Why Furniture Company Flexsteel Industries Shares Are Surging Today

Flexsteel Industries Inc FLXS shares are surging after it provided preliminary second-quarter fiscal 2024 results and a financial outlook for the remainder of fiscal year 2024 and fiscal year 2025.

Flexsteel expects second quarter FY24 sales growth of 7.5% with net sales of $100.1 million (consensus $96.77 million). It expects sales orders of $104.8 million, a 13.9% increase, and a gross margin improvement of 21.9% compared to 17% in Q2 FY23.

Flexsteel sees an operating income of $4.6 million with a margin of 4.6%. It expects an operational cash flow of $18.9 million for the quarter.

“While macroeconomic conditions combined with discretionary consumer spending shifts away from home furnishings continue to present headwinds to the industry, our growth initiatives are enabling us to profitably grow despite difficult conditions,” said CEO Jerry Dittmer.

Outlook: Flexsteel sees third-quarter FY24 sales of $101 million – $106 million, with an operating margin of 4.5% – 5.5%. It sees fourth-quarter FY24 sales of $107 million – $112 million and an operating margin of 5% – 6%.

Flexsteel expects 1H FY24 free cash flow of $11 million – $17 million.

Flexsteel sees FY25 sales of $416 million – $432 million (consensus $426.87 million), an operating margin of 5.5% – 6.5%, and a free cash flow of $20 million – $30 million.

Management Change: Flexsteel has promoted Michael Ressler to Chief Financial Officer, Treasurer and Secretary, effective January 10, 2024.

Concurrent with Ressler’s promotion, Derek Schmidt has been promoted to the position of President and appointed to Flexsteel’s Board of Directors.

Unrelated to the management updates, Matt Kaness announced his resignation from the Board on January 9, 2024, effective immediately.

Price Action: FLXS shares are trading higher by 26.91% at $22.87 premarket on the last check Friday.