Strattec Security Corp. reported a 27.9% increase in adjusted diluted earnings per share to $6.88 for fiscal 2026, alongside a 10% rise in net income, as the automotive components manufacturer advanced its restructuring initiatives. The Milwaukee-based company, which supplies locks, latches and access systems to major automakers, also reinstated a $40 million share repurchase program—the first in roughly three decades—following the repurchase of 110,000 shares for $7.4 million in the most recent quarter.
Gross margins expanded by 150 basis points to 16.5% in fiscal 2026 from 15% a year earlier, driven by $15.6 million in pricing benefits and $9.5 million in restructuring savings from headcount reductions. Foreign exchange headwinds totaled $4.8 million, while selling, general and administrative expenses rose by $7 million to 11.9% of sales, a figure expected to normalize to 11%–12% in the near term. The company ended the period with $108 million in cash and no debt, maintaining a current ratio of 2.9.
Chief Executive Jennifer Slater highlighted progress in operational efficiency, including the automation of 16 production stations over the past year, bringing the company’s automation level to about 9%. The company reduced headcount by 21% over two years and is evaluating a potential sale-leaseback of its 350,000-square-foot Milwaukee headquarters, which is currently only 50% utilized. Slater emphasized the flexibility of the footprint, noting limited capital intensity and the ability to adjust operations as needed.
Strattec’s customer concentration remains high, with Ford, General Motors and Stellantis accounting for 65% of sales. The company is expanding early engagement with automakers, shifting from standard RFQ responses to collaboration five or more years before vehicle launches. Product development spans three pillars: traditional lock-and-key systems transitioning to ultra-wideband digital keys, rear access actuators and power sliding doors, and manual latches for hood and door closure.
Looking ahead, Strattec projects North American production to decline by 2% through fiscal 2027, with its addressable customer base expected to shrink by 6% over the same period. The company’s shares were trading at $70.14, down $4.90, or 6.53%, at the time of the report.
