Why Methode Electronics Shares Are Falling Today

Methode Electronics, Inc. MEI reported a fourth-quarter FY23 net sales growth of 4.3% year-on-year to $301.2 million, beating the consensus of $297.45 million.

Adjusted EPS of $0.21 missed the consensus of $0.45.

Segments: The Automotive segment's net sales fell 4.2% Y/Y to $186.2 million.

Net sales for the Industrial segment grew by 24.2% Y/Y to $98 million, and the Interface segment sales totaled $15.8 million.

Debt was $306.8 million at the end of the quarter, compared to $210.5 million at the end of fiscal 2022. The company exited the quarter with cash and equivalents totaling $157 million.

President and Chief Executive Officer Donald W. Duda said, "Methode had strong sales in the quarter led by our lighting and power distribution solutions, and our EV application sales set another record. Material cost inflation continues to significantly challenge our margins, but we were still able to deliver strong free cash flow." 

Outlook: The fiscal 2024 and 2025 guidance is unchanged from the preliminary guidance provided on June 12, 2023. 

For fiscal 2024, the company expects net sales of $1.15 billion- $1.20 billion and EPS of $1.55-$1.75 against the Street view of $1.16 billion and $1.62, respectively.

For fiscal 2025, the company expects net sales of $1.25 billion-$1.50 billion.

Price Action: MEI shares are trading lower by 9.38% to $34.00 on the last check Thursday.