A Dubuque-headquartered manufacturer this week reported a 34.4% decrease in net sales during its recently completed quarter compared to the same time period one year earlier.
Flexsteel Industries reported net sales of $93.1 million for its second quarter, which ended Dec. 31, compared to $141.7 million during the same period in 2021.
“Despite a challenging macroeconomic environment, I am pleased with our performance in the second quarter, and I am encouraged by the progress made in our strategic initiatives,” Jerry Dittmer, Flexsteel president and CEO, said in a Tuesday conference call with investors. “… I’m optimistic about our future. Slowing economic growth and waning consumer demand are obvious challenges. However, we continue to make investment in our growth in the long term.”
Dittmer also noted that the $93 million in sales was within the company’s sales projection for the quarter, which was $87 to $97 million.
Flexsteel also recorded $2.9 million in net income during the recently completed quarter, up from a net loss of $7.5 million during prior year’s second quarter.
Company officials on Tuesday’s conference call shared their belief in Flexsteel’s strategic growth initiatives in the year ahead.
“(The initiatives) have three legs: new sales distribution, new product categories and new consumer segments,” said Chief Operating Officer Derek Schmidt. “We expect the growth potential of these pursuits to accelerate in the second half of the year.”
In addition to working with big-box retailers on product distribution, the initiatives include the launch of new product lines from Flexsteel. This includes its Charisma upholstery line, which is geared toward younger buyers and launched last quarter. Schmidt said officials plan to extend sales of the line in the coming year.
In the third quarter, he said, the company will launch flex, a small parcel line of furniture, and Zecliner, a sleep-solutions recliner.
“Customer feedback has been overwhelmingly positive, and we expect strong product and sales distribution,” Schmidt said. “Development is already in progress on additional enhancements.”
Dittmer said he expects the initiatives to produce positive results for the company in the years ahead.
“In two or three years, a much larger proportion of our sales will be through the big-box channel and e-commerce,” he said. “A larger proportion of our sales will be more modern, stylish furniture geared toward younger generations, and I think what you’ll find is we’re pivoting towards differentiated innovation and a competitive advantage for the company. Flex and Zecliner are good examples of that in the near term, and I think everything we’ve got going on in the near term is really an example of trying to transform the company long term.”