Flexsteel Industries, Inc. (NASDAQ: FLXS) announced on October 21, 2025 that it delivered a strong first quarter of fiscal 2026, reporting net sales of $110.4 million—an increase of 6.2% year‑over‑year. Operating income rose to $9.0 million, giving the company an operating margin of 8.1%, while net income reached $7.3 million, translating to earnings per share of $1.31.
The company’s gross margin expanded to 23.5% from 21.5% in the same quarter a year earlier, a 200‑basis‑point gain driven by sales leverage and favorable foreign‑currency translation of its peso‑denominated assets in Mexico. This margin improvement underscores the effectiveness of Flexsteel’s pricing and cost‑control initiatives.
Operating‑expense management continued to support profitability, with selling, general and administrative expenses falling to 15.4% of net sales from 15.7% a year earlier. The reduction was largely attributable to leverage on higher sales, partially offset by investments in growth initiatives such as new product launches and marketing programs.
In its commentary, the company noted that a new Section 232 tariff—effective October 14, 2025—imposes a 25% duty on imported upholstered furniture, which will likely increase prices and compress margins in the short term. Flexsteel emphasized its financial strength and readiness to adapt to these regulatory changes while maintaining its growth trajectory.
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