Key Highlights

  • Net sales were $147.2 million, down 3% from $152.4 million a year earlier.
  • Diluted EPS was $1.19, versus $2.07, while adjusted diluted EPS was $1.85, versus $2.22.
  • Adjusted EBITDA was $13.5 million, or 9.2% of net sales, against $15.6 million, or 10.2%.
  • Cash from operations was $10.8 million, and cash totaled $111.8 million with no debt.
  • The company repurchased 67,904 shares for $5.0 million, leaving $35.0 million of authorization.

Sales dip 3% as lower customer volumes outweigh pricing

Strattec (NASDAQ:STRT), a Milwaukee based supplier of access solutions for the automotive and mobility industries, reported fiscal 2027 first quarter results on October 29, 2026, for the quarter ended September 27, 2026. Its products span vehicle entry systems, powered access and latching.

Net sales were $147.2 million, a decrease of $5.2 million, or 3%, from $152.4 million. Pricing added $1.0 million, which only partly offset a $6.2 million impact from lower customer production volumes.

Gross Margin slips to 16.5% but improves from the prior quarter

Gross profit was $24.3 million, compared with $26.3 million, and gross margin contracted 80 basis points to 16.5%. The company said pricing, $0.9 million in restructuring savings, lower overhead and better mix were more than offset by lower volume, elevated premium freight and annual labor cost increases.

Unfavorable foreign currency exchange rates of $1.4 million weighed 90 basis points on gross margin. Sequentially, gross margin improved from 15.6% in the fourth quarter of fiscal 2026, which management presented as continued progress with its transformation.

Income from operations was $6.4 million, or 4.4% of sales, compared with $10.4 million, or 6.9%.

Business development costs explain much of the gap between GAAP and adjusted EPS

Selling, administrative and engineering expenses were $17.9 million, or 12.2% of sales, against $15.9 million, or 10.4%. The increase was due to $2.4 million in Business development expenses linked to advancing and evaluating Acquisition opportunities.

Excluding business development, business transformation and executive transition costs, adjusted expenses were $15.0 million, or 10.2% of sales, in line with the company's 10% to 11% target. The effective tax rate was 26.2%, up from 21.6% on discrete tax items.

Net income attributable to Strattec was $4.8 million, or $1.19 per diluted share, versus $8.5 million, or $2.07. Adjusted Net Income was $7.5 million, or $1.85 per share, versus $9.2 million, or $2.22. Adjusted EBITDA fell to $13.5 million from $15.6 million.

A cash pile of $111.8 million and a $35.0 million buyback runway

Cash provided by Operating Activities was $10.8 million, compared with $11.3 million a year earlier, while Capital spending was $1.2 million. Cash and cash equivalents were $111.8 million at September 27, 2026, up from $108.2 million at the end of fiscal 2026 and $90.5 million a year earlier, and the company had no outstanding debt.

Strattec repurchased 67,904 shares for $5.0 million in the quarter, with $35.0 million remaining under its repurchase authorization. Total shareholders' Equity was $265.1 million.

Cost actions and an active acquisition funnel frame what comes next

CEO Jennifer Slater said actions in Mexico operations are expected to generate $1.3 million in annualized savings, and that Supply chain improvements and automation offer further opportunities to reduce costs. She also said the company has an active acquisition funnel that could advance its long term strategy.

Readers following the name will likely watch whether gross margin builds on the 16.5% level, whether business development spending continues and how the large cash balance is deployed. A conference call was scheduled for October 30, 2026, at 8:00 a.m. Central Time.