Flexsteel Industries, Inc. reported a net sales increase of 6.2% for the quarter ending September 30, 2025, reaching $110.4 million compared to $104.0 million in the same period last year. The company's gross profit also saw a significant rise, amounting to $25.9 million, up from $22.4 million, resulting in a gross margin of 23.5%, an increase of 200 basis points from the previous year. Operating income improved to $9.0 million, compared to $6.0 million in the prior year, while net income surged to $7.3 million, or $1.31 per diluted share, compared to $4.1 million, or $0.74 per diluted share, in the same quarter of 2024.
In terms of operational changes, Flexsteel's home furnishings backlog increased by 9.8% to $67 million as of September 30, 2025, compared to $61 million a year earlier. The company noted that the growth in net sales was primarily driven by sourced soft seating products, although this was partially offset by a decline in unit volume for made-to-order soft seating products and the homestyles branded ready-to-assemble category. Selling, general, and administrative expenses rose to $17.0 million, reflecting investments in growth initiatives, but as a percentage of net sales, these expenses decreased to 15.4% from 15.7% in the prior year.
Flexsteel's balance sheet showed total assets of $281.5 million as of September 30, 2025, slightly down from $282.5 million at the end of June 2025. Current assets increased to $175.4 million, driven by a rise in other current assets, while current liabilities decreased to $58.5 million, resulting in a working capital increase to $116.9 million. The company reported no outstanding borrowings under its credit agreement, which has been amended to reduce the maximum revolving line of credit to $55 million, aligning with current borrowing needs.
Looking ahead, Flexsteel's management expressed optimism about future performance, citing the favorable impact of foreign currency translation on its operations in Mexico and a strong backlog of orders. The effective tax rate for the quarter was reported at 21.9%, a decrease from 31.0% in the prior year, attributed to a combination of state taxes, foreign operations, and credits for research and development. The company continues to evaluate the potential impacts of recent tax legislation on its financial results for fiscal 2026 and beyond.
About FLEXSTEEL INDUSTRIES INC
Flexsteel Industries, Inc. is a leading U.S. manufacturer and importer of residential furniture, offering sofas, beds, tables, and outdoor products. Its core business involves designing, sourcing, and distributing a broad range of furniture through retail and e-commerce channels. The company leverages proprietary patents, manufacturing in Mexico, and a diverse supplier network to compete on quality, style, and value in a highly fragmented industry.
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