The chart below shows how FLXS performed 10 days before and after its earnings report, based on data from the past quarters. Typically, FLXS sees a -0.20% change in stock price 10 days leading up to the earnings, and a +1.82% change 10 days following the report. On the earnings day itself, the stock moves by +1.67%. This data can give you a slight idea of what to expect for the next quarter's release.
Positive
Q2 Sales Growth Achievement: Sales growth of 8.4% in Q2 fiscal 2025, reaching $108.5 million, marking the 5th consecutive quarter of year-over-year growth and exceeding guidance of $103 million to $107 million.
Operating Margin Improvement: Operating margin improved to 6.1%, up from 4.6% in the prior year quarter, representing a 150 basis point increase and the 6th consecutive quarter of year-over-year adjusted operating margin improvement.
Strong Financial Health: Generated $6.7 million in operating cash flow during the quarter, ending with a cash balance of $11.8 million and no debt, reflecting strong financial health.
Retailer Appointment Growth: Retailer appointments increased by 18% compared to the prior year's market, indicating strong engagement and positive response to new product launches.
Remarkable Growth Achievement: Expansion initiatives contributed to a remarkable 92% year-over-year growth, showcasing the effectiveness of new product development and market strategies.
Negative
Adjusted Operating Income Analysis: Adjusted operating income was $6,700,000 or 6.1 percent of net sales, which, while an increase from the prior year, was significantly impacted by a $5,000,000 pretax gain from the sale of the Dublin facility, indicating underlying operational challenges.
Sales Decline Analysis: The home styles ready to assemble brand experienced a nearly 30% decline in sales, highlighting significant competitive pressures and market challenges in that segment.
Tariff Impact on Costs: Potential tariffs on Mexican imports could lead to an estimated $1,500,000 to $2,000,000 increase in monthly costs, posing a substantial risk to profitability and free cash flow.
Sales Growth Challenges: Despite overall sales growth of 8.4%, the company faces a soft industry demand environment, which could hinder future growth prospects and margin expansion.
Q3 Sales Growth Outlook: The guidance for Q3 sales growth is only projected at 3% to 7%, reflecting a slowdown compared to previous quarters and indicating potential headwinds in consumer demand.
Earnings call transcript: Flexsteel Q2 2024 earnings beat expectations
FLXS.O
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