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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