The following is a summary of the Flexsteel Industries, Inc. (FLXS) Q2 2024 Earnings Call Transcript:
Financial Performance:
Flexsteel Industries reported Q2 net sales of $100.1 million, slightly above their guidance.
The company delivered operating income of $4.6 million or 4.6% of sales in the second quarter.
The gross margin expanded to 21.9% in the quarter compared to 17% in the prior year quarter.
Flexsteel ended the quarter with $3.3 million cash in hand and a strong working capital of $100.5 million.
The company managed to reduce the debt by 46% compared to the first fiscal quarter.
Flexsteel remains positive about sales growth momentum throughout the rest of fiscal 2024 and into fiscal 2025.
The company anticipates gross margin to grow modestly, driven by sales growth and continued realization of their cost savings initiatives.
The company is prepared to invest in growth initiatives and expects SG&A costs to be between $17 million and $17.5 million for the third quarter.
Business Progress:
Flexsteel reported a sales growth of 7.5% year-over-year for the second quarter. A chunk of the growth was attributed to deep engagements with core strategic accounts.
The company's growth is focused on Gen Z, Millennials, and markets outside of the primary living spaces. As part of this strategy, they launched Charisma, a brand tailoring towards a younger, budget-conscious audience.
An example of their market expansion initiative is the Zecliner sleep chair which is aimed at health-conscious customers.
As part of improving customer service, Flexsteel announced the closure of their Dublin, Georgia manufacturing plant to enhance delivery times and profitability.
In addition to retailers, the Flex modular solution can be purchased from Amazon, Wayfair, costco.com and the company's own online platform.
The company aims to enhance value through market penetration initiatives and potential acquisitions.
More details: Flexsteel Industries IR
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