Flexsteel's performance saw continued year-over-year growth in revenue and earnings per share, surpassing Wall Street expectations. The robust financial figures indicate significant operational improvements and sales volume leverage.

Revenue Performance by Segment

Segment	Q1 FY2025 Revenue	YoY Growth
Retail Stores	$79.0M	+13.3%
E-commerce	$25.0M	-13.3%

The retail segment outperformed with a notable 13.3% increase, driven by a diversified product mix. E-commerce sales experienced a decline, suggesting possible shifts in consumer purchasing channels.

Key Developments and Operational Highlights

Achieved a gross margin improvement of 200 basis points year-over-year, attributed to supply chain cost savings and enhanced product portfolio management.
Reduced SG&A expenses from 17.4% to 15.7% of net sales, reflecting efficiency gains.
Maintained a strong liquidity position with $54.9 million available under the credit line.

Executive Commentary

CEO Derek Schmidt expressed satisfaction with Flexsteel's strong start to fiscal 2025, citing strategic growth in core and expanded markets as key drivers of top-line performance. Schmidt reasserted the company's commitment to profitability through strategic investments and operational excellence, even amidst challenging macroeconomic conditions.

Forward Guidance

Flexsteel increased its fiscal year 2025 sales growth guidance from 2-6% to 3.5-6.5%, reflecting optimism in sustained sales momentum and operational margin improvement.

Stock Price Movement

Following the earnings release, Flexsteel's stock price saw a decrease of approximately 2.24%.

Flexsteel Industries continues to leverage strong operational efficiencies and market share gains to drive its financial performance. The increased guidance reflects management's confidence in its strategic direction and ability to navigate macroeconomic challenges.

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