Flexsteel Reports First Quarter Fiscal 2026 Results

October 21, 2025  by Karen Parrish in Business Strategy, Industry   

Key Results for the First Quarter Ended September 30, 2025

- Net sales for the quarter of $110.4 million compared to $104.0 million in the prior year quarter, an increase of 6.2%.

- GAAP operating income of $9.0 million or 8.1% of net sales for the first quarter compared to $6.0 million or 5.8% of net sales in the prior year quarter.

- GAAP net income per diluted share of $1.31 for the current quarter compared to net income per diluted share of $0.74 in the prior year quarter.

Management Commentary

“We delivered strong results in the quarter, and I’m pleased with our continued growth momentum and margin expansion,” said Derek Schmidt, CEO of Flexsteel Industries, Inc. “Despite choppy consumer demand and a challenging macroeconomic environment, the strength of our product offerings and continued investments in innovation and marketing are propelling our consistent growth and enabled a 6.2% sales increase in the quarter, which represents our eighth consecutive quarter of year-over-year growth. Our multi-pronged growth strategy is working well as we realized growth in the quarter from both our core market initiatives, driven largely by new products, and our new/expanded market efforts where we are ramping sales in both the casegoods and health and wellness product categories. Our revenue growth coupled with disciplined product portfolio management and operational cost savings are leading our continued margin expansion as we delivered a strong operating margin of 8.1% in the quarter, which represents our tenth consecutive quarter of year-over-year improvement and a 230-basis point increase compared to the prior year.”

Mr. Schmidt continues, “While we are executing well in a difficult environment, and I remain optimistic about the fundamental drivers of long-term industry growth, we continue to face significant risks and headwinds in the near term. Many of our retail partners noted that consumer traffic and sales were especially uneven during the recent quarter, suggesting that consumer confidence remains fragile given growing concerns about inflation and employment growth. Additionally, tariffs persist as a major risk to both demand and margins. While we gained additional clarity on reciprocal tariff changes in August, and we subsequently took action to mitigate the adverse impact of those tariffs, on September 29^th the White House issued a proclamation establishing section 232 tariffs on imported timber, lumber, and their derivative products, including upholstered furniture. The new section 232 tariffs superseded the prior reciprocal tariffs and put a 25% tariff on imported upholstered furniture effective October 14^th, which will subsequently increase to 30% effective January 1, 2026. We anticipate the tariff change to result in broad price increases for furniture and be highly disruptive to both consumer demand and industry margins in the short term. As we’ve demonstrated in the past, our company is agile and ready to respond to major shifts in market dynamics while remaining steadfast in our execution of our growth strategies and key investments to continue gaining market share.”

Mr. Schmidt concludes, “While tariff changes are projected to have a material impact on our sales and profitability short-term, our company is financially strong and well-positioned to navigate these near-term challenges while continuing to strengthen our competitiveness and drive long-term profitable growth and shareholder value."

For information and the archived Conference Call, visit Flexsteel’s Investor Site.