On this page of StockholderLetter.com we present the latest annual shareholder letter from FLEXSTEEL INDUSTRIES INC — ticker symbol FLXS. Reading current and past FLXS letters to shareholders can bring important insights into the investment thesis.
2024 Annual Report Fiscal Year Ended June 30, 2024
Dear Shareholders, Reflecting on the results of fiscal year 2024, I am extremely pleased with our execution advancing our strategic initiatives and the results we achieved. Despite challenging conditions for our industry driven by weak consumer demand, we delivered solid growth in both sales and operating income. Our commitment to innovation, product development, and customer experience is driving profitable growth and we look forward to leveraging this momentum in fiscal year 2025 as we further these pursuits. Perspectives on Fiscal Year 2024 In fiscal year 2024, we made strong progress in advancing our strategic growth initiatives. This effort resulted in annual sales growth of nearly 5% at a time when many industry participants experienced meaningful declines due to challenging industry dynamics. At the same time, we improved our profitability, and grew adjusted operating income to $18.3 million, or a 126% year-over-year improvement. The keys to our consistent profit improvement have been our sales growth, strong operational execution and efficiencies, robust cost savings, and disciplined product portfolio management. We also continued to improve working capital efficiency and strengthen our balance sheet. Inventories were reduced by over $25 million in fiscal year 2024 while sustaining strong customer service levels. The reduction in inventories, coupled with higher profits, helped generate almost $32 million LQ FDVK IURP RSHUDWLRQV and eliminated most of our bank debt. Our strong performance in fiscal year 2024 not only reflects our team s intense and aggressive focus on growing the business, but also the attractive returns from continued investments in innovation, new product development, consumer research, and marketing, which are unlocking growth in our core markets and opening doors to new growth in expanded markets with long-term potential. In our core markets, we remain focused on differentiating ourselves through value-added innovation and new product development, and delivering superior customer experience. Our focus on expanded markets consists primarily of expanding and repositioning our brand portfolio to align with the consumer needs of the future, especially younger consumers, expanding beyond our core sales distribution and into new brick & mortar and e-commerce channels, and expanding our penetration in the home beyond primary living areas. Looking Forward As we look forward to fiscal year 2025, weak consumer demand is expected to continue to be a major headwind for the industry in the near term. The impact of inflation, albeit slowing, and high interest rates continue to take a toll on consumers cost of living and their overall confidence, and on the housing market, which is an important underlying driver for furniture demand. That said, we are deeply committed to continue growing and gaining share under challenging industry conditions, and we will remain aggressive with our strategies and investments to pursue new growth through both our core markets and expansion into new markets.
In Closing I am proud of what we accomplished in fiscal year 2024 and believe that our long-term growth outlook remains promising. Our team s unwavering commitment to excellence, coupled with the foundational growth investments we have made and will continue to make, have positioned us to successfully drive attractive top-line growth and even stronger earnings in fiscal year 2025. Thank you for your continued support. Sincerely, Derek P. Schmidt President and Chief Executive Officer
 • shareholder letter icon 10/25/2024 Letter Continued (Full PDF)
 • stockholder letter icon 10/26/2023 FLXS Stockholder Letter
 • stockholder letter icon More "Home Furnishings & Furniture" Category Stockholder Letters
 • Benford's Law Stocks icon FLXS Benford's Law Stock Score = 39


FLXS Shareholder/Stockholder Letter Transcript:

2024
Annual Report
Fiscal Year Ended
June 30, 2024


Dear Shareholders,
Reflecting on the results of fiscal year 2024, I am extremely pleased with our execution advancing our
strategic initiatives and the results we achieved. Despite challenging conditions for our industry driven by
weak consumer demand, we delivered solid growth in both sales and operating income. Our commitment
to innovation, product development, and customer experience is driving profitable growth and we look
forward to leveraging this momentum in fiscal year 2025 as we further these pursuits.
Perspectives on Fiscal Year 2024
In fiscal year 2024, we made strong progress in advancing our strategic growth initiatives. This effort
resulted in annual sales growth of nearly 5% at a time when many industry participants experienced
meaningful declines due to challenging industry dynamics. At the same time, we improved our profitability,
and grew adjusted operating income to $18.3 million, or a 126% year-over-year improvement. The keys to
our consistent profit improvement have been our sales growth, strong operational execution and
efficiencies, robust cost savings, and disciplined product portfolio management. We also continued to
improve working capital efficiency and strengthen our balance sheet. Inventories were reduced by over
$25 million in fiscal year 2024 while sustaining strong customer service levels. The reduction in inventories,
coupled with higher profits, helped generate almost $32 million LQ FDVK IURP RSHUDWLRQV and eliminated
most of our bank debt.
Our strong performance in fiscal year 2024 not only reflects our team   s intense and aggressive focus on
growing the business, but also the attractive returns from continued investments in innovation, new product
development, consumer research, and marketing, which are unlocking growth in our core markets and
opening doors to new growth in expanded markets with long-term potential. In our core markets, we remain
focused on differentiating ourselves through value-added innovation and new product development, and
delivering superior customer experience. Our focus on expanded markets consists primarily of expanding
and repositioning our brand portfolio to align with the consumer needs of the future, especially younger
consumers, expanding beyond our core sales distribution and into new brick & mortar and e-commerce
channels, and expanding our penetration in the home beyond primary living areas.
Looking Forward
As we look forward to fiscal year 2025, weak consumer demand is expected to continue to be a major
headwind for the industry in the near term. The impact of inflation, albeit slowing, and high interest rates
continue to take a toll on consumers    cost of living and their overall confidence, and on the housing market,
which is an important underlying driver for furniture demand. That said, we are deeply committed to
continue growing and gaining share under challenging industry conditions, and we will remain aggressive
with our strategies and investments to pursue new growth through both our core markets and expansion
into new markets.

In Closing
I am proud of what we accomplished in fiscal year 2024 and believe that our long-term growth outlook
remains promising. Our team   s unwavering commitment to excellence, coupled with the foundational
growth investments we have made and will continue to make, have positioned us to successfully drive
attractive top-line growth and even stronger earnings in fiscal year 2025. Thank you for your continued
support.
Sincerely,
Derek P. Schmidt
President and Chief Executive Officer



shareholder letter icon 10/25/2024 Letter Continued (Full PDF)
 

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