Flexsteel Industries reports Q2 EPS 57c vs. 53c last year

Reports Q2 revenue $100.1M vs. $93.1M last year. “I am very pleased with our second quarter results, which are consistent with the preliminary results announced on January 11th,” said Jerry Dittmer, CEO. “While headwinds persist in our industry largely due to shifts in discretionary consumer spending towards experiences and away from home furnishings, we are competing well and growing both our top and bottom line. We delivered strong net sales of $100.1 million, or growth of 7.5%, which was slightly above our sales guidance range of $94 to $100 million. Comparisons to prior year continued to be adversely impacted by the elimination of ocean freight surcharges in the prior year when ocean container delivery costs were inflated. Excluding the approximately $3.5 million impact from surcharge reductions, growth from unit volume and sales mix was an impressive 11.7% in the quarter, reflecting our strong sales execution. In addition, we are executing well operationally and leveraging the combined benefits of continued productivity and cost savings, pricing discipline, and ongoing product portfolio management, to meaningfully expand gross margin and improve operating income. Our operating margin of 4.6% in the second quarter was a significant improvement compared to the first quarter and prior year quarter, and above our guidance range of 2% to 4%. Lastly, we are making strong progress in improving working capital efficiency. Given improved demand stability and better supplier lead times, we optimized and reduced our inventories by $15.6 million in the second quarter while continuing to provide exceptional service levels to customers. Our strategies are working, and we’re seeing the outcomes in our improved financial performance. I’m encouraged by these second quarter results and excited about the direction we are headed. We are executing well on multiple fronts, but we are not done, and I am confident in our ability to continue growing profitably, generating cash, and creating significant value for our customers and shareholders long-term.”