Flexsteel Industries Reports 4.1% Net Sales Increase to $459.2 Million for Fiscal Year Ending June 30, 2026

Flexsteel Industries, Inc. reported a net sales increase of 4.1% for the fiscal year ending June 30, 2026, reaching $459.2 million, compared to $441.1 million in the previous year. The growth was primarily driven by a $28 million increase in sales of soft seating products, although this was partially offset by declines in sales of ready-to-assemble products and casegoods. The company's gross margin improved to 24.7%, up from 22.2% in the prior year, largely due to tariff refunds and a favorable product mix. Net income for the year was $33.1 million, or $6.07 per diluted share, compared to $20.2 million, or $3.55 per diluted share, in the previous fiscal year.

In terms of operational changes, Flexsteel's employee count stood at approximately 1,200 as of June 30, 2026, with around 900 employees based in Mexico. The company operates four manufacturing facilities in Mexico and has minimal export sales. The backlog of customer orders increased to $70.1 million, up from $66.5 million the previous year, indicating a growing demand for its products. The company continues to leverage artificial intelligence to enhance operational efficiency and effectiveness.

Strategically, Flexsteel has made significant adjustments to its supply chain and product offerings. The company has focused on optimizing its product portfolio and enhancing customer insights, which contributed to the improved gross margin. Additionally, Flexsteel has been navigating challenges related to tariffs, particularly those affecting its products sourced from Vietnam and manufactured in Mexico. The company is currently subject to a 25% tariff on many of its seating products, which is scheduled to increase to 30% in January 2027 unless modified.

Looking ahead, Flexsteel aims to maintain disciplined cost control while investing in capabilities that will drive long-term growth and shareholder value. The company has also entered into a new $30 million secured revolving credit facility to support its working capital needs, replacing its previous credit agreement. This new facility is expected to better align with the company's current and projected financial requirements. Flexsteel's management remains cautious about potential economic downturns and their impact on consumer spending, particularly in the discretionary furniture market.