STRATTEC Security Corporation Reports 2.3% Sales Growth and Improved Profitability in Q3 2025

STRATTEC Security Corporation reported its financial results for the third quarter and nine months ended March 30, 2025, revealing a net sales increase of 2.3% to $144.1 million compared to $140.8 million in the same period last year. The company attributed this growth to $2.5 million in price increases, a favorable product mix contributing $2.2 million, and $1.6 million from new program launches, which collectively offset a $3.0 million decline in sales volumes on existing platforms. For the nine-month period, net sales reached $413.1 million, marking a 4.7% increase from $394.7 million in the prior year, driven by new program launches and higher production volumes.

The company's gross profit for the third quarter was $23.1 million, significantly up from $14.7 million in the prior year, resulting in a gross profit margin improvement from 10.4% to 16.0%. This increase was attributed to favorable changes in foreign currency exchange rates, pricing actions, and improved cost structure leverage. For the nine-month period, gross profit rose to $59.2 million from $46.9 million, with the gross profit margin improving from 11.9% to 14.3%. The company reported net income of $5.7 million for the third quarter, compared to $1.1 million in the same quarter last year, and $10.9 million for the nine months, up from $6.4 million.

In terms of operational developments, STRATTEC has been focusing on restructuring efforts to optimize its cost structure, which included a reduction in headcount and the elimination of a shift in its Milwaukee operations. These actions are expected to yield approximately $5 million in annual cost savings. The company also reported a significant increase in cash and cash equivalents, which rose to $62.1 million from $25.4 million at the end of the previous fiscal year, reflecting improved cash flow from operations of $41.5 million for the nine months, compared to a cash outflow of $7.2 million in the prior year.

Looking ahead, STRATTEC faces challenges from an uncertain economic environment, including inflationary pressures and supply chain disruptions that could impact vehicle production and demand for its products. The company is actively monitoring the global trade landscape, particularly regarding tariffs that could increase costs by an estimated $9-$12 million annually. Despite these challenges, STRATTEC aims to enhance profitability and drive sustainable sales growth through improved operational efficiencies and strategic pricing initiatives.

Overall, STRATTEC Security Corporation's financial performance in the latest quarter reflects a positive trajectory, bolstered by strategic initiatives and a focus on cost management, while navigating a complex market environment. The company remains committed to leveraging its engineering expertise and customer relationships to foster future growth.