Plexus Corp. Reports Slight Decline in Net Sales but Improved Profitability Metrics

Plexus Corp. reported its financial results for the three months ended December 28, 2024, revealing a slight decline in net sales but notable improvements in profitability metrics. The company generated net sales of $976.1 million, a decrease of 0.7% from $982.6 million in the same period last year. Despite the drop in sales, gross profit increased to $100.7 million, up 14.3% from $88.1 million, resulting in a gross margin of 10.3%, compared to 9.0% in the prior year. Operating income also rose to $46.9 million, reflecting a 3.8% increase from $45.2 million, while net income surged by 27.7% to $37.3 million, leading to diluted earnings per share of $1.34, up from $1.04.

The company's performance varied across its geographic segments. The Americas (AMER) segment saw a significant decline in sales, down 11.6% to $273.9 million, attributed to decreased customer demand, although this was partially offset by new product ramps. Conversely, the Asia-Pacific (APAC) segment experienced a 9.8% increase in sales to $607.1 million, driven by heightened customer demand and new product introductions. The Europe, Middle East, and Africa (EMEA) segment reported a 16.6% decline in sales to $101.2 million, primarily due to reduced customer demand.

Plexus also undertook strategic actions during the quarter, including a restructuring initiative that incurred $4.7 million in charges, primarily related to workforce reductions in the AMER and EMEA regions. The company repurchased 84,823 shares for $12.8 million under its ongoing share repurchase program, which has a remaining authority of $37.2 million. Additionally, Plexus reported a significant improvement in cash flow from operations, generating $53.6 million compared to a cash outflow of $3.0 million in the prior year, largely due to better management of accounts payable and inventory.

Looking ahead, Plexus anticipates continued challenges from macroeconomic factors, including supply chain constraints and increased costs. However, the company believes its cash flow from operations, along with available cash and credit facilities, will be sufficient to meet its working capital and capital expenditure needs over the next twelve months. The company expects to maintain its focus on operational efficiency and strategic growth initiatives to navigate the evolving market landscape.