Flexsteel Stock Falls 18% in the Session After Its Fiscal First-Quarter Results

Flexsteel Industries (Nasdaq: FLXS) fell 18.4% on Tuesday, Oct. 27, 2026, closing at $67.39 from a previous close of $82.55. The S&P 500 ETF (SPY) rose 0.56% that session, and Flexsteel traded on about 3.8 times its usual volume. The move came the session after the company released fiscal first-quarter results in an 8-K filed the evening before, at 4:42 p.m. Eastern.

Sales rose, but profit fell

Net sales increased 3.2% to $114.0 million, with Flexsteel-branded sales up 5.1%. Operating income fell to $6.9 million from $9.0 million, and diluted earnings per share were $1.24 against $1.31 a year earlier. Gross margin slipped to 22.0% from 23.5%. The company said the 150-basis-point decline in gross margin was primarily driven by a 130-basis-point unfavorable currency translation impact on peso-denominated assets in Mexico and by inflation from elevated energy prices.

Second-quarter guidance points to a 6.5% to 7% operating margin

For the second quarter of fiscal 2027, Flexsteel forecast sales of $119.5 million to $123.0 million, growth of 1% to 4%, and an operating margin of 6.5% to 7%. Chief Executive Derek Schmidt said the company expects the operating environment to remain challenging, citing consumer confidence, affordability constraints, tariff policy and ocean transportation rates that have nearly doubled over the past six months.

Cash fell sharply in the quarter

Cash and equivalents stood at $4.4 million on Sept. 30, down from $16.7 million at June 30. Operating cash flow was negative $1.5 million for the quarter, and the company had about $29.1 million available under its secured line of credit.