We continue to execute well and delivered strong sales growth and sizable year-over-year profit improvement in the quarter. We delivered 6.2% sales growth in the quarter, representing our eighth consecutive quarter of year-over-year growth.
— Derek Paul Schmidt
03Detailed Report
FLXS
Company FLXS
Period
Q1 2026
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 13, 2026
Swipe to view all report sections
Executive Summary
Flexsteel delivered a solid start to fiscal year 2026 (QQ1) with continued top-line momentum and accelerating profitability, despite a challenging macro environment and meaningful tariff headwinds. First-quarter net sales reached $110.4 million, up 6.2% year over year, marking the eighth consecutive quarter of YoY growth. GAAP operating income was $9.0 million (8.1% of sales), beating the guided range on fixed-cost leverage and favorable foreign exchange translation, underscoring the company’s operating discipline and scale benefits. Net income totaled $6.49 million with a 5.9% net margin, supported by higher gross margins (22.9%) and ongoing cost controls. The quarter benefited from a roughly $2.4 million tariff-related pricing impact, and management noted that tariffs, pricing actions, and demand dynamics will remain a near-term challenge as the industry adjusts to a higher 232 tariff regime on upholstered furniture.
Key Performance Indicators
Revenue
Decreasing
109.60M
QoQ: -3.83% | YoY: -1.10%
Gross Profit
Increasing
25.11M
22.91% margin
QoQ: -0.89% | YoY: 6.55%
Operating Income
Increasing
8.15M
QoQ: 261.09% | YoY: 73.83%
Net Income
Increasing
6.49M
QoQ: 273.46% | YoY: 31.88%
EPS
Increasing
1.38
QoQ: 294.37% | YoY: 45.26%
Revenue Trend
Margin Analysis
Financial Highlights
Overview of QQ1 2026 financials and key operational metrics:
- Revenue: $110.4 million, up 6.2% YoY from $104.0 million; QoQ growth not material given flat backlog.
- Gross Profit / Margin: Gross profit $25.11 million; gross margin 22.91% (0.2291). YoY gross profit up about 6.6%; QoQ margin flat to modestly lower given tariff dynamics.
- Operating Income / Margin: GAAP operating income $9.15 million (approximate from calls and balance sheet data cited as 8.1% margin); operating margin 7.44% (vs. prior year expansion).
- Net Income / Margin: Net income $6.49 million; net margin 5.92%. EPS $1.38 (GAAP) and $1.31 (diluted).
- Backlog: End of period backlog about $66.7 million, broadly flat vs prior quarter, supporting the revenue base into subsequent quarters.
- Cash Flow and Balance Sheet: Net cash provided by operating activities $4.11 million; free cash flow $2.76 million; cash balance $38.59 million; no bank debt; total debt $57.81 million with net cash position of $38.59 million after cash.
- Capital Allocation: Share repurchases of $1.13 million and dividends paid of $1.15 million; investments in fixed assets reflected in $1.36 million capex; no current debt covenant pressure reported.
- Guidance and Tariffs: Management paused formal forward-looking guidance due to tariff uncertainty; pricing actions and cost-reduction efforts largely offset tariff headwinds in the quarter, but near-term demand and margins are expected to be affected as tariffs evolve. Management signaled a multi-pronged response plan and continued investments in growth initiatives (new products, consumer insights, and go-to-market initiatives).
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
109.60M
-1.10%
-3.83%
Gross Profit
25.11M
6.55%
-0.89%
Operating Income
8.15M
73.83%
261.09%
Net Income
6.49M
31.88%
273.46%
EPS
1.38
45.26%
294.37%
Key Financial Ratios
Management Insights Available for Members
Get exclusive access to management commentary, earnings call quotes, and forward guidance from company leadership.