Flexsteel Industries Reports 6.9% Sales Increase and Significant Profit Recovery for Fiscal Year Ending June 30, 2025

Flexsteel Industries, Inc. reported a net sales increase of 6.9% for the fiscal year ending June 30, 2025, reaching $441.1 million, up from $412.8 million in the previous year. The company's gross margin improved to 22.2%, a rise of 110 basis points from 21.1% in fiscal 2024, attributed to fixed cost leverage on higher sales and supply chain cost savings. Net income for the year was $20.2 million, or $3.55 per diluted share, compared to $10.5 million, or $1.91 per diluted share, in the prior year, reflecting a significant recovery in profitability.

The company experienced operational changes, including a $14.1 million impairment charge related to its Mexicali manufacturing facility, which was deemed not fully recoverable due to shifts in U.S. trade policy. Additionally, Flexsteel completed the sale of its Dublin, Georgia facility, generating a pre-tax gain of $5.0 million, and sold two ancillary buildings from its Huntingburg, Indiana distribution center, resulting in gains of $0.7 million and $3.7 million, respectively. These strategic moves are part of Flexsteel's ongoing efforts to optimize its manufacturing and distribution capabilities.

Flexsteel's workforce remained stable, with approximately 1,400 employees as of June 30, 2025, including 30 employees in Asia to oversee quality control for overseas suppliers. The company operates four manufacturing facilities in Mexico, with a total of 1,061,000 square feet, and has not yet begun operations in the Mexicali facility, which is currently being subleased. The company reported a customer backlog of $66.5 million, an increase from $59.5 million in the previous year, indicating strong demand for its products.

Looking ahead, Flexsteel aims to maintain financial agility and build a foundation for long-term growth across both retail and e-commerce channels. The company is focused on enhancing its global supply chain resilience, operational excellence, and digital capabilities while reimagining the customer experience. However, the company also faces potential challenges from ongoing tariff changes and inflationary pressures on raw materials, which could impact future profitability and operational costs. Flexsteel is actively assessing strategies to mitigate these risks as it navigates the evolving market landscape.