DUBUQUE, Iowa-In what a statement described as the company’s “strongest first quarter in history,” Flexsteel posted a gain of 31.2 percent in net income, to $3.8 million, for the quarter ending on Sept. 30.
First-quarter net sales tallied $104.3 million, an increase of 14.4 percent, driven primarily by a 16 percent improvement in residential net sales, much of which owed to sales gains in upholstered and ready-to-assemble products. Commercial net sales rose 8 percent.
Gross margin was down 47 basis points to 22.7 percent, the result of changes in product mix and price discounting on certain traditional casegoods to improve operating efficiency. Selling, general and administrative expenses increased 9 percent in dollars but were down 86 basis points as a percentage of sales, to 17.5 percent—reflecting fixed-cost leverage on the increased sales volume.
A Flexsteel statement said the company is expecting sales to continue growing through the end of this fiscal year. Increases in residential sales will continue, led by increased demand for upholstered and RTA products, and an expected modest rise in commercial sales.