Strattec Security (STRT) Q4 2026 earnings summary

Executive summary

• Fiscal 2026 sales reached $579.4 million, with Q4 sales of $151.8 million, essentially flat year-over-year but above expectations.

• Gross margin expanded by 150 basis points to 16.5%, reflecting disciplined pricing and operational improvements.

• Transformation initiatives delivered $6 million in annual savings and $9.5 million since fiscal 2025, improving earnings power.

• Strong cash position with $108.2 million and no debt at year-end; $46.3 million in operating cash flow generated.

• $7.4 million returned to shareholders via Q4 buybacks; new $40 million repurchase program authorized.

Financial highlights

• Full-year net sales rose 2.5% to $579.4 million; Q4 net sales were $151.8 million, flat year-over-year.

• Full-year gross profit was $95.4 million (16.5% margin); Q4 gross profit was $23.6 million (15.6% margin).

• Adjusted EBITDA for FY26 was $50.5 million (8.7% margin), up 15% year-over-year.

• Adjusted net income for FY26 was $28.4 million; adjusted diluted EPS was $6.88.

• Cash from operations for FY26 was $46.3 million; free cash flow was $39.0 million.

Outlook and guidance

• Fiscal 2027 expected to see a 2% decline in North American automotive production and a 6% decline at top three customers.

• Revenue will track customer production, program mix, pricing, and aftermarket demand; typical Q2 seasonality anticipated.

• FX headwinds expected, especially from a stronger Mexican peso; a 5% USD/MXN move could impact costs by $4 million.

• Targeting long-term gross margins of 18%-20% if FX normalizes; near-term margins may be pressured.

• Operating cash flow expected to normalize at ~$10 million per quarter; $12 million in CapEx planned for fiscal 2027.