by Growth was driven by furniture sold to retail stores and slightly offset by a decrease in products sold via e-commerce
DUBUQUE, Iowa — Flexsteel Industries reported a 10% increase in sales for its fiscal first quarter of 2025 ended Sept. 30, marking the company’s fourth consecutive increase in year-over-year sales.
The company reported sales of $104 million, up from $94.6 million the same period last year. The company said this was driven by home furnishings sales sold through retail stores, which were up $11 million or 13.3%, “led by unit volume and product mix.” This was offset by a $1.6 million, or 13.3% decrease in products sold through e-commerce channels, compared to the same period last year, the company said.
Net income totaled $4.1 million, or 74 cents per share, compared with $752,000, or 14 cents per share, last year. Operating income totaled $6 million compared to $1.9 million last year, and gross margin for the quarter was 21.5% compared to 19.5%, up 200 basis points. The company said this largely was driven by sales leverage, supply chain cost savings and product portfolio management.
Also, selling, general and administrative expenses decreased to 15.7% of net sales in the first fiscal quarter compared to 17.4% of net sales the same period last year. This, the company noted, was because of leverage on higher sales volume and structural cost savings, which was partially offset by investments in growth initiatives.
“I am very pleased with our first-quarter results and continued strong execution,” said Derek Schmidt, Flexsteel president and chief executive officer. “While industry demand remains lackluster due to challenging macroeconomic conditions, we continue to build growth momentum and delivered 10% sales growth in the quarter which represents our fourth consecutive quarter of mid-single to low-double-digit year-over-year growth. Our exceptional growth performance was driven by both share gains in our core markets and diversified new growth in expanded markets resulting from our commitment to aggressively invest in new product development, innovation, customer experience and marketing.”
He added that in addition to its top-line increase, the company remains “steadfast in driving meaningful profitability improvement. Operating margin was 5.8% in the quarter, up compared to 2.0% in the prior-year quarter, and represents our fifth consecutive quarter of year-over-year adjusted operating margin improvement. The levers driving our consistent profit improvement are unchanged and working effectively: sales growth leverage, strong operational execution and productivity, and product portfolio management. With ample manufacturing and distribution capacity to support continued aggressive profitable growth, the earnings growth potential of the company remains compelling.”
“I’m proud of our team’s strong start to fiscal year 2025 and encouraged by our trajectory and prospects for continued profitable growth,” he added. “Our strategies are working and delivering healthy results. Given our confidence in continuing our strong execution, we are increasing the midpoints of both our sales and operating profit guidance ranges for fiscal year 2025. We are operating from a point of financial strength and will remain tenacious, but financially disciplined, in investing for future growth to maintain our strong momentum. Industry demand conditions are expected to remain challenged in the near-term, but I’m confident in our team’s ability to deliver exceptional value for our customers, continue gaining share and delivering strong earnings growth throughout the remainder of our fiscal year.”
Other highlights of the report were as follows:
+ The company said it ended the quarter with a cash balance of $5.7 million, a line of credit balance of $3.6 million and working capital of $98.3 million. It also has about $54.9 million available under its secured line of credit.
+ It also reported capital expenditures of $400,000 for the quarter ended Sept. 30.
