Flexsteel(FLXS) ZACKS·2025-02-04 16:10Core Insights - Flexsteel Industries, Inc. reported strong second-quarter fiscal 2025 results, with earnings and net sales exceeding expectations and showing year-over-year growth [1][4] Financial Performance - Adjusted earnings per share (EPS) reached 95 cents, surpassing the Zacks Consensus Estimate of 74 cents, and increased from 57 cents in the prior-year quarter [4] - Net sales amounted to 105 million by 3.7% and reflecting an 8.4% increase from the previous year [4] - Home furnishings sales through retail stores rose by 10.3% year-over-year, contributing to the overall sales growth [4] Operational Highlights - Flexsteel achieved its fifth consecutive quarter of positive sales growth, driven by strong performance in core markets and new initiatives [2] - The company expanded its operating margin by 150 basis points year-over-year to 6.1% [7] - Gross margin contracted by 90 basis points to 21% due to higher ocean freight costs, although selling, general, and administrative expenses as a percentage of net sales decreased by 240 basis points to 14.9% [6] Cash Flow and Debt Management - The company generated positive free cash flow, allowing it to pay off remaining bank debt and accumulate cash, with cash and cash equivalents increasing to 4.8 million at the end of fiscal 2024 [2][8] Future Guidance - For the third quarter of fiscal 2025, Flexsteel expects net sales between 115 million, indicating a growth of 3% to 7% compared to the prior year [9] - The company raised its fiscal 2025 net sales guidance to a range of 445 million, up from the previous expectation of 440 million, reflecting a projected growth of 5.5% to 8% year-over-year [9] Market Reaction - Following the positive earnings report, shares of Flexsteel increased by 6.9% in after-hours trading, driven by favorable investor sentiment [3]