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Aug 25, 2026, 5:14 PM ETConsumer Cyclical

Strattec — Fiscal 2026 Earnings Summary

STRTSTRATTEC SECURITY CORP
Source

Financial Performance

  • Fiscal 2026 net sales reached $579.4 million, up from $565.1 million in fiscal 2025; fourth quarter sales were $151.8 million, relatively unchanged from $152.0 million in the prior-year period.
  • Full-year gross margin expanded to 16.5% from 15.0% in fiscal 2025; fourth quarter gross margin was 15.6% compared to 16.7% in the prior-year quarter.
  • GAAP net income attributable to Strattec for fiscal 2026 was $20.6 million ($5.00 diluted EPS), compared to $18.7 million ($4.58 diluted EPS) in fiscal 2025; fourth quarter GAAP net income was $3.9 million ($0.95 diluted EPS) versus $8.3 million ($2.01 diluted EPS) in the prior-year quarter.
  • Adjusted diluted EPS for the fourth quarter was $2.06, unchanged from the prior-year period; full-year adjusted diluted EPS was $6.88.
  • Fiscal 2026 Adjusted EBITDA was $50.5 million, a 15.3% increase over the prior year; fourth quarter Adjusted EBITDA was $12.5 million (8.3% of sales) compared to $13.0 million (8.5% of sales) in the prior-year quarter.
  • Cash from operations for the fourth quarter was $9.7 million, down from $30.2 million in the prior-year period.
  • The company ended the quarter with $108.2 million in cash and cash equivalents and no outstanding debt, having paid down the remaining $1.0 million in borrowings on the JV credit facility.

Guidance and Future Outlook

  • Management stated the near-term environment remains uncertain and emphasized the need to secure future OEM vehicle platforms.
  • The company plans to continue investing in product technologies, production automation, and customer relationships, supported by its strong cash position.
  • Management indicated the balance sheet strength allows for opportunities to enhance scale and diversify customers, products, and programs over time.

Business Segments and Product Lines

  • A majority of the fourth-quarter volume decline, including $3.2 million related to customer-cancelled EV programs, was offset by pricing actions.
  • Fourth quarter gross profit was $23.6 million, down from $25.4 million in the prior year, impacted by $1.9 million in higher costs from unfavorable foreign currency exchange rates and the loss of a $1.3 million incremental tooling gain from the prior year.
  • Restructuring savings of $0.8 million and a $0.9 million reduction in tariff charges were realized in the fourth quarter.
  • Selling, administrative, and engineering (SAE) expenses increased 3% to $17.5 million (11.5% of sales) in the fourth quarter, driven by $1.4 million in business transformation and executive transition costs.

Market and Competitive Landscape

  • Fourth quarter sales reflected better-than-expected OEM vehicle production volumes relative to industry forecasts.
  • Strattec operates in the global automotive access market, focusing on secure vehicle entry, powered access, and latching solutions.

Risks and Challenges

  • Fiscal 2026 results were impacted by foreign exchange pressure and the effect of tariffs.
  • Future uncertainties include general economic conditions, consumer demand, competitive and technological developments, customer purchasing actions, warranty provisions, labor disputes, foreign currency fluctuations, U.S. trade policies, tariffs, and raw material cost fluctuations.

Management Commentary and Tone

  • President and CEO Jennifer Slater described fiscal 2026 as a year of progress and discipline, noting the company reshaped itself into a more resilient, higher-performing business.
  • Management highlighted delivering year-over-year growth in sales and gross margin expansion through disciplined pricing, cost actions, and operational improvements despite external headwinds.
  • The tone reflected a focus on managing costs and capital prudently while positioning the company to benefit when industry conditions improve.

Other Key Points

  • The company repurchased 110,269 shares for $7.4 million in the fourth quarter at an average price of $67.10.
  • Strattec authorized a new $40 million share buyback program.
  • Interest income grew by $0.1 million due to higher cash balances, while interest expenses declined by $0.2 million due to lower borrowings.
  • Other income increased by $1.4 million primarily due to changes in foreign currency exchange rates.
  • The company paid down the remaining $1.0 million in outstanding borrowings on the JV credit facility during the quarter.