Strattec Security 2025 Q4 Earnings Earnings Dip Amid Revenue Growth

Strattec Security (STRT) reported mixed results for fiscal 2025 Q4, with revenue rising but earnings declining. The company’s earnings missed expectations with a notable drop in net income and EPS. No formal guidance was provided, with the CEO expressing cautious optimism about long-term prospects while addressing near-term market uncertainties.

Revenue
The company's total revenue for Q4 2025 increased by 6.3% year-over-year to $152.01 million, reflecting a modest but positive trend in its core operations. This growth followed the release of its fiscal 2025 fourth-quarter gross margin expansion announcement on August 14, 2025.

Earnings/Net Income
Despite the revenue increase, Strattec Security's earnings performance declined. Earnings per share (EPS) fell 15.1% year-over-year to $2.05, and net income dropped to $8.06 million, a 19.9% decrease from the previous year. These figures indicate a challenging operating environment impacting profitability.

Price Action
Strattec Security’s stock price faced downward pressure in the short term, with a 5.02% drop on the latest trading day, an 11.53% decline for the week, and a 3.59% decline month-to-date. The post-earnings price action over the past three years, however, showed a historically strong 107.31% return from a strategy of buying shares after the report and holding for 30 days, outperforming the 57.31% benchmark return.

Post-Earnings Price Action Review
Over the past three years, a strategy of purchasing STRT shares after a quarterly revenue miss on the report date and holding for 30 days has delivered strong returns. This approach generated a 107.31% cumulative return, significantly outperforming the 57.31% benchmark return and yielding an excess return of 50%. The strategy’s annualized return (CAGR) stood at 28.57%, with a maximum drawdown of 0.00% and a Sharpe ratio of 0.54, reflecting a balanced risk-return profile despite the strategy’s high volatility of 52.90%. This historical performance suggests investor confidence in the company's long-term fundamentals, even in the face of short-term earnings underperformance.

CEO Commentary
Jennifer Slater, President and CEO, described fiscal 2025 as a year of transformation, emphasizing operational improvements, including $8 million in new pricing, $5 million in cost reductions, and working capital improvements. She acknowledged near-term headwinds, such as revised North American automotive production estimates and a lull in new vehicle launches, and outlined plans to stabilize operations and enhance competitive positioning.

Guidance
The company did not provide specific forward-looking financial targets in its earnings report. However, management indicated a focus on stabilizing operations, deepening customer relationships, and strengthening its market position, while maintaining a cautious outlook amid ongoing market uncertainties.

Additional News
In the three weeks following the earnings release, Strattec Security made several strategic and operational announcements. On August 14, 2025, the company expanded its gross margin in the fiscal 2025 fourth quarter and confirmed its participation at the Midwest IDEAS Investor Conference. Earlier, on July 31, 2025, the company announced a conference call and webcast for its Q4 financial results. Notably, on June 30, 2025, STRATTEC SECURITY CORPORATION was added to the Russell 2000® and Russell 3000® Indexes, signifying broader market recognition. The company also continued to generate strong cash flow, reporting $20.7 million in fiscal 2025 third-quarter operating cash flow on May 8, 2025. Additional investor relations events included scheduled appearances at the East Coast IDEAS Investor Conference and The LD Micro Invitational XV.