What they do
Flexsteel Industries, of Dubuque, Iowa, is one of the largest manufacturers, importers and marketers of residential furniture products in the United States. Almost all of its sales are Flexsteel branded seating and casegoods; it is exiting its Homestyles ready-to-assemble line.
- FLXS
- $71.47 -4.7%
- US microcaps (IWC)
- -4.4%
- When
- Nov 6, 2026
Prices from Yahoo Finance; daily closes. Not adjusted for dividends.
Why we picked it
- 01$60.2M
The April buyback. On 26 April Flexsteel agreed to buy 1,279,870 shares from director F. Brooks Bertsch and family entities at $47.00 a share, about $60.2M, about 24% of the shares outstanding before the deal, at a 2.5% discount to the 24 April close. It closed on 28 April, paid with cash and borrowings on its credit line, and Bertsch left the board. The stock closed at $74.99 on 4 November.
- 023.2%
Sales still growing. First-quarter fiscal 2027 sales (the quarter to 30 September 2026) rose 3.2% to $114.0M, which CEO Derek Schmidt called the company's twelfth consecutive quarter of year-over-year growth. Flexsteel brand sales rose 5.1% to $112.6M while the Homestyles line it is exiting fell to $1.4M from $3.3M. Orders rose 5% and ending backlog 8.2%, and the company guides second-quarter sales of $119.5M to $123.0M, up 1% to 4%. See the numbers
- 03$1.24
Profit fell, per-share profit less. Operating income fell to $6.9M from $9.0M, a 6.0% margin against 8.1%, including a $0.8M (70 bps) foreign currency hit on peso assets in Mexico, and net income fell to $5.4M from $7.3M. With diluted shares down 22.0% to 4,365,000 from 5,598,000 after the buyback, diluted EPS fell less, to $1.24 from $1.31.
- 04$29.1M
No borrowings. At 30 September nothing was drawn on the $30.0M Wells Fargo credit line, with about $29.1M available, and working capital was $80.5M. In the quarter the company also bought 27,971 shares at an average of $78.08, $2.2M, and paid $1.1M of dividends; about $26.4M remains under its $30M buyback program.
The numbers behind it
Each bar is a quarter as Flexsteel Industries, Inc. filed it; hover one for its filing, or select it to open the filing.
The risk
Cash fell to $4.4M at 30 September from $16.7M at 30 June: operating cash flow was -$1.5M in the quarter and $6.5M went to tax withholding on vested shares and exercised options. Fiscal 2026 net income of $33.1M included IEEPA tariff refunds that the 10-K says added about 200 bps to gross margin, and it warns that retail partners, suppliers or others may claim part of them. The 25% Section 232 tariff on most of its upholstered seating is set to rise to 30% on 1 January 2027, and the CEO says ocean freight rates nearly doubled in six months. Two directors and three officers sold 35,664 shares,
Against its peers
Flexsteel Industries, Inc. next to listed companies in its industry closest to it in size, on growth, margins and valuation, each as it reported. Pick a figure; hover a company to light it.
Compare a figure
Operating margin, by quarter, Q4 '23 to Q3 '26
- Flexsteel Industries FLXS
- 6.0%
- XMax XMAX
- -44.5%Q2 '26
- HOOKER FURNISHINGS HOFT
- -245.8%Q2 '26
- Compass Diversified CODI
- 6.8%Q2 '26
- La-Z-Boy LZB
- -0.4%Q2 '26
A line that runs off the chart is past the scale; the figures above give its value.
GAAP operating income over revenue. A gap means a figure it needs is not stated for that period.
- XMax Inc. XMAX
- Same industry code as FLXS (2510, household furniture); similar in size: market value about $344M against FLXS's $297M.
- HOOKER FURNISHINGS Corp HOFT
- Same industry code as FLXS (2510, household furniture); similar in size: market value about $155M against FLXS's $297M.
- Compass Diversified Holdings CODI
- Same industry code as FLXS (2510, household furniture); larger: market value about $851M against FLXS's $297M.
- La-Z-Boy Inc LZB
- Same industry code as FLXS (2510, household furniture); larger: market value about $1.3B against FLXS's $297M.
Chosen automatically by industry code and size: US-listed companies with the pick's SEC industry code (SIC), closest in market value, with the rest of its three-digit industry group filling in when the code has fewer than three. Market value is the latest share count filed with the SEC times the last price from Yahoo; growth and margins come from each company's own filings.
The full analysis
Flexsteel Industries ($FLXS): a furniture maker that bought back about 24% of its shares, against thinner margins and less cash
Our view: bullish, because Flexsteel bought back about 24% of its shares in April at $47.00, sales are still growing with orders and backlog up, and nothing is drawn on its credit line, so each share now holds a larger part of a business the market values at about 10 times trailing earnings. The case needs margins to recover; for now they are falling, cash is low, and last year's profit included tariff refunds.
The thesis
Flexsteel Industries, Inc., of Dubuque, Iowa, is one of the largest manufacturers, importers and marketers of residential furniture products in the United States (results release, Oct 2026). Almost all of its sales are Flexsteel branded seating and casegoods; the Homestyles ready-to-assemble line, which it is exiting, was $1.4M of first-quarter sales (release). Our case is that a company still growing sales, with no borrowings, has cut its diluted share count by 22.0%, so per-share earnings hold up better than total profit while costs from tariffs, freight and currency press on margins.
The evidence
The April buyback. On 26 April Flexsteel agreed to buy 1,279,870 shares from director F. Brooks Bertsch and family entities at $47.00 a share, about $60.2M, about 24% of the shares outstanding before the deal, at a 2.5% discount to the 24 April close (8-K). It closed on 28 April, was paid with cash and borrowings on the company's revolving credit line, and Bertsch left the board (8-K). The stock closed at $74.99 on 4 November (Yahoo Finance and Nasdaq), and the 10-Q cover shows 4,161,973 shares outstanding at 28 October, a market value of about $312M (10-Q).
Sales still growing. Sales in the first quarter of fiscal 2027, to 30 September 2026, rose 3.2% to $114.0M from $110.4M, which CEO Derek Schmidt called the company's twelfth consecutive quarter of year-over-year growth (release). Flexsteel brand sales rose 5.1% to $112.6M, led by soft seating, while Homestyles fell to $1.4M from $3.3M (release). Orders rose 5% and ending backlog 8.2% against a year earlier, and the company guides second-quarter sales of $119.5M to $123.0M, up 1% to 4%, with a GAAP operating margin of 6.5% to 7.0% (release).
Profit fell, per-share profit less. Gross margin was 22.0% against 23.5%, and operating income fell to $6.9M from $9.0M, a 6.0% margin against 8.1%, including a $0.8M (70 bps) foreign currency hit on peso-denominated assets in Mexico (release). Net income fell to $5.4M from $7.3M (release). Because diluted shares fell 22.0% to 4,365,000 from 5,598,000, diluted EPS fell less, to $1.24 from $1.31 (release, 10-Q).
No borrowings. At 30 September nothing was drawn on the $30.0M Wells Fargo credit facility the company signed in August, about $29.1M was available, and working capital was $80.5M (10-Q, release). In the quarter it bought another 27,971 shares at an average of $78.08, $2.2M, and paid $1.1M of dividends; about $26.4M remains under its $30M buyback program (10-Q, release).
What the market is missing
The share count. The diluted share count is down 22.0% in a year, and the company keeps buying (10-Q). At $74.99 the market value is about $312M, about 10 times trailing twelve-month net income of $31.2M (10-K, release), though that figure includes the tariff refunds counted in fiscal 2026. Orders rose 5% and backlog 8.2% going into a second quarter the company guides to $119.5M to $123.0M of sales (release).
The risks
Cash fell to $4.4M at 30 September from $16.7M at 30 June: operating cash flow was -$1.5M in the quarter and $6.5M went to tax withholding on vested shares and exercised options (release). Fiscal 2026 net income of $33.1M included IEEPA tariff refunds that the 10-K says added about 200 bps to gross margin, and the company warns that retail partners, suppliers or others may claim part of them (10-K). The 25% Section 232 tariff on most of its upholstered seating is scheduled to rise to 30% on 1 January 2027 (10-K), and the CEO says ocean freight rates nearly doubled over the last six months (release). Two directors and three officers sold 35,664 shares, about $2.9M, at about $78 to $84 a share between 20 August and 15 September (Forms 4 and a Form 4/A). The CEO sold none in the open market; 11,858 of his shares were withheld for tax on an award on 19 August (Form 4).
What would change our mind
An operating margin below the 6.5% to 7.0% the company guides for the second quarter, sales below $119.5M, borrowing on the credit line to fund losses rather than buybacks, or a large claim against the tariff refunds.
Sources: Flexsteel first-quarter fiscal 2027 results release (8-K Exhibit 99.1, 26 Oct 2026); 10-Q for the quarter to 30 Sep 2026 (28 Oct 2026); 8-K on the share repurchase agreement (28 Apr 2026); 10-K for fiscal 2026 (19 Aug 2026); 10-Qs for the quarters to 31 Dec 2025 and 31 Mar 2026; Forms 4 filed 24 Aug to 17 Sep 2026 and a Form 4/A filed 2 Oct 2026; proxy statement (23 Oct 2026); closes from Yahoo Finance and Nasdaq, 4 Nov 2026.
By the numbers
| Quarter | Revenue | Gross margin | Net income | Cash | Debt | Diluted shares | Filing |
|---|---|---|---|---|---|---|---|
| Q3 2630 September 2026 | $114.0M | 22.0% | $5.4M | $4.4M | n/a | 4.4M | 10-Q, 28 October 2026 |
| Q2 26*30 June 2026 | $115.4M | 30.0% | $12.7M | $16.7M | n/a | n/a | 10-K, 19 August 2026 |
| Q1 2631 March 2026 | $115.1M | 22.6% | $6.4M | $57.3M | n/a | 5.7M | 10-Q, 22 April 2026 |
| Q4 2531 December 2025 | $118.2M | 22.7% | $6.6M | $36.8M | n/a | 5.6M | 10-Q, 4 February 2026 |
| Q3 2530 September 2025 | $110.4M | 23.5% | $7.3M | $38.6M | n/a | 5.6M | 10-Q, 28 October 2026 |
| Q2 2530 June 2025 | $114.6M | 23.9% | $10.7M | $40.0M | n/a | n/a | 10-K, 22 August 2025 |
| Q1 2531 March 2025 | $114.0M | 22.2% | -$3.7M | $22.6M | n/a | 5.3M | 10-Q, 22 April 2026 |
| Q4 2431 December 2024 | $108.5M | 21.0% | $9.1M | $11.8M | n/a | 5.6M | 10-Q, 4 February 2026 |
Source: the company's 10-Q and 10-K filings on SEC EDGAR, as tagged in their XBRL data. Each quarter uses the most recent filing that reports it, so restated quarters compare cleanly. Quarters are labelled by the calendar quarter they end in. Debt is current plus long-term debt; net income is as reported, including any discontinued operations. *Fourth quarter: the full year in the 10-K less the first nine months. n/a: not reported for that quarter on its own.
Insiders
Derek P. Schmidt, President and CEO own 4.3% of the shares (178,281 shares after the 19 Aug 2026 award and tax withholding against 4,161,973 shares outstanding at 28 Oct 2026; he also holds 79,000 options at $9.97 granted outside the company plans (10-Q).), according to the Form 4 filed 1 September 2026, as of 19 August 2026.
What to watch
- 9 December 2026
Annual meeting, held online. DEF 14A, 23 Oct 2026
- Quarter to 31 December 2026
The company guides second-quarter sales of $119.5M to $123.0M, up 1% to 4%, and a GAAP operating margin of 6.5% to 7.0%. Q1 FY27 release, 26 Oct 2026
- 1 January 2027
The Section 232 tariff on most of its upholstered seating is scheduled to rise to 30% from 25%, unless modified before then. 10-K for fiscal 2026, 19 Aug 2026
Sources: 8-K (28 Apr 2026), Q1 FY27 release (26 Oct 2026), 10-Q (28 Oct 2026), close 4 Nov 2026.
Market value: shares outstanding on the latest SEC filing cover page, times the latest price.
Returns: closes two of Nasdaq, Cboe and Yahoo Finance agree on within 1%, adjusted for splits, not for dividends.