Phil Desilanth's questions to Flexsteel Industries Inc (FLXS) leadership • Q4 2025
Question
Phil Desilanth of Tieton Capital Management asked for a characterization of consumer demand amid a slow housing market and tariff uncertainty, and also sought to clarify the financial impact of the strengthening Mexican peso on operating margins.
Answer
President and CEO Derek Schmidt described current consumer demand as 'choppy,' attributing the softness to tariff uncertainty and interest rates, but expressed long-term optimism and highlighted the upcoming Labor Day sales period as a key indicator. CFO Mike Ressler clarified that the strengthening peso resulted in a $1.9 million favorable translation gain in Q4, which was an abnormally large quarterly fluctuation. He noted that without this gain, the adjusted operating margin would have been closer to 7.3%, near the top of their guidance.