Strattec Security Corp. reported fiscal 2026 results that exceeded expectations, with record annual revenue of $579.4 million despite a projected 2% decline in North American auto production. The company’s shares rose 3.72% to $82.01 following the release, before paring gains to trade at $78, down 1.35% from the prior close.
The Milwaukee-based automotive access systems provider posted full-year adjusted earnings per share of $6.88, up from $5.38 in fiscal 2025, while adjusted EBITDA increased 15% to $50.5 million, representing an 8.7% margin. Gross margin expanded 150 basis points to 16.5%, though fourth-quarter gross margin contracted 110 basis points year-over-year to 15.6%. Revenue for the quarter was essentially flat at $151.8 million, beating management’s guidance of a 3% to 4% decline.
Chief Executive Jennifer Slater highlighted the company’s transformation efforts, noting $9.5 million in annualized cost savings achieved through restructuring and tariff recoveries, with a six-month payback period. The savings were partially offset by $6.5 million in foreign exchange headwinds and $1.8 million in higher labor costs in Mexico. Selling, administrative, and engineering expenses rose to 11.9% of sales, driven by $3.3 million in higher salaries and $2.8 million in transformation-related costs.
Strattec ended the fiscal year with $108.2 million in cash and zero debt, up 28% from the prior year, and generated $46.3 million in operating cash flow. Free cash flow for the year totaled $39 million after $7.3 million in capital expenditures. The company authorized a new $40 million share repurchase program, following a previous program that returned $7.4 million to shareholders.
Customer concentration remained high, with General Motors accounting for 27% of sales, Ford 21%, and the Detroit 3 automakers collectively representing approximately 60%. Product mix was led by power access systems at 25%, followed by door handles (24%) and keys and locksets (21%). The company expects North American auto production to decline 2% in fiscal 2027, with the Detroit 3 projected to see a nearly 6% drop.
Capital expenditures are guided at roughly $12 million, or 2% of sales, with automated assembly stations now comprising 9% of operations and typically achieving payback periods of less than one year. The company’s effective tax rate is expected to range between 24% and 25%.
