Flexsteel's Q2 Earnings and Sales Beat Estimates, Stock Up

Flexsteel Industries, Inc. FLXS reported impressive second-quarter fiscal 2025 (ended Dec. 31, 2024) results, with earnings and net sales surpassing the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis.Despite persistent challenges in the industry, Flexsteel has been gaining market shares. The company continued its growth trend, achieving fifth consecutive quarter of positive growth in sales. This growth was broad based, with strong performance in core markets and new initiatives. In addition, Flexsteel expanded its operating margin and generated positive free cash flow. This enabled it to pay off remaining bank debt and begin accumulating cash.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Shares of Flexsteel gained 6.9% in yesterday’s after-hours trading session. Positive investor sentiments were witnessed as the company raised the midpoint of its sales guidance for fiscal 2025. The company also expects continued improvement in its operating margin and free cash flow for the remainder of the fiscal year.Inside the Numbers of FLXSIn the fiscal second quarter, the company reported adjusted earnings per share (EPS) of 95 cents, beating the Zacks Consensus Estimate of 74 cents. The company reported adjusted EPS of 57 cents in the prior-year quarter.Flexsteel Industries, Inc. Price, Consensus and EPS Surprise Flexsteel Industries, Inc. price-consensus-eps-surprise-chart | Flexsteel Industries, Inc. QuoteNet sales of $108.5 million topped the consensus estimate of $105 million by 3.7%. The metric increased 8.4% from the year-ago quarter’s figure. This upside was driven by a 10.3% year-over-year increase in home furnishings sales through retail stores.Sales through e-commerce channels declined 7.1% year over year due to weaker consumer demand.FLXS’ Operating HighlightsThe gross margin contracted 90 basis points (bps) year over year to 21%. This downside can be attributed to higher ocean freight costs.Selling, general and administrative expenses, as a percent of net sales, decreased 240 bps to 14.9% from the prior-year quarter’s levels. This decrease was caused by leverage from higher sales and structural cost savings. However, it was partially offset by investments in growth initiatives.Adjusted operating margin expanded 150 bps year over year to 6.1%.Financial Highlights of FLXSAs of Dec. 31, 2024, the company had cash and cash equivalents of $11.8 million compared with $4.8 million at the end of fiscal 2024. Net cash provided by operating activities totaled $9.1 million in the first six months of fiscal 2025, down from $17.2 million reported in the year-ago period.FLXS’ Q3 & Fiscal 2025 GuidanceFor the third quarter of fiscal 2025, the company expects net sales in the range of $110-$115 million, indicating 3% to 7% growth compared with the prior year.For fiscal 2025, the company expects net sales in the range of $435-$445 million, up from previous expectation of $427-$440 million. The estimated figure indicates 5.5-8% growth from the prior year’s number.FLXS’ Zacks RankFlexsteel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Recent Consumer Discretionary ReleasesAdtalem Global Education Inc. ATGE posted better-than-expected results in second-quarter fiscal 2025. Earnings and revenues surpassed the respective Zacks Consensus Estimate and increased year over year, driven by strong enrollment growth and strategic initiatives.  Adtalem's operational excellence strategy, Growth with Purpose, has driven six consecutive quarters of enrollment growth while supporting its mission to develop skilled healthcare professionals. Furthermore, strong demand at Chamberlain University and Walden University drove results. ATGE now expects fiscal 2025 adjusted earnings in the band of $6.10-$6.30 per share compared with the earlier prediction of $5.75 to $5.95.  Las Vegas Sands Corp. LVS reported fourth-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and net revenues beating the same. The metrics declined on a year-over-year basis.  The company reported solid financial and operational performance at Marina Bay Sands, Singapore and continued recovery in the Macao market. LVS continues to execute its strategic objectives and remains optimistic about achieving industry-leading growth in both Macao and Singapore through its ongoing capital investment initiatives. It is optimistic about the introduction of new suite offerings and enhanced service levels and increased tourism spending in Asia.  Royal Caribbean Cruises Ltd. RCL reported mixed fourth-quarter 2024 results, with adjusted earnings beating the Zacks Consensus Estimate while the revenues missed the same. Notably, the top and bottom lines increased on a year-over-year basis.  The company’s performance during the quarter was driven by stronger pricing on close-in demand and continued strength in onboard revenues. Its diversified fleet offerings, accompanied by its commercial and vacation experiences, are witnessing robust demand trends amid an improving global market backdrop. Thanks to these tailwinds, RCL could achieve its Trifecta goals before the schedule, pointing out the benefits it is realizing from the current improving scenario.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report Las Vegas Sands Corp. (LVS): Free Stock Analysis Report Flexsteel Industries, Inc. (FLXS): Free Stock Analysis Report Adtalem Global Education Inc. (ATGE): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks