Flexsteel Industries Inc. on Monday reported fiscal fourth-quarter 2026 results that exceeded analyst expectations, sending shares up 10.67% in after-hours trading.
The Huntingburg, Indiana-based furniture manufacturer posted adjusted earnings per share of $1.33 for the quarter ended June 30, surpassing the consensus estimate of $1.09 by 22%. Revenue totaled $115.4 million, up 0.7% from $114.6 million in the same period a year earlier and exceeding forecasts of $109.66 million. Full-year fiscal 2026 revenue reached $459 million, a 4% increase from the prior year.
Adjusted operating margin for the quarter narrowed to 7.1% from 9.0% a year earlier, while GAAP operating income rose to $16.3 million, or 14.2% of sales, compared with $14.0 million, or 12.2% of sales, in the prior-year period. Full-year adjusted operating margin was approximately 7.5%. Free cash flow for the year exceeded $47 million, with cash flow from operations totaling $24.3 million in the quarter.
Flexsteel maintained its dividend growth streak, increasing the payout by 25% to $0.20 per share and raising the annual dividend by 47% over the past 12 months. The company also repurchased roughly 1.3 million shares for $62.6 million during the quarter. As of the end of the quarter, Flexsteel held $16.7 million in cash, $94.6 million in working capital, and reported no bank debt.
The company’s sales order backlog stood at $70.1 million at quarter-end, up 5.5% year-over-year but down 11.8% sequentially. Pricing increased approximately 10% to 11% in the quarter, though unit volumes declined. Flexsteel’s stock price approached the top of its 52-week range, which spans from $34 to $84, following the earnings release.
Flexsteel’s CEO Derek Schmidt highlighted the company’s progress, stating it delivered “another year of strong financial and strategic progress” despite a challenging operating environment. The company is investing in consumer insights to improve product development and retail adoption. CFO Mike Ressler noted that while pricing gains supported revenue, unit volume declines did not fully offset the increases.
The company also announced plans to exit its Homestyles ready-to-assemble furniture category, which generated about $12 million in annual sales in fiscal 2026. Flexsteel cited increased competition and tariffs as key factors in the decision, with the Huntingburg distribution center slated for sale over the next three to six months. Case goods and soft seating segments saw mixed performance, with soft seating sales up $2.9 million and case goods down roughly $0.3 million in the quarter.
For the fiscal first quarter of 2027, Flexsteel guided for revenue between $111 million and $115 million, representing 1% to 4% year-over-year growth, and expects operating margins of 6.5% to 7.0%. Selling, general, and administrative expenses are projected to remain in the high 15% to low 16% range of sales.
