The Consumer Discretionary group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Flexsteel Industries (FLXS) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out.Flexsteel Industries is a member of the Consumer Discretionary sector. This group includes 292 individual stocks and cu ...

Financial Data and Key Metrics Changes - The company reported net sales of $100.1 million for the second quarter, slightly above the guidance of $94 million to $100 million [50] - Year-over-year sales growth was 7.5%, with a robust 11.7% growth when excluding the impact of eliminated ocean freight surcharges [25][50] - Operating income increased to $4.6 million, representing 4.6% of sales, exceeding the operating guidance range of 2% to 4% [50] - Gross margin expanded to 21.9% compared to 17% in the prior year quarter [50] Business Line Data and Key Metrics Changes - The core business continues to perform well, with significant sales growth driven by unit volume and product mix [26] - The company is focusing on expanding its product offerings to younger consumers and new product categories, such as the Zecliner sleep chair [29][14] Market Data and Key Metrics Changes - The company is experiencing challenges from macroeconomic factors and shifts in consumer spending, yet it remains focused on strategic initiatives to gain market share [23][54] - The closure of the Dublin facility is expected to result in annualized savings of $4 million to $4.5 million, which will help improve profitability [32] Company Strategy and Development Direction - The company aims to continuously improve customer experience and expand its market presence through new product launches and partnerships with strong distribution channels [13][16] - Future growth initiatives include targeting younger consumer segments and expanding sales distribution beyond independent furniture retailers [14][16] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about maintaining profitable growth despite near-term challenges, with expectations for continued sales growth in the second half of fiscal 2024 [24][53] - The company anticipates a gross margin range of 21% to 22% for the third quarter, with ongoing cost savings initiatives expected to support margin improvement [54] Other Important Information - The company plans to incur restructuring costs between $2.0 million and $2.5 million related to the Dublin facility closure, expected to be primarily in the third and fourth quarters of fiscal 2024 [55] - The effective tax rate for fiscal 2024 is projected to be between 30% and 32% [63] Q&A Session Summary Question: Can you discuss the quality of orders and new business? - Management indicated that most growth is coming from existing strategic accounts, with ongoing efforts to deepen placements [58] Question: What are the drivers behind gross margin improvement? - Management highlighted cost savings, new product introductions, volume leverage, and strategic promotional activities as key drivers of gross margin improvement [75][78] Question: What is the outlook for fiscal 2025 regarding debt and cash allocation? - Management confirmed plans to reduce debt to zero by the end of fiscal 2024 and indicated potential for value-enhancing acquisitions in the future [96][97]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ______________________________________ FORM 10-Q ______________________________________ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended December 31, 2023 or Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 0-5151 ______________________________________ FLEXSTEEL INDUSTRIE ...

Flexsteel Industries (FLXS) came out with quarterly earnings of $0.57 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.08 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this furniture maker would post earnings of $0.24 per share when it actually produced earnings of $0.14, delivering a surprise of -41.67%.Over the last four quarters, the company has surpassed consensus EPS estimates two times.Flexsteel, which ...

DUBUQUE, Iowa--(BUSINESS WIRE)--Flexsteel Industries, Inc. (NASDAQ: FLXS) (“Flexsteel” or the “Company”), one of the largest manufacturers, importers, and marketers of residential furniture products in the United States, today reported second quarter fiscal 2024 results and announced actions to optimize its North American manufacturing network. Key Results for the Second Quarter Ended December 31, 2023 Healthy sales growth of 7.5%. Net sales for the quarter of $100.1 million compared to $93.1 million in ...

Flexsteel Industries (FLXS) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2023. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on ...

Financial Data and Key Metrics Changes - The company reported net sales of $94.6 million for the first quarter, reflecting a year-over-year sales growth of 6.8% when excluding the impact of ocean freight surcharges [60][55] - Operating income was $1.9 million, representing 2% of sales, which is an improvement from $0.4 million in the same quarter of the prior year [50][60] - Gross margin improved to 19.5% compared to 16% in the same quarter of the prior year, with expectations for further improvement in the second quarter [50][10] Business Line Data and Key Metrics Changes - The sourced soft seating business saw a unit growth of 13.7% year-over-year, while manufactured stationary products grew by 3.7% [20] - E-commerce sales grew by 10.7% in the quarter, driven by increased revenue from big box distribution, notably with Costco [8] Market Data and Key Metrics Changes - The company anticipates that the elimination of ocean freight surcharges will negatively impact year-over-year sales comparisons by approximately $4 million in the second quarter [61][55] - The company is facing headwinds from high interest rates, rising fuel prices, and other economic factors, which are affecting consumer spending [56][82] Company Strategy and Development Direction - The company is focused on innovation and expanding its product lines, including the introduction of new products at the October Market [84][59] - The strategy includes leveraging growth initiatives to offset industry challenges and drive sales growth [81][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow sales despite near-term economic challenges, with a focus on operational efficiency and cost savings [5][56] - The outlook for the second quarter includes sales guidance of $94 million to $100 million, reflecting a growth of 1% to 7% [61][88] Other Important Information - The company ended the quarter with a cash balance of $3 million and working capital of $118.3 million, with a revolving line of credit balance of $33 million [87] - The effective tax rate for fiscal 2024 is expected to be in the range of 29% to 32% [89] Q&A Session Summary Question: What was the backlog at the end of the quarter? - The increase in backlog was attributed to prepayments for annual insurance and SAP software licenses, totaling about $2.5 million [30][31] Question: Can you quantify the impact of growth initiatives on first quarter sales? - Growth initiatives were a substantial factor in sales growth, with the business likely down in the high single-digit to low double-digit range without them [92] Question: What is the outlook for SG&A expenses? - SG&A expenses are expected to remain between $16 million and $17 million per quarter, with growth at a lower rate than overall top line growth in future years [69] Question: How is the company managing its inventory levels? - Inventory levels have been steady, with a focus on reducing inventory throughout the year to improve cash flow [62][87] Question: What is the status of the Mexicali plant? - The Mexicali plant is currently leased out, and the company will assess demand to determine future needs [121][122]

[Part I – Financial Information](index=3&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Flexsteel reported Q1 FY2024 net sales of $94.6 million, a slight decrease, but net income increased to $0.8 million due to improved gross margin [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased to $284.9 million, driven by lower trade receivables, while total liabilities also decreased to $143.5 million Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | June 30, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $165,155 | $170,642 | | **Total Assets** | $284,870 | $290,550 | | **Total Current Liabilities** | $46,834 | $55,105 | | **Total Liabilities** | $143,503 | $148,929 | | **Total Shareholders' Equity** | $141,367 | $141,621 | [Consolidated Statements of Income and Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Net sales decreased by 1.1% to $94.6 million, but gross profit increased by 20% to $18.4 million, leading to a surge in net income to $752,000 Quarterly Income Statement Comparison (in thousands, except per share data) | Metric | Q1 2024 (ended Sep 30, 2023) | Q1 2023 (ended Sep 30, 2022) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $94,603 | $95,684 | -1.1% | | Gross Profit | $18,410 | $15,349 | +20.0% | | Operating Income | $1,918 | $428 | +348.1% | | Net Income | $752 | $289 | +160.2% | | Diluted EPS | $0.14 | $0.05 | +180.0% | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating activities used $1.8 million in cash, a reversal from the prior year, primarily due to unfavorable working capital movements Cash Flow Summary (in thousands) | Activity | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(1,781) | $12,994 | | Net cash (used in) investing activities | $(1,355) | $(1,878) | | Net cash provided by (used in) financing activities | $2,744 | $(9,329) | | **(Decrease) increase in cash and cash equivalents** | **$(392)** | **$1,787** | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, including new subleases for the Mexicali facility, $33.0 million outstanding on the credit line, and a 44.2% effective tax rate - The company entered into two subleases for its Mexicali manufacturing facility during and subsequent to the quarter, covering a total of 444,413 square feet. The right-of-use asset for this facility is **$31.7 million** as of September 30, 2023[26](index=26&type=chunk)[27](index=27&type=chunk) - As of September 30, 2023, the company had **$33.0 million** outstanding under its credit agreement. The interest rate benchmark was transitioned from LIBOR to SOFR in May 2023, with an effective rate of **6.68%** at quarter-end[33](index=33&type=chunk)[34](index=34&type=chunk) - The effective tax rate for the quarter was **44.2%**, differing from the **21%** statutory rate primarily due to nondeductible stock compensation, state taxes, and the impact of foreign operations[35](index=35&type=chunk) - The environmental matter concerning the Lane Street Groundwater Superfund Site was resolved via a consent decree filed on October 24, 2022, with the company making a full payment of **$9.8 million**, partially reimbursed by insurance[60](index=60&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes sales decline to retail softness, offset by e-commerce growth, with gross margin improving due to cost control Quarterly Performance Summary | Metric | Q1 2024 (ended Sep 30, 2023) | Q1 2023 (ended Sep 30, 2022) | | :--- | :--- | :--- | | Net Sales | $94.6M | $95.7M | | Gross Margin % | 19.5% | 16.0% | | SG&A as % of Sales | 17.4% | 15.2% | | Operating Income % | 2.1% | 0.4% | | Net Income | $0.8M | $0.3M | - The decrease in net sales was driven by a **$2.2 million (2.6%)** decline in home furnishings products sold through retail stores, while sales through e-commerce channels grew by **$1.1 million (10.7%)**[67](index=67&type=chunk) - Gross margin increased by **350 basis points**, primarily due to cost control and material cost savings initiatives[69](index=69&type=chunk) - SG&A expenses increased by **$1.9 million (13.0%)** due to investments in growth initiatives[70](index=70&type=chunk) - Net cash used by operating activities was **$1.8 million**, compared to **$13.0 million** provided by operating activities in the prior-year quarter, mainly due to changes in working capital accounts like trade receivables, inventories, and payables[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=20&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies foreign currency fluctuations and variable interest rates on its $33.0 million credit line as primary market risks - The company is exposed to foreign currency risk, primarily from costs denominated in Mexican Pesos related to its operations in Mexico[89](index=89&type=chunk) - The company is exposed to interest rate risk on its line of credit, which had **$33.0 million** outstanding at a variable rate as of September 30, 2023[90](index=90&type=chunk) [Controls and Procedures](index=20&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls were effective as of September 30, 2023, with no material changes to internal controls - The CEO and CFO have concluded that the company's disclosure controls and procedures were effective as of September 30, 2023[91](index=91&type=chunk) - No significant changes were made to the company's internal control over financial reporting during the quarter ended September 30, 2023[92](index=92&type=chunk) [Part II – Other Information](index=21&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Risk Factors](index=21&type=page&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported from the Annual Report on Form 10-K - There has been no material change in the risk factors from the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2023[97](index=97&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=21&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 23,413 shares for approximately $455,000 under its $30 million share repurchase program, with $3.3 million remaining Share Repurchase Activity (Q1 FY2024) | Period | Shares Purchased | Average Price Paid | Total Cost (approx.) | | :--- | :--- | :--- | :--- | | Jul-23 | 8,176 | $19.31 | $157,800 | | Aug-23 | 1,899 | $19.67 | $37,350 | | Sep-23 | 13,338 | $19.45 | $259,420 | | **Total** | **23,413** | **$19.42** | **$454,570** | - As of September 30, 2023, approximately **$3.3 million** remained available for future repurchases under the authorized plan[99](index=99&type=chunk) [Exhibits](index=22&type=section&id=Item%206.%20Exhibits) Exhibits filed include CEO and CFO certifications as required by Sarbanes-Oxley Act, along with XBRL data files - Exhibits filed include CEO and CFO certifications pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act, along with XBRL interactive data files[100](index=100&type=chunk)

Financial Data and Key Metrics Changes - The company reported fourth-quarter sales of $105.8 million, reflecting a sequential quarter-over-quarter growth of 6.8% compared to the third quarter [16][22] - Operating income for the quarter was $4.2 million, representing 4% of sales, which was at the high end of the guidance range [5][11] - Full-year operating income increased to $10.5 million from $6.6 million in the prior year [6] Business Line Data and Key Metrics Changes - The big box channel accounted for approximately 5% of total sales in the fourth quarter and is expected to grow faster than other channels in fiscal year 2024 [8] - The new Charisma brand targeting younger consumers was launched, with expectations of gaining additional retail penetration following a competitor's exit from the sub-$1,000 sofa market [9] Market Data and Key Metrics Changes - Orders for the fourth quarter were up 20% year-over-year, indicating strong market performance despite overall sales decline [32] - The company faced pricing pressure due to competitive dynamics and a return to pre-pandemic demand levels amid macroeconomic uncertainty [18] Company Strategy and Development Direction - The company is focused on growth initiatives, operational efficiency, and cost control to drive long-term profitable growth [18][27] - New product launches, including the Zecliner sleep solutions recliner and the flex modular furniture solution, are part of the strategy to expand market presence [41][43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth outlook despite near-term economic uncertainties [27][50] - The company anticipates modest gross margin growth throughout the fiscal year, with expected sales growth and operational productivity [12][18] Other Important Information - The company published its first annual ESG report, outlining its commitment to sustainable and responsible business practices [21] - Cash flow outlook indicates that working capital will be a source of cash flow, with a focus on reducing debt and funding innovation [25][77] Q&A Session Summary Question: Can you talk about the revenue pattern during the quarter? - The decline in net sales was primarily related to pricing, particularly the elimination of ocean freight surcharges, which had peaked in the prior year [30] Question: How did the gross margin progress look? - Significant gains in operational efficiency across the supply chain contributed to gross margin improvements, with expectations to continue expanding margins throughout fiscal year 2024 [33][35] Question: What is the outlook for inventory levels at retail? - Retailers are generally in a good place with inventory levels, although there is caution due to lower store traffic [62] Question: What are the cash flow priorities moving forward? - The main priorities will be to continue growth initiatives and consider acquisitions if favorable opportunities arise [64]

Flexsteel Industries, Inc. (NASDAQ:FLXS) Q3 2023 Earnings Conference Call May 2, 2023 9:00 AM ET Company Participants Jerry Dittmer – President and Chief Executive Officer Alejandro Huerta – Chief Financial Officer, Treasurer and Secretary Derek Schmidt – Chief Operating Officer Conference Call Participants Anthony Lebiedzinski – Sidoti & Co Operator Good morning and welcome to the Flexsteel Industries Third Quarter Fiscal Year 2023 Earnings Conference Call. All participants will be in a listen-only mode. [ ...