DUBUQUE, Iowa - Flexsteel Industries, Inc. (NASDAQ: FLXS), a major player in the U.S. residential furniture market, has announced preliminary financial results for its second quarter ending December 31, 2023, revealing a positive performance with increased sales and margins, as well as a strengthened balance sheet. The company expects to disclose its complete financial outcomes after the market closes on February 5, 2024.
For the second quarter, Flexsteel anticipates a 7.5% increase in net sales, reaching $100.1 million compared to $93.1 million in the previous year. The company also reports a notable rise in sales orders, up 13.9% to $104.8 million. Gross margin showed significant improvement, climbing from 17.0% to 21.9%, while GAAP operating income increased to $4.6 million, or 4.6% of net sales, from $3.8 million, or 4.0% of net sales, in the prior year's quarter.
Earnings per diluted share are expected to be $0.57 for the current quarter, up from $0.53 in the previous year. The company also made notable strides in reducing debt, with a 46% reduction in borrowings under their line of credit, totaling $15.1 million for the quarter.
Looking ahead, Flexsteel provided a financial outlook for the remainder of fiscal 2024 and fiscal 2025. Sales are projected to range from $101 million to $106 million in the third quarter and $107 million to $112 million in the fourth quarter of fiscal 2024. For the full fiscal year 2025, sales are expected to be between $416 million and $432 million. Operating margins and free cash flow are also anticipated to improve.
In executive news, Michael Ressler was promoted to Chief Financial Officer, Treasurer, and Secretary as of January 10, 2024. Derek Schmidt's promotion to President and his appointment to Flexsteel's Board of Directors were also announced. Concurrently, Matt Kaness resigned from the Board effective January 9, 2024, to focus on other professional commitments.
Flexsteel will host a conference call and webcast for analysts and investors on February 6, 2024, to discuss these results and answer questions.
This article is based on a press release statement from Flexsteel Industries, Inc.
InvestingPro Insights
As Flexsteel Industries demonstrates robustness in its quarterly performance, it's worth noting the financial health and market position of similar companies in the industry for a broader perspective. W.P. Carey Inc. (NYSE: WPC), a global net-lease REIT that also operates in the real estate sector, shows signs of strong financial performance and stability. According to InvestingPro data, W.P. Carey boasts a market capitalization of $14.55 billion and a P/E ratio of 18.33, with an adjusted P/E ratio for the last twelve months as of Q3 2023 standing at 23.68. The company's revenue growth for the same period was an impressive 22.15%, reflecting a solid increase in sales.
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