Flexsteel Industries, Inc. reported its financial results for the second quarter and first half of fiscal year 2026, revealing a net sales increase of 9.0% to $118.2 million for the quarter ended December 31, 2025, compared to $108.5 million in the same period last year. For the six months, net sales rose 7.6% to $228.7 million from $212.5 million. The company's gross profit margin improved to 22.7% for the quarter and 23.1% for the six months, up from 21.0% and 21.3%, respectively, driven by a favorable sales mix of higher-margin products, despite the impact of tariffs.
In terms of profitability, Flexsteel's net income for the quarter was $6.6 million, or $1.18 per diluted share, down from $9.1 million, or $1.62 per diluted share, in the prior year. The decrease in net income was attributed to a prior year gain from the sale of the company's Dublin, Georgia facility. For the six-month period, net income increased to $14.0 million, or $2.49 per diluted share, compared to $13.2 million, or $2.38 per diluted share, in the previous year.
The company experienced a rise in selling, general, and administrative (SG&A) expenses, which increased to $17.8 million for the quarter, up from $16.1 million, primarily due to investments in growth initiatives. SG&A as a percentage of net sales was 15.1%, slightly higher than the previous year's 14.9%. Flexsteel's effective tax rate for the quarter was 28.9%, compared to 22.4% in the prior year, influenced by state taxes and non-deductible compensation.
Flexsteel's balance sheet showed total assets of $290.2 million as of December 31, 2025, an increase from $282.5 million at the end of June 2025. Current assets rose to $188.6 million, driven by increases in trade receivables and inventories. The company reported working capital of $126.0 million, up from $110.4 million, reflecting a strong liquidity position. The company’s cash and cash equivalents decreased to $36.8 million from $40.0 million, while total liabilities decreased to $111.3 million from $114.6 million.
Looking ahead, Flexsteel anticipates continued growth driven by higher unit volumes in sourced soft seating products and pricing adjustments due to tariff surcharges. The company remains focused on strategic investments to enhance its product offerings and operational efficiencies. Flexsteel's sales order backlog increased to $82.4 million, indicating a positive outlook for future sales. The company is committed to maintaining compliance with its credit agreement and managing its financial resources effectively as it navigates market conditions.
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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