisions needed to manage our cost base in this environment," Yeagy said. "Our balance sheet is working, and our liquidity provides the flexibility to navigate near-term headwinds while investing in long-term growth.”

Recovery timing, tariffs

The fourth quarter will be the weakest of the year, both in terms of Wabash revenue and operating margins, Yeagy reported, but the 2026 order book is open and Wabash has seen “a few early wins.”

“The bulk of larger fleet orders typically comes together between now and year's end, which will give us much better visibility into next year's demand profile,” he continued. “Based on early customer discussions and the most recent forecast, we remain cautiously optimistic that 2026 could mark the beginning of a gradual recovery, supported by pent-up replacement needs and improving freight conditions.”

And Wabash remains well positioned when demand "normalizes" next year, Yeagy noted.

"With the recent inclusion of dry van and refrigerated trailers in the Section 232 steel and aluminum derivative tariffs, we expect to see gradual effects on the competitive landscape as the industry adjusts over the coming quarters," he said. "This development may ultimately serve as a catalyst for improved market share dynamics as the cycle strengthens through 2026. However, we recognize that these effects may take time to materialize as competitors evaluate their sourcing strategies and pricing responses. Our focus remains on maintaining cost stability and supply chain resiliency, areas where Wabash holds a clear structural advantage."

Recent long-term agreements with major suppliers is the key to that advanted, affording Wabash a 95% domestically sourced supply chain, Yeagy added.

“We are far better positioned than our peers to manage input cost volatility. As the full impact of the 232 tariff action unfolds over the coming months, it's important that we continue to educate our customers on the growing risk of pricing instability within the market,” Yeagy said. “Wabash's consistent and reliable supply chain represents a distinct value differentiator, particularly as customers prepare for the next freight up cycle and look to manage profitability in the early stages of recovery.”

Settlement resolved

Also during the third quarter, Wabash finalized a settlement related to a 2019 accident involving a Wabash trailer that was fully compliant with safety regulations.  The case had previously resulted in a jury verdict that included punitive damages exceeding $450 million, along with approximately $12 million in compensatory damages.

Following post-trial motions, the court substantially reduced the verdict amount prior to the settlement. Under the terms of the settlement, Wabash payment obligation is approximately $30 million, Yeagy reported, with the remaining amount covered by insurance.

Despite precedent to the contrary, the jury was prevented from hearing critical evidence in the case, including that the driver's alcohol level was over the legal limit at the time of the accident and the fact that neither the driver nor the passenger were wearing seatbelts, he noted.

“Unfortunately, this case reflects a troubling trend in America's courts, where aggressive plaintiffs' attorneys target reputable companies regardless of the facts,” Yeagy said. “Verdicts like this threat not only innovation, but the stability of manufacturing and transportation companies that serve as economic anchors in communities across the country.”

Parts, TaaS growth

Regarding the Wabash parts and services business, Mike Pettit, SVP and  chief growth officer, characterized the unit’s performance as “validating,”  posting Q3 revenue that was among the best on record “in a very challenging freight environment.”

“One of the clearest proof points behind the parts and services momentum sits in our upfit business,” Pettit said. “Our upfit offerings let us deliver fully tailored equipment in just a couple of weeks, combining the scale of truck body production with the deep customer intimacy that defines parts and services. This is also a business where we are introducing some of our latest cutting-edge digital tools.

“Using AI, we are now able to quote and upfit a truck body almost instantaneously, allowing our customers to make pricing decisions in real time and place orders for their chassis and truck body together. This process has historically taken days or weeks in the truck body market. We shipped over 540 units in Q3 and about 1,500 units year-to-date.”

Wabash plans ship more than 2,500 next year, he added.

Pettit also pointed to the expanding Trailer-as-a-Service business, which has expanding to include TaaS pools.

“With pools, we continue to develop solutions that enable logistics providers to grow with flexible, scalable trailer solutions,” Pettit said. “TaaS pools provide shippers with a universal trailer pool that replaces the complexity of managing fragmented pools across different partners. … We continue to accelerate the technology road map inside TaaS and have either launched or will soon be launching predictive analytics, alerts and automated tracking and billing, capabilities that turn raw data into actionable, measurable savings.”

Segment results

For the quarter, Wabash shipped 6,940 new trailers, down from 7,585 trailers in the 3Q last year. Truck body shipments totaled 3,065 units, down from 3,630.

“Our truck body business continued to face challenging market conditions through the third quarter, reflected in softness across medium-duty chassis production. Demand eased across most end markets as freight activity, construction, and industrial sectors slowed further,” Yeagy said.