Strattec Q4 sales rise 6.3%

Overview

• Automotive access control products maker Strattec Security Corp fiscal Q4 net sales rise 6.3%

• Adjusted EPS for fiscal Q4 beats estimates, reflecting operational improvements

• Gross margin expands to 16.7% from 13.0% yr/yr, aided by cost management

Outlook

• Company faces near-term market uncertainty due to revised auto production estimates

• Strattec plans to stabilize operations and deepen customer relationships

• Company aims to enhance product roadmaps and improve competitive position

Result Drivers

• GROSS MARGIN EXPANSION - Gross margin improved to 16.7% from 13.0% in the prior year period, driven by favorable foreign currency exchange, restructuring savings, improved pricing, and higher volume, per CEO Jennifer Slater

• SALES GROWTH - Net sales increased by 6.3% to $152 mln, driven by $3.7 mln in additional pricing, $4.1 mln from higher demand, $1.2 mln from new program launches, and favorable sales mix

• TARIFF IMPACT - Company faced a $1.6 mln net impact from tariffs and $1.1 mln higher labor costs in Mexico, with tariff recovery expected to lag

Key Details

Analyst Coverage

• Wall Street's median 12-month price target for Strattec Security Corp is $63.00, about 29.8% below its August 13 closing price of $81.76

• The stock recently traded at 23 times the next 12-month earnings vs. a P/E of 9 three months ago

Press Release: ID:nBw3qrfqja