DUBUQUE, Iowa – Furniture manufacturer and importer Flexsteel reported $107.2 million in net third quarter sales, an 8.2% increase over last year’s $99.1 million. Last quarter, the company achieved similar growth at 7.5%, which followed two quarters of declines.

For the quarter, Flexsteel reported margin expansion to 21.7% compared with 18.8% for the same quarter last year, driven primarily by higher sales and supply chain cost savings. The company recorded sales orders of $111.5 million – a 12.3% increase from last year – and ended the quarter with $4.6 million in cash.

Executives said the company will continue to pay down debt in the near-term, but also accumulate cash for potential acquisitions. For the quarter, debt was reduced by $3.7 million, a 21% reduction under its credit line.

“I am extremely pleased with our third quarter results,” said Jerry Dittmer, CEO. “While macroeconomic conditions continue to present headwinds in our industry, we continue to execute on our strategies, are outperforming the industry, and are growing our top line while improving our profitability.”

In news released alongside the earnings report, Flexsteel revealed Dittmer will retire at the end of fiscal 2024. Derek Schmidt, current president, will assume the CEO role when that happens.

“I am pleased with our third quarter results,” Schmidt said in an earnings call. “We are competing well and our investments in innovation, new product development and consumer experience enhancement are paying off. We are continuing momentum from the second quarter.

“We had success at High Point Market a few weeks ago,” he continued. “Attendance was up 1% overall, but appointments rose 29% in our showroom from last year. In addition, we showed the biggest lineup of new products in my time with Flexsteel with 36 new groups and 16 extensions. That’s nearly a 40% increase from our typical launch.”

Schmidt cited success in the company’s ongoing goal of targeting younger consumers. Flexsteel continues to expand Charisma, a lower-priced modern brand, and Flex, a sub-brand dedicated to small parcel modular furniture. The company also expanded its sleep recliner line Zecliner to include new fabrics and a new sofa. Efforts are in place to ramp up point-of-sale material to help retailers sell Zecliner in store.

Of the $8.1 million in quarterly sales growth, the company said around $7 million has come from newer initiatives like Charisma, Flex and Zecliner.

Schmidt said the company is in the process of “resetting” its case goods business, which remains a weak point. He is confident in the business going forward, however, with new High Point products in bedroom, dining and occasional being received well. Nearly all that product has been activated, he said.

“We have design talent and an advantaged supply chain to better compete in this category and gain share,” he said.

Both Dittmer and Schmidt said macroeconomic conditions are tough for the furniture industry, with Schmidt expecting “sluggish industry conditions to exist for the next six to 12 months.” Both were confident in Flexsteel’s ability to continue its sales momentum in the fourth quarter and into fiscal 2025.

See also:

• Flexsteel names Schmidt new CEO
• Flexsteel offers insight on recent growth, outlines three ways it’s boosting profits

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