FLXS

Flexsteel Industries, Inc. FLXS closed fiscal 2026 with another quarter of sales growth, but management used the fourth-quarter call to emphasize a tougher near-term backdrop. CEO Derek Schmidt and CFO Michael Ressler pointed to uneven demand, rising energy-linked costs and fluid tariff conditions entering fiscal 2027. First-quarter guidance assumes mitigation actions will mostly offset inflation, though some margin dilution remains possible. CFO Michael Ressler guided first-quarter fiscal 2027 sales in the range of $111 million to $115 million, or 1% to 4% year-over-year growth. He expects soft seating growth to outweigh declines from the homestyles category being exited. Ressler said consumer demand is the largest source of sales variability. Elevated energy prices have raised costs across raw materials, sourced finished goods, domestic transportation and inbound ocean freight. The CFO said pricing and cost actions should mostly offset inflation, but the margin impact will depend on the severity of cost increases and effectiveness of mitigation. Fourth-quarter net sales were $115.4 million, up 0.7% year over year. Adjusted earnings of $1.33 topped the Zacks Consensus Estimate of $1.15, and revenues of $115.4 million exceeded the consensus estimate of $114 million by 1.20%. Flexsteel Industries, Inc. price-consensus-eps-surprise-chart | Flexsteel Industries, Inc. Quote CFO Michael Ressler said average pricing was up about 10% to 11% from the prior-year quarter. Unit volumes declined overall, but not enough to offset pricing actions. Ressler highlighted unit growth in Health and Wellness, including Zecliner and Zen chairs, and strategic accounts. He said made-to-order remained challenged, while case goods were softer and national-account growth ambitions were scaled back. CFO Michael Ressler said the homestyles ready-to-assemble business generated roughly $12 million of fiscal 2026 sales and had lower gross profitability than the company’s category average. Ressler said excluding homestyles would have lifted fourth-quarter growth to about 2.3%. CEO Derek Schmidt added that fiscal 2026 growth would have been closer to 6.5% to 7% without the category’s drag. Ressler expects a modest profitability benefit from the exit. The company plans to monetize remaining inventory over three to six months and prepare its Huntingburg, Indiana, distribution center for sale. CEO Derek Schmidt said investments in consumer insights, innovation, product development and marketing are improving Flexsteel’s ability to bring relevant products to market and support retail partners. CFO Michael Ressler said SG&A should run in the high-15% to low-16% range as the company balances spending discipline with investments supporting organic growth. When a Sidoti analyst asked about more value-conscious higher-income consumers, Schmidt said Flexsteel is not changing its strategy or marketing message. The CEO said differentiated innovation remains the focus. A Sidoti analyst pressed management on gross margins amid freight and input-cost inflation. CFO Michael Ressler emphasized cost savings and modest pricing, while noting that demand will influence how much pricing the market can absorb. CEO Derek Schmidt clarified that the 6.5% to 7% first-quarter operating-margin guidance is not a new normal or a floor. He said structural profitability improvements from portfolio management, productivity and cost discipline remain intact. On capital allocation, Ressler said Flexsteel will preserve balance-sheet flexibility, fund organic growth and evaluate M&A only when returns exceed its cost of capital. Otherwise, excess capital can fund dividends and repurchases. CEO Derek Schmidt characterized the near-term environment as challenging, with uneven demand, inflationary pressure and elevated geopolitical and trade uncertainty shaping visibility. Schmidt said Flexsteel’s priorities remain unchanged: serve customers, advance innovation, strengthen the brand, improve productivity and allocate capital thoughtfully. His closing message centered on operating discipline while continuing investments intended to support longer-term share gains and shareholder value creation. FLXS carries a Zacks Rank #3 (Hold), with a Value Score of B and Growth, Momentum and VGM Scores of A. Under the Zacks framework, A and B Style Scores are more favorable, while VGM combines value, growth and momentum characteristics. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. A Zacks Rank #3 is less favorable than the #1 and 2 (Buy) ranks that Style Scores complement most strongly. The Zacks Rank can change as earnings estimates are revised after the just-reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Flexsteel Industries, Inc. (FLXS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Net Sales (Q4 FY2026): $115.4 million, a 0.7% increase year-over-year. Fiscal Year 2026 Sales: Approximately $459 million, a 4% increase over the prior year. Adjusted Operating Margin (Q4 FY2026): 7.1%, compared to 9.0% in the prior-year quarter. Adjusted Operating Margin (FY2026): Approximately 7.5%. GAAP Operating Income (Q4 FY2026): $16.3 million, or 14.2% of sales, including a 780-basis point benefit from IEEPA tariff refunds. Adjusted Earnings per Diluted Share (FY2026): Record $4.94. Free Cash Flow (FY2026): More than $47 million. Sales Order Backlog: $70.1 million at the end of the quarter, up approximately 5.5% year-over-year but down 11.8% sequentially. Product Line Sales (Q4 FY2026): Soft seating products increased by $2.9 million; ready-to-assemble products (HomeStyles brand) declined by $1.8 million; Flexsteel-branded case goods declined by roughly $0.3 million. Cash Balance: $16.7 million at the end of the quarter, with no bank debt. Q1 FY2027 Outlook: Net sales projected at $111 million to $115 million (1% to 4% growth); operating margin expected in the range of 6.5% to 7.0%. Warning! GuruFocus has detected 7 Warning Signs with WHITF. Is FLXS fairly valued? Test your thesis with our free DCF calculator. Release Date: August 18, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Flexsteel Industries Inc (NASDAQ:FLXS) delivered record adjusted earnings per diluted share of $4.94 and generated over $47 million in free cash flow for fiscal year 2026. The company achieved its 11th consecutive quarter of year-over-year sales growth, with net sales reaching $115.4 million in Q4. Adjusted operating margins remained strong at 7.1% for the quarter and 7.5% for the full year, reflecting disciplined pricing and operational productivity. Strategic growth initiatives, including the Health & Wellness category and new Zecliner chairs, continued to outperform the broader business and drive unit volume growth. The company maintains a strong balance sheet with no bank debt, enabling a 25% dividend increase and continued share repurchases. Management's decision to exit the underperforming HomeStyles ready-to-assemble category is expected to improve overall portfolio profitability and streamline operations. Consumer demand remains uneven and subdued, with affordability pressures impacting discretionary spending across all income levels. The company faces material supply chain inflation driven by elevated energy prices, impacting raw materials, transportation, and ocean freight costs. The tariff environment remains highly fluid, creating uncertainty around future trade policy and potential changes to existing tariff structures. Adjusted operating margin in Q4 declined to 7.1% from 9.0% in the prior-year quarter, partly due to the absence of a favorable foreign currency benefit. The exit of the HomeStyles brand will result in a sales decline of approximately $12 million annually, with associated one-time costs for employee termination and inventory liquidation. Near-term visibility is limited, and the company expects industry conditions to remain challenging as it enters fiscal year 2027. Q: Can you provide details on the impact of pricing versus volume in the fourth quarter, and where are you seeing unit volume growth or declines?A: Mike Ressler (CFO): Pricing in Q4 was up roughly 10% to 11% year-over-year, but volume declines were not as severe as expected given the magnitude of the increases. Unit volumes are up in strategic growth areas like the Health & Wellness category, the Zecliner product line, and with strategic accounts. Volumes are down in major retail channels and case goods, where we have scaled back growth ambitions with national accounts. Q: What was the annual sales contribution of the HomeStyles brand, and what is the expected bottom-line impact as you exit this category?A: Mike Ressler (CFO): HomeStyles generated approximately $12 million in sales in fiscal year 2026. The category was lower performing in terms of gross profit versus the company average. As we exit the business, we expect a modest improvement in overall portfolio profitability despite the sales decline. Derek Schmidt (CEO) added that excluding the HomeStyles drag, overall company sales growth would have been closer to 6.5% to 7% for the year, versus the reported 4%. Q: How are you adapting your product portfolio and marketing strategy given that even higher-income consumers are becoming more value-conscious?A: Derek Schmidt (CEO): We are not changing our strategy or marketing message. We continue to focus on understanding the needs of our target consumers and driving innovation to meet those needs better than competitors. While consumers across all income levels are more cautious due to rising inflation, our marketing message remains centered on why our innovation is differentiated and serves their needs better than the competition. Q: What are the puts and takes for gross margins going forward, given the cost pressures from ocean freight, raw materials, and transportation?A: Mike Ressler (CFO): We are experiencing inflation on raw materials (poly, plywood, steel), freight, transportation, and sourced finished products, with recent spikes in ocean freight rates. We have implemented cost savings initiatives and a modest price increase to mitigate these pressures. We believe our Q1 guidance of 6.5% to 7% operating margin represents a new normal or even a floor. Derek Schmidt (CEO) added that the company has made substantial structural improvements to profitability, but the near-term external environment will determine the pace of further margin improvement. Q: How should we model SG&A spending going forward?A: Mike Ressler (CFO): We will continue to be prudent in managing SG&A spending while investing in areas that enable us to gain share and strengthen our competitive advantage. For modeling purposes, expect SG&A in the high 15% to low 16% range of sales. Q: What are your capital allocation priorities going forward?A: Mike Ressler (CFO): Our priorities remain intact. We will maintain a strong balance sheet for flexibility, continue funding organic growth investments, and evaluate M&A opportunities that deliver ROI above our cost of capital. If no such opportunities exist, we will return excess capital to shareholders through dividends and share repurchases. Q: Can you confirm the magnitude of the revenue impact from exiting the ready-to-assemble (RTA) category?A: Mike Ressler (CFO): The HomeStyles RTA category contributed approximately $12 million in sales for fiscal year 2026. Derek Schmidt (CEO) confirmed the company is exiting this category. Q: Despite the exit from the RTA category, do you still expect revenue growth in the first quarter of fiscal 2027?A: Derek Schmidt (CEO): Yes, that is correct. We expect Q1 fiscal 2027 net sales of $111 million to $115 million, representing 1% to 4% growth versus the prior-year quarter. We anticipate sales growth from soft seating products to outweigh the sales declines from the exiting HomeStyles RTA category. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Flexsteel Industries, Inc.? Here are five stocks we like better. Fiscal 2026 sales rose 4% to approximately $459 million, while adjusted operating margin reached about 7.5%, adjusted diluted EPS hit a record $4.94, and free cash flow exceeded $47 million. Fourth-quarter operating income benefited significantly from a 780-basis-point tariff-refund impact. Excluding the refund and Homestyles exit costs, adjusted operating margin declined to 7.1% from 9% a year earlier. Flexsteel exited its roughly $12 million Homestyles ready-to-assemble business to improve portfolio profitability, and forecast fiscal Q1 2027 sales of $111 million to $115 million with a 6.5% to 7% operating margin amid inflation and supply-chain pressures. Hooker Furnishings Discount To Book, A Value Play? Flexsteel Industries (NASDAQ:FLXS) reported fourth-quarter fiscal 2026 net sales of $115.4 million, up 0.7% from $114.6 million a year earlier, as growth in soft seating products offset declines in ready-to-assemble and case goods categories. Management said the furniture market remained difficult amid uneven consumer demand, inflation and geopolitical uncertainty. For the full fiscal year, the company generated approximately $459 million in sales, a 4% increase from the prior year. President and Chief Executive Officer Derek Schmidt said Flexsteel expanded adjusted operating margin to about 7.5%, produced record adjusted diluted earnings per share of $4.94 and generated more than $47 million in free cash flow. → AMG’s Alternatives Boom Powers Record Growth Flexsteel Is Flexing Its Muscles, Again “While the operating environment became increasingly challenging throughout the year, particularly during the second half, our team continued to execute at a high level and delivered another year of strong financial and strategic progress,” Schmidt said. Fourth-quarter GAAP operating income was $16.3 million, or 14.2% of sales, compared with $14 million, or 12.2% of sales, in the year-earlier period. The reported operating margin included a 780-basis-point benefit from refunds of previously paid IEEPA tariffs, which the company recorded as a reduction in cost of goods sold. → Microsoft's Maia 300 Chip Targets NVIDIA's AI Dominance Flexsteel Flexes Its Muscles In The Second-Quarter The quarter also included a 70-basis-point negative effect from Flexsteel’s exit from its Homestyles ready-to-assemble product category, including employee separation costs, inventory liquidations and write-downs. Excluding the tariff refunds and Homestyles exit costs, adjusted operating margin was 7.1%, compared with 9% in the prior-year quarter. The prior-year period benefited from a 160-basis-point favorable foreign-currency translation impact. Chief Financial Officer Mike Ressler said the company’s product pricing was up approximately 10% to 11% on average from the prior year. Although unit volumes declined overall, he said they did not fall enough to outweigh pricing actions. → The Metals Company’s Big Bet Now Comes Down to a License Ressler said volumes rose in several strategic growth initiatives, including Flexsteel’s health and wellness category, Zecliner products, new Zen chairs and certain strategic accounts. Made-to-order products and case goods were weaker, however. During the quarter, Flexsteel decided to exit the Homestyles ready-to-assemble category, which management said had become increasingly competitive and was no longer generating attractive returns. The business contributed roughly $12 million in fiscal 2026 sales. The company expects to monetize the remaining Homestyles inventory over the next three to six months and prepare its Huntingburg, Indiana, distribution center for sale. The facility currently serves the ready-to-assemble category and is not required for Flexsteel’s longer-term growth plans, Ressler said. Homestyles had lower gross profitability than the company’s category average, according to management. While the exit will reduce sales, Ressler said it should provide a modest improvement in overall portfolio profitability. Schmidt said fiscal 2026 sales growth would have been closer to 6.5% to 7% excluding the Homestyles drag, compared with the reported 4% increase. Flexsteel ended the quarter with $16.7 million of cash, $94.6 million of working capital and no bank debt. Operating cash flow totaled $24.3 million in the quarter, supported by net income and working-capital management. The company repurchased approximately 1.3 million shares for $62.6 million during the quarter and paid $1.1 million in cash dividends, or $0.20 per share. Management also noted that Flexsteel recently increased its dividend by 25%. Ressler said capital-allocation priorities remain maintaining a strong balance sheet, funding investments in consumer insights, innovation, product development and marketing, and evaluating acquisition opportunities that can generate returns above the company’s cost of capital. If such opportunities are unavailable, the company expects to return excess capital through dividends and share repurchases. For the first quarter of fiscal 2027, Flexsteel projected net sales of $111 million to $115 million, representing growth of 1% to 4% from the prior-year quarter. The company expects growth in soft seating to outweigh sales declines from the discontinued Homestyles category. Flexsteel forecast operating margin of 6.5% to 7% for the quarter. Management cited inflation affecting raw materials, sourced finished goods, domestic transportation and inbound ocean freight since the beginning of the Middle East conflict. The company has implemented cost-saving measures and a modest price increase in an effort to offset those pressures. “We anticipate our mitigation actions to mostly offset cost inflation,” Ressler said, while noting that gross and operating margins could face some pressure depending on the severity of supply-chain inflation and the effectiveness of mitigation efforts. Management expects selling, general and administrative expense to be in the high-15% to low-16% range as a percentage of sales, while continuing to fund growth investments. Schmidt said Flexsteel is maintaining its strategy despite consumer caution and a fluid tariff environment, emphasizing product innovation, productivity, brand investment and disciplined cost management. Flexsteel Industries, Inc (NASDAQ: FLXS) is a U.S.-based furniture manufacturer specializing in the design, production, and marketing of residential upholstered furniture and wood casegoods. The company operates through two primary segments: Upholstery, which encompasses seating products such as sofas, loveseats, chairs, recliners, and sectionals; and Casegoods, which includes accent and occasional tables, cabinets, bookcases, and other wood-based furnishings. Flexsteel sells its products through a network of independent retailers, furniture stores, and distributors across North America. Flexsteel's upholstery segment is distinguished by its patented Blue Steel Spring® technology, which offers enhanced longevity and comfort by replacing conventional webbing and springs with a welded steel seat suspension. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Flexsteel Industries Q4 Earnings Call Highlights" was originally published by MarketBeat. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Revenue growth of 27.3% was primarily driven by a structural shift in customer demand toward AI-driven drug discovery (AIDD) and high-throughput protein expression. Management attributes the record adjusted net profit growth of over 200% to improved business quality and operating leverage from long-term investments in automation and digital capacity. The Life Science Group (LSG) achieved a 29.5% adjusted operating margin, marking a transition from an investment phase to a scale-and-profitability phase. AI-driven demand is transforming the business model from one-off transactional projects to recurring, high-volume data generation partnerships with tech companies and AI-native biotechs. Operational efficiency was enhanced by equipping approximately 60% of labs with AI-driven automated workstations, enabling industry-leading 4-day turnaround times for gene-to-protein validation. The company is positioning itself as a critical infrastructure provider for the 'AI for Science' era, focusing on closing the loop between digital design and biological execution. Full-year revenue growth guidance for the Life Science segment was raised to 25%-30%, reflecting strong visibility into AIDD-related order momentum. AIDD orders are projected to double in the second half of 2026, with management expecting this hyper-growth trajectory to compound over the next several years. The company expects to achieve positive EBITDA for the ProBio CDMO segment by 2027, supported by a 54% year-over-year increase in new orders. CapEx for 2026 is projected at approximately USD 130 million, focused on doubling throughput capacity every quarter to meet surging AI-driven validation demand. Management assumes that the premium margins for AIDD services (roughly 20 points higher than traditional protein orders) will remain sustainable due to the high value of model-ready data. Prior period figures were adjusted to exclude the financial impact of the Renova license transaction to provide a more objective view of underlying performance. Management identified the primary industry bottleneck as the validation of AI-generated designs, which traditional experimental workflows are not equipped to handle at scale. The company maintains a robust cash position of approximately USD 830 million, stating there is no immediate need for incremental financing despite aggressive capacity expansion. Tariff refunds in the U.S. impacted gross margins, with adjusted figures provided to show the underlying operational improvement excluding these one-time effects. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Growth is driven by a combination of AIDD demand, a higher-quality customer base shifting to multi-stage partnerships, and returns on previous automation investments. Management noted that AIDD programs require exponentially higher throughput and continuous engagement compared to traditional discovery. Current guidance is described as prudent, with potential for further upside if the trend of complex, recurring AIDD projects continues to accelerate. Management claims a clear advantage in speed and data quality, delivering binding data in 4 to 7 days compared to an industry average of over 2 weeks. GenScript captures more than twice the revenue per delivered item versus its primary competitor by focusing on end-to-end validation rather than just DNA fragments. The company's modular workstation infrastructure allows for faster capacity expansion with lower capital intensity than large-format systems. These customers require validation for thousands of candidate sequences in a single iteration, necessitating a shift from 'months' to 'days' in feedback loops. The deliverable for these clients is not just a biological construct but high-quality experimental data used to retrain and improve AI models. This segment is viewed as a structural long-term driver because it embeds GenScript into the customer's core R&D digital infrastructure.

Flexsteel Industries (FLXS) came out with quarterly earnings of $1.33 per share, beating the Zacks Consensus Estimate of $1.15 per share. This compares to earnings of $1.4 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +15.65%. A quarter ago, it was expected that this furniture maker would post earnings of $0.75 per share when it actually produced earnings of $1.14, delivering a surprise of +52%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Flexsteel, which belongs to the Zacks Furniture industry, posted revenues of $115.37 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.17%. This compares to year-ago revenues of $114.61 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Flexsteel shares have added about 86.9% since the beginning of the year versus the S&P 500's gain of 13.7%. While Flexsteel has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Flexsteel was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.11 on $111.1 million in revenues for the coming quarter and $5.05 on $472.48 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Furniture is currently in the top 10% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. La-Z-Boy (LZB), another stock in the same industry, has yet to report results for the quarter ended July 2026. The results are expected to be released on August 18. This furniture company is expected to post quarterly earnings of $0.48 per share in its upcoming report, which represents a year-over-year change of +2.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. La-Z-Boy's revenues are expected to be $499.66 million, up 1.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Flexsteel Industries, Inc. (FLXS) : Free Stock Analysis Report La-Z-Boy Incorporated (LZB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

DUBUQUE, Iowa, August 17, 2026--(BUSINESS WIRE)--Flexsteel Industries, Inc. (NASDAQ: FLXS) ("Flexsteel" or the "Company"), one of the largest manufacturers, importers, and marketers of residential furniture products in the United States, today reported fourth quarter and fiscal year 2026 results. Key Results for the Fourth Quarter and Fiscal Year Ended June 30, 2026 Net sales for the quarter of $115.4 million compared to $114.6 million in the prior year quarter, an increase of 0.7%. For the year, net sales increased 4.1% to $459.2 million compared to $441.1 million in the prior year. GAAP operating income of $16.3 million or 14.2% of net sales for the fourth quarter and $42.6 million or 9.3% of net sales for the year compared to $14.0 million or 12.2% of net sales in the prior year quarter and $26.6 million or 6.0% of net sales for the prior year. GAAP net income per diluted share of $2.58 for the current quarter and $6.07 for the year compared to net income per diluted share of $1.89 for the prior year quarter and net income per diluted share of $3.55 for the prior year. The Company generated $24.3 million of cash flow from operations and completed $62.6 million of share repurchases in the fourth quarter. Management Commentary "Fiscal year 2026 was a year of strong financial performance and meaningful strategic progress despite increasingly difficult industry conditions," said Derek Schmidt, CEO of Flexsteel Industries, Inc. "For the year, we delivered sales growth of approximately 4 percent to $459 million, expanded adjusted operating margin to 7.5 percent, generated record adjusted earnings per diluted share of $4.94, and produced more than $47.5 million of free cash flow. Our strong cash generation and balance sheet enabled us to repurchase approximately $64 million of stock during the year and recently increased our dividend by 25 percent. These results were achieved despite a challenging demand environment, evolving tariff policies, geopolitical uncertainty, and rising inflationary pressures, demonstrating the resilience of our business model and the agility of our organization." Mr. Schmidt continued, "While fourth quarter sales were only modestly above the prior year period, it was our eleventh consecutive quarter of year-over-year growth, driven by our key growth initiatives which continue to perform well. Our health and wellness category, strategic account relationships, and recent product introductions all delivered positive contributions during the quarter despite softer overall industry demand. Consumer demand for furniture remains pressured by weak confidence, affordability constraints, and macroeconomic uncertainty related to the ongoing conflict in the Middle East. Even consumers shopping at higher price points have become increasingly value-conscious in today's environment. Despite these headwinds, we delivered strong adjusted operating margin of approximately 7.1 percent in the quarter, reflecting disciplined product portfolio management, operational productivity improvements, and prudent management of selling and administrative expenses while continuing to fund critical growth investments." Mr. Schmidt concluded, "Beyond the financial results, we made significant progress strengthening the long-term competitive position of the Company. We continued to expand our capabilities in consumer insights, innovation, product development, and marketing, enabling us to bring more relevant products to market and drive stronger engagement with both consumers and retail partners. Looking ahead, we remain measured in our outlook as macroeconomic uncertainty, elevated inflation, rising energy costs, and trade policy uncertainty continue to pressure industry demand and profitability. While near-term conditions may remain challenging, our strategy and priorities are unchanged. We will continue to operate with agility, maintain disciplined cost control, and invest in the capabilities that we believe will drive long-term growth, market share gains, and shareholder value creation. With a strong balance sheet, a resilient operating model, and clear strategic priorities, we believe Flexsteel is well positioned to successfully navigate the current environment and emerge even stronger over time." Operating Results for the Fourth Quarter Ended June 30, 2026 Net sales were $115.4 million for the fourth quarter compared to net sales of $114.6 million in the prior year quarter, an increase of $0.8 million, or 0.7%. The increase was driven by higher unit volume from soft seating products, partially offset by decreases in our ready-to-assemble products sold under the homestyles brand. Gross margin for the quarter ended June 30, 2026, was 30.0%, compared to 23.9% for the prior year quarter, an increase of 610 basis points ("bps"). The 610-bps increase was primarily due to a 780-bps benefit from IEEPA Tariff Refunds received, offset by a 100-bps unfavorable impact of foreign currency translation of our peso-denominated assets in Mexico versus the prior period, and a 70-bps unfavorable cost impact related to the decision to exit our ready-to-assemble product category sold under the homestyles brand. Selling, general and administrative (SG&A) expense was 15.8% of net sales for the quarter ended June 30, 2026, compared to 15.0% in the prior year quarter. The 80-bps increase was due to incremental investments in consumer insights, innovation, new products, and marketing to maintain our growth momentum. Operating income for the quarter ended June 30, 2026, was $16.3 million compared to $14.0 million in the prior year quarter. On an adjusted basis, operating income for the quarter ended June 30, 2026, was $8.2 million compared to $10.3 million in the prior year quarter. Income tax expense was $3.8 million, or an effective rate of 23.0%, during the fourth quarter compared to tax expense of $3.6 million, or an effective rate of 25.0%, in the prior year quarter. Net income was $12.7 million, or $2.58 per diluted share, for the quarter ended June 30, 2026, compared to net income of $10.7 million, or $1.89 per diluted share, in the prior year quarter. On an adjusted basis, net income for the quarter ended June 30, 2026, was $6.6 million or $1.33 per diluted share compared to adjusted net income of $7.9 million or $1.40 per diluted share in the prior year quarter. Liquidity The Company ended the quarter with a cash balance of $16.7 million, working capital (current assets less current liabilities) of $94.6 million, and availability of approximately $54.1 million under its secured line of credit. Capital expenditures for the year ended June 30, 2026, were $3.9 million. Financial Outlook For the first quarter of fiscal year 2027, the Company expects sales growth of 1% to 4% compared to the prior year quarter and operating margin of 6.5% to 7%. The most significant drivers of variability in the financial outlook are consumer demand and logistics and material cost inflation driven by elevated energy prices. Conference Call and Webcast The Company will host a conference call and audio webcast with analysts and investors on Tuesday, August 18, 2026, at 8:00 a.m. Central Time to discuss the results and answer questions. Live conference call: 833-816-1123 (domestic) or 412-317-0710 (international) Conference call replay available through August 25, 2026: 855-669-9658 (domestic) or 412-317-0088 (international) Replay access code: 7455617 Live and archived webcast: ir.flexsteel.com To pre-register for the earnings conference call and avoid the need to wait for a live operator, investors can visit https://dpregister.com/sreg/10210984/1049369efa0 and enter their contact information. Investors will then be issued a personalized phone number and PIN to dial into the live conference call. About Flexsteel Flexsteel Industries, Inc. and Subsidiaries (the "Company," "Flexsteel," or "Our") is one of the largest residential furniture manufacturers, importers, and marketers in the U.S. Flexsteel addresses different consumer groups through our core brand, Flexsteel, and several category-specific sub-brands: Zecliner, Statements, Zen, Perfect Match, and Pulse, all of which have unique value propositions tailored to specific consumer needs. We offer a wide assortment of product solutions for different areas within the home including stationary and motion sofas, loveseats, chairs, and sectionals, as well as bedroom furniture, dining tables and chairs, occasional and entertainment tables, and kitchen storage. For more than 130 years, Flexsteel has strived to create strong consumer value with unmatched quality, comfort, and durability, backed by innovation and highlighted by its patented Blue Steel Spring technology, designed to deliver lasting comfort and support. Today, Flexsteel products are available nationwide through retail partners and online channels. Forward-Looking Statements Statements, including those in this release, which are not historical or current facts, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. There are certain important factors that could cause the Company’s results to differ materially from those anticipated by some of the statements made herein. Investors are cautioned that all forward-looking statements involve risk and uncertainty. Some of the factors that could affect results are the cyclical nature of the furniture industry, supply chain disruptions, litigation, the effectiveness of new product introductions and distribution channels, the product mix of sales, pricing pressures, the cost of raw materials and fuel, changes in foreign currency values, retention and recruitment of key employees, actions by governments including laws, regulations, taxes and tariffs, the amount of sales generated and the profit margins thereon, competition (both U.S. and foreign), credit exposure with customers, participation in multi-employer pension plans, disruptions or security breaches to business information systems, the impact of any future pandemic, and general economic conditions. For further information regarding these risks and uncertainties, see the "Risk Factors" section in Item 1A of our most recent Annual Report on Form 10-K. For more information, visit our website at http://www.flexsteel.com. NON-GAAP DISCLOSURE (UNAUDITED) The Company is providing information regarding adjusted operating income, adjusted operating margin, adjusted net income, and adjusted diluted earnings per share of common stock, which are not recognized terms under U.S. Generally Accepted Accounting Principles ("GAAP") and do not purport to be alternatives to operating income, net income, or diluted earnings per share of common stock as a measure of operating performance. A reconciliation of adjusted operating income, adjusted operating margin, adjusted net income, and adjusted diluted earnings per share of common stock is provided below. Management believes the use of these non-GAAP financial measures provides investors with useful information to analyze and compare performance across periods excluding the items which are considered by management to be extraordinary or one-time in nature. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies. Reconciliation of GAAP operating income to adjusted operating income and GAAP operating margin to adjusted operating margin: The following table sets forth the reconciliation of the Company’s reported GAAP operating income to the calculation of adjusted operating income for the three and twelve months ended June 30, 2026 and 2025: Reconciliation of GAAP net income to adjusted net income: The following table sets forth the reconciliation of the Company’s reported GAAP net income to the calculation of adjusted net income for the three and twelve months ended June 30, 2026 and 2025: Reconciliation of GAAP diluted earnings per share of common stock to adjusted diluted earnings per share of common stock: The following table sets forth the reconciliation of the Company’s reported GAAP diluted earnings per share to the calculation of adjusted diluted earnings per share for the three and twelve months ended June 30, 2026 and 2025: View source version on businesswire.com: https://www.businesswire.com/news/home/20260817174816/en/ Contacts INVESTOR CONTACT:Michael Ressler, Flexsteel Industries, [email protected]

Flexsteel Industries, Inc. (NASDAQ:FLXS) announced strong profits, but the stock was stagnant. Our analysis suggests that this might be because shareholders have noticed some concerning underlying factors. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. To properly understand Flexsteel Industries' profit results, we need to consider the US$3.7m gain attributed to unusual items. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. Which is hardly surprising, given the name. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is). That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Arguably, Flexsteel Industries' statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Flexsteel Industries' true underlying earnings power is actually less than its statutory profit. But the good news is that its EPS growth over the last three years has been very impressive. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For instance, we've identified 2 warning signs for Flexsteel Industries (1 is a bit unpleasant) you should be familiar with. Today we've zoomed in on a single data point to better understand the nature of Flexsteel Industries' profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.