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.
2025 Annual Report Fiscal Year Ended June 30, 2025
Dear Shareholders, Fiscal year 2025 was a success for Flexsteel in terms of both financial results and strategic progress, and our team drove outstanding performance despite difficult industry conditions. Our strategies and investments are working well, and as a result, we are gaining share and competitively well positioned to continue our positive momentum in fiscal 2026. Perspectives on Fiscal Year 2025 I firmly believe that our greatest advantage is our talent and culture. We made great strides in the past year recruiting, developing, and promoting high-potential talent who drive our strong execution, and in strengthening our culture and employee engagement which fosters an environment where people can thrive and be their best. The results from our relentless focus on talent and culture are impressive. In fiscal year 2025, we delivered strong annual sales growth of 7% in a challenging industry environment. At the same time, we continued to improve our profitability, expanding our adjusted operating margin by 270 basis points to 7.1% year-over-year, and growing adjusted operating income to $31.2 million, a 71% year-overyear improvement. The increased profit and prudent working capital management generated $45 million of free cash flow, which enabled us to increase our dividend twice in fiscal year 2025 and build a strong cash position of $40 million at the end of the fiscal year. 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. Our strong performance in fiscal year 2025 is not only reflected in our financial results but also in the progress we ve made in developing our strategic capabilities and strengthening our competitive advantages. We invested in broadening our consumer research efforts and leveraged these insights to drive bigger, bolder innovation, increased product differentiation, and more relevant, on-trend designs. We also successfully invested in building stronger marketing capabilities and continue to scale marketing to strengthen our brand awareness and drive greater demand generation. Finally, we advanced growth in new and expanded markets, and I am encouraged by our success in the health and wellness category and compelling new lineup of casegood products. Looking Forward As we look forward to fiscal year 2026, we recognize that the external environment is dynamic, and we must remain agile to respond to material shifts in tariff policy, consumer spending, and other external influences on our industry. That said, we are deeply committed to maintaining a growth focus, and we will remain aggressive with our strategies and investments to pursue new growth and look for opportunities to strengthen our position in times of industry disruption.
In Closing I am proud of what we accomplished in fiscal year 2025 and believe that our long-term growth outlook remains promising. Flexsteel is financially strong, competing well, and gaining share. I m encouraged by our growth momentum, excited about our future, and confident in our ability to continue creating value for our customers and shareholders in fiscal year 2026. Thank you for your continued support. Sincerely, Derek P. Schmidt President and Chief Executive Officer
 • shareholder letter icon 10/24/2025 Letter Continued (Full PDF)
 • stockholder letter icon 10/26/2023 FLXS Stockholder Letter
 • stockholder letter icon 10/25/2024 FLXS Stockholder Letter
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 • Benford's Law Stocks icon FLXS Benford's Law Stock Score = 88


FLXS Shareholder/Stockholder Letter Transcript:

2025
Annual Report
Fiscal Year Ended
June 30, 2025


Dear Shareholders,
Fiscal year 2025 was a success for Flexsteel in terms of both financial results and strategic progress, and
our team drove outstanding performance despite difficult industry conditions. Our strategies and
investments are working well, and as a result, we are gaining share and competitively well positioned to
continue our positive momentum in fiscal 2026.
Perspectives on Fiscal Year 2025
I firmly believe that our greatest advantage is our talent and culture. We made great strides in the past year
recruiting, developing, and promoting high-potential talent who drive our strong execution, and in
strengthening our culture and employee engagement which fosters an environment where people can thrive
and be their best. The results from our relentless focus on talent and culture are impressive. In fiscal year
2025, we delivered strong annual sales growth of 7% in a challenging industry environment. At the same
time, we continued to improve our profitability, expanding our adjusted operating margin by 270 basis
points to 7.1% year-over-year, and growing adjusted operating income to $31.2 million, a 71% year-overyear improvement. The increased profit and prudent working capital management generated $45 million of
free cash flow, which enabled us to increase our dividend twice in fiscal year 2025 and build a strong cash
position of $40 million at the end of the fiscal year. 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.
Our strong performance in fiscal year 2025 is not only reflected in our financial results but also in the
progress we   ve made in developing our strategic capabilities and strengthening our competitive advantages.
We invested in broadening our consumer research efforts and leveraged these insights to drive bigger,
bolder innovation, increased product differentiation, and more relevant, on-trend designs. We also
successfully invested in building stronger marketing capabilities and continue to scale marketing to
strengthen our brand awareness and drive greater demand generation. Finally, we advanced growth in new
and expanded markets, and I am encouraged by our success in the health and wellness category and
compelling new lineup of casegood products.
Looking Forward
As we look forward to fiscal year 2026, we recognize that the external environment is dynamic, and we
must remain agile to respond to material shifts in tariff policy, consumer spending, and other external
influences on our industry. That said, we are deeply committed to maintaining a growth focus, and we will
remain aggressive with our strategies and investments to pursue new growth and look for opportunities to
strengthen our position in times of industry disruption.

In Closing
I am proud of what we accomplished in fiscal year 2025 and believe that our long-term growth outlook
remains promising. Flexsteel is financially strong, competing well, and gaining share. I   m encouraged by
our growth momentum, excited about our future, and confident in our ability to continue creating value for
our customers and shareholders in fiscal year 2026. Thank you for your continued support.
Sincerely,
Derek P. Schmidt
President and Chief Executive Officer



shareholder letter icon 10/24/2025 Letter Continued (Full PDF)
 

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