Strattec Security Corporation Q1 2027 Earnings Recap

Strattec shares fell 2.6%, a roughly flat reaction, as first-quarter sales and earnings declined year over year amid lower customer production, currency pressure, and supply-chain costs. Gross margin improved sequentially, but remained lower year over year.

Key Takeaways

• Sales were $147.2 million, down 3.4% year over year; lower customer production reduced sales by $6.2 million, partly offset by $1.0 million in pricing benefits.
• Gross margin was 16.5%, down 80 basis points year over year. Lower volumes, $1.4 million of unfavorable foreign-currency effects, and elevated premium freight and overtime weighed on results.
• Gross margin improved 90 basis points sequentially, while adjusted EBITDA rose to $13.5 million from $12.5 million in the fourth quarter.
• Operating cash flow was $10.8 million; Strattec ended the quarter with $111.8 million in cash and no debt, after repurchasing about 68,000 shares for $5 million.
• New Mexico restructuring actions are expected to generate $1.3 million in annualized savings; the company cited more than $10 million in annualized savings from initiatives launched since fiscal 2025.