Flexsteel Industries reports fiscal 2026 sales growth, record EPS

Flexsteel Industries (NASDAQ: FLXS ) held its fourth-quarter earnings conference call on Tuesday.

Below is the complete transcript from the call.

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The full earnings call is available at Summary Flexsteel Industries reported fiscal year 2026 sales of approximately $459 million, marking a 4% growth over the prior year, with adjusted operating margins at 7.5% and record adjusted earnings per diluted share of $4.94.

The company faced a challenging demand environment due to inflation, geopolitical events, and evolving tariff policies, yet managed to expand margins and generate over $47 million in free cash flow.

Strategic initiatives in the health and wellness category and new product introductions continued to drive long-term growth, with plans to exit the underperforming ready-to-assemble product category.

For Q1 fiscal year 2027, Flexsteel Industries projects net sales between $111 to $115 million and operating margins between 6.5% to 7.0%, despite ongoing inflationary pressures and geopolitical uncertainties.

Operational highlights include a 25% increase in dividends, significant share repurchases, and strategic investments in consumer insights, innovation, and marketing to strengthen competitive advantage.

Full Transcript OPERATOR Good morning everyone and welcome to the Flexsteel Industries fourth quarter fiscal year 2026 earnings conference call.

All participants will be in a listen-only mode.

Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

After today's presentation there will be an opportunity to ask questions.

To ask a question you may press star and then one on your touchtone phones.

To withdraw your questions you may press star and two.

Please also note today's event is being recorded.

At this time I'd like to turn the conference call over to Mike Ressler, Chief Financial Officer for Flexsteel Industries.

Please go ahead.

Mike Ressler, Chief Financial Officer Thank you and welcome to today's call to discuss Flexsteel Industries fourth quarter fiscal year 2026 financial results.

Our earnings release, which we issued after market close yesterday, Monday, August 17th, is available on the Investor Relations section of our website at under News and Events.

I'm here today with Derek Schmidt, President and Chief Executive Officer.

On today's call we will provide prepared remarks and then we will open the call to your questions.

Before we begin, I would like to remind you that the comments on today's call will include forward-looking statements which can be identified using words such as estimate, anticipate, expect and similar phrases.

Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.

Such risks and uncertainties include, but are not limited to, those that are described in our most recent Annual Report on Form 10-K, as updated by our subsequent quarterly reports on Form 10-Q and other SEC filings.

As applicable, these forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events.

Additionally, we may refer to non-GAAP measures which are intended to supplement but not substitute for the most directly comparable GAAP measures.

The press release available on the website contains the financial and other quantitative information to be discussed today and with that I'll turn the call over to Derek Schmidt.

Derek Schmidt, President and Chief Executive Officer Good morning and thank you for joining us today.

I am pleased to share our fourth quarter and fiscal year 2026 results.

While the operating environment became increasingly challenging throughout the year, particularly during the second half, our team continued to execute at a high level and delivered another year of strong financial and strategic progress.

During fiscal year 2026 we generated sales of approximately $459 million, representing 4% growth over the prior year.

Despite a weak and highly variable demand environment for furniture, we expanded adjusted operating margins to approximately 7.5%, generated record adjusted earnings per diluted share of approximately $4.94 and produced more than $47 million of free cash flow.

Our strong cash generation enabled us to return meaningful capital to shareholders through share repurchases, and we recently increased our dividend by 25% while maintaining a strong balance sheet.

These results are encouraging given the number of external challenges our industry faced during the year.

Demand remained inconsistent, tariff policies continued to evolve, geopolitical events created heightened macroeconomic uncertainty, and inflationary pressures intensified as rising energy prices drove higher transportation and material costs.