by Sales for full year rose 13.6%, while net income faltered
DUBUQUE, Iowa – Full-line furniture resource Flexsteel reported a drop in sales and earnings for the fourth quarter ended June 30.
Meanwhile sales for the full year were above the previous fiscal year although earnings also fell during the same 12-month period.
The company reported fourth quarter net sales of $124.5 million, down 8.6% from sales of $136.2 million for the same period last year. The company said this was driven by lower sales volume in furniture sold through retail stores, a $7.7 million decrease, while furniture sold through e-commerce channels decreased by $4 million.
During the quarter, it had a net loss of $271,000, or 5 cents per share, compared to net income of $5.8 million, or 81 cents per share the same period last year. The net loss included a pre-tax restructuring expense primarily related to previously announced facility closures and $3.6 million in tax expenses.
Excluding these expenses, it had an adjusted net income of $2.2 million, or 41 cents per diluted share compared to adjusted net income of $4.4 million, or 61 cents per diluted share in the same period last year.
For the full year, the company reported sales of $544.3 million, compared to $478.9 million. a 13.6% increase. Net income for the full year was $1.8 million, or 29 cents per share compared to $23 million, or $3.20 per share during the prior fiscal year.
“We performed solidly in the fourth quarter given challenging conditions which included slowing consumer demand, exacerbated by a glut of retail inventory, continued inflationary pressures, most notably fuel, and intensifying competitive pricing pressures,” said President and CEO Jerry Dittmer. “I am encouraged by the fact that we adjusted to these challenges and were able to deliver sales for the quarter of $124 million, an 8.6% decline compared to the prior year. While sales in the quarter were challenged, the full year remained positive with a record-setting year on net sales growth of 13%. In spite of these economic headwinds, we continued to compete well and gain market share, successfully reducing our lead times to 3 to 5 weeks which is an advantage compared to many of our competitors.”
He called FY22 a year of significant challenges, but also one of many successes.
“I’m especially proud of and grateful for our team of dedicated employees,” he said. “Their resilience in the face of numerous obstacles presented by COVID-19 and unprecedented global supply chain disruptions was outstanding. Even with these hurdles, our team delivered another record-setting year of sales. At the same time, we made notable strides in advancing our strategic agenda and building a solid foundation for long-term profitable growth. We strengthened talent and culture, including the addition of two key new executive team members to build on our success in global supply chain operations and the finance and accounting organization. The expansion of our supply chain capacities at our Juarez, Mexico plant was successful and we strengthened our customer service experience by opening a new distribution facility on the east coast. Our digital capabilities continue to improve via our direct-to-consumer website, www.homestyles-furniture.com, and our well-received website, www.flexsteel.com, with an improved user experience and significant digital assets.”
Looking forward, he said the company has entered the new fiscal year “well positioned to successfully face the challenges ahead while still delivering improved earnings and a stronger balance sheet. We are focused on inventory management and successfully reduced inventory levels by $19.9 million versus where we ended a year ago. We expect reductions in inventory to generate positive operating cash flow in the fiscal year 2023 as we continue to right-size our inventory levels. In summary, we’re enthusiastic about the long-term growth opportunities for the Company while being mindful of the short-term challenges we will face ahead and are making the right strategic decisions now to realize our growth potential.”
