\nFlexsteel Industries, Inc. (NASDAQ: FLXS) (\u201cFlexsteel\u201d or the \u201cCompany\u201d), one of the largest manufacturers, importers, and marketers of residential furniture products in the United States, today reported first quarter fiscal 2027 results.<\/p>\n
Key Results for the First Quarter Ended September 30, 2026<\/b><\/p>\n Management Commentary<\/b><\/p>\n \n\u201cI’m pleased with our first quarter results and the continued momentum of our growth strategies despite a challenging macroeconomic environment,\u201d said Derek Schmidt, CEO of Flexsteel Industries, Inc. \u201cNet sales increased 3.2 percent compared to the prior year, toward the upper end of our guidance range, marking our twelfth consecutive quarter of year-over-year growth. Sales of Flexsteel branded products grew approximately 5 percent, while sales in our Homestyles ready-to-assemble category, which we are exiting, were down $1.9 million or 57% compared to the prior year quarter. Encouragingly, orders increased 5 percent and our ending backlog grew 8.2 percent versus the prior year period, reinforcing our confidence in the underlying strength of our business. New product introductions, strategic account share gains, and continued expansion in health and wellness remain strong contributors to our growth, providing further evidence that our strategic investments are strengthening our competitive position.\u201d<\/p>\n \nMr. Schmidt continued, \u201cFrom a profitability standpoint, we delivered a GAAP operating margin of approximately 6 percent, which included a $0.8 million or 70 bps unfavorable foreign currency translation impact related to our peso-denominated asset exposure in Mexico. Excluding this impact, operating margin was in line with our expectations for the quarter and reflected solid operating performance considering the significant inflationary pressures currently impacting our industry. Ocean transportation rates have nearly doubled over the last six months, while sharply higher fuel prices and rising material costs continue to pressure margins. Our teams have mitigated a meaningful portion of these headwinds through cost savings initiatives, productivity improvements, and disciplined product portfolio management. Looking ahead, we expect the operating environment to remain challenging as consumer confidence, affordability constraints, geopolitical uncertainty, and evolving tariff policies continue to weigh on industry demand and costs.\u201d<\/p>\n \nMr. Schmidt concluded, \u201cWhat gives me the greatest confidence in Flexsteel’s future is the progress we’re making strengthening our competitive advantages through consumer insights, innovation, and disciplined execution. These capabilities are increasingly working together as an integrated system, enabling us to translate consumer needs into differentiated products and compelling growth opportunities. Our recent Fall High Point Market introductions demonstrate this progress, including our next-generation SixFlexTM<\/sup> seating technology and Comfort ChoiceTM<\/sup> program, expansion of our wellness portfolio across multiple consumer life stages, continued innovation in our Flexsteel PulseTM<\/sup> immersive sound seating platform, and new offerings within our Flexsteel StatementsTM<\/sup> casegoods collection. While the external environment may remain difficult, we are not standing still. We are strengthening the core capabilities that have made Flexsteel a trusted brand for generations while creating new reasons for consumers and retailers to choose us. With a strong balance sheet, disciplined operating model, and clear strategic priorities, we remain confident in our ability to continue gaining share and creating sustainable long-term shareholder value.\u201d<\/p>\n Operating Results for the First Quarter Ended September 30, 2026<\/b><\/p>\n \nNet sales were $114.0 million for the first quarter compared to net sales of $110.4 million in the prior year quarter, an increase of $3.5 million, or 3.2%. The increase was driven by growth in Flexsteel branded soft seating products of $5.5 million, partially offset by a decline of $1.9 million in Homestyles ready-to-assemble products. Sales of Flexsteel branded casegoods products were relatively flat compared to the prior year period.<\/p>\n\n
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