Flexsteel looks to continue momentum after 30% jump in annual sales

Leaders of a Dubuque-headquartered manufacturing company on Tuesday discussed the past year’s skyrocketing sales and expressed optimism that the momentum will continue.

Flexsteel Industries reported net sales of $478.9 million in fiscal year 2021, which concluded on June 30. That represents an increase of more than 30% compared to the prior year.

Net income exceeded $23 million in the recently completed year, a striking contrast with the net loss of $26.8 million observed in fiscal year 2020.

“Our growth trajectory is robust, and we intend to continue this momentum into fiscal year 2022,” said President and CEO Jerry Dittmer during an investor conference call this morning.

Chief Financial Officer and Chief Operating Officer Derek Schmidt emphasized that the furniture manufacturer finished the year on a particularly strong note.

Flexsteel recorded $136.2 million in sales in the three months ending June 30 — its highest quarterly sales total of the year and more than double the sales from the same quarter in 2020. The growth was driven by sales of home furnishings products sold through retail stores, a figure that was up 196% compared to the same quarter last year and up 60% compared to the same stretch in 2019.

Flexsteel’s solid year comes on the heels of a massive restructuring plan, which included the decision to cease manufacturing operations in Dubuque.

Much of Flexsteel’s current manufacturing growth is taking place outside of the U.S.

Dittmer said the company recently commenced operations at a new plant in Juarez, Mexico, its third facility in that city. Flexsteel also plans to lease a 507,800-square-foot facility in Mexicali, Mexico, beginning next year.

Dittmer said these facilities are part of a broader plan to increase capacity so Flexsteel can fulfill the current backlog of orders and support future growth.

Flexsteel, which continues to house its corporate headquarters in the Port of Dubuque, benefited from a surge in demand for furniture in the past year, fueled largely by changing consumer behavior during the COVID-19 pandemic.

Dittmer said the company’s near-term outlook remains bullish, citing improving employment conditions and healthy consumer spending as encouraging trends.

“Based on these macroeconomic conditions and what we are hearing from customers, we expect demand for home furnishings to remain strong through the bulk of 2021,” he said.

Schmidt acknowledged that Flexsteel will face multiple challenges in the year ahead, most notably the soaring costs associated with ocean container freight rates and related changes. Inflation, material shortages and the availability of labor also cast uncertainty over the coming year.

Despite these hurdles, Schmidt said Flexsteel is targeting sales growth of 15% to 20% this year.

“We are planning for another year of aggressive, profitable growth,” Schmidt said.