Dixie Group (OTCQB: DXYN) cuts 2025 loss with stronger margins and cost cuts
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
The Dixie Group, Inc. reported a smaller net loss for 2025 while facing lower sales and tariff headwinds. Net sales for the year were $257.4 million, down 2.9% from 2024, but the net loss narrowed to $7.6 million from $13.0 million as gross margin improved.
Gross margin rose to 27.0% of net sales in 2025 from 24.7% a year earlier, helped by lower raw material and manufacturing costs and tighter spending, including a $2.2 million reduction in selling and administrative expenses. Fourth-quarter net sales slipped slightly, but the quarterly net loss more than halved versus 2024.
Management highlighted ongoing softness in residential flooring demand, the negative impact of “Liberation Day” and other tariffs of about $1.4 million in 2025, and total IEPPA tariff payments of approximately $3.3 million through March 2026. The company has launched a $13 million profit improvement plan for 2026, emphasizing price increases, cost reductions, and higher-end soft-surface flooring where it believes it is gaining market share.
Positive
- Loss reduction and margin expansion: 2025 net loss shrank to $7.6 million from $13.0 million as gross margin improved to 27.0% of net sales from 24.7%, indicating better pricing and cost control.
- Profit improvement plan: Management initiated a $13 million profit improvement plan for 2026, including price increases and reductions in selling and administrative costs aimed at further strengthening profitability.
- Relative market share gains: Soft-surface sales were down less than 1% year over year, while management believes the industry declined about 4–5%, suggesting share gains in core carpet markets.
Negative
- Ongoing net losses and leverage: The company remained unprofitable in 2025 with a $7.6 million net loss, and stockholders’ equity fell to $8.8 million against total debt (current and long term) of more than $80 million.
- Tariff and demand headwinds: “Liberation Day” and related tariffs negatively impacted 2025 results by about $1.4 million, with total IEPPA tariff payments of approximately $3.3 million through March 2026 amid weak residential flooring demand.
Insights
Dixie narrows losses on stronger margins despite softer demand.
The Dixie Group delivered margin-driven improvement in 2025 even as revenue declined modestly. Net sales fell to $257.4 million, but the net loss narrowed to $7.6 million, supported by a gross margin increase to 27.0% from 24.7%.
Cost discipline helped: selling and administrative expenses decreased by $2.2 million year over year, and capital expenditures dropped to $0.6 million. Management cited focus on higher-end soft-surface products and design differentiation, and believes it continued to gain carpet market share during an industry downturn.
Headwinds included “Liberation Day” and related tariffs, which reduced 2025 results by roughly $1.4 million, with total IEPPA tariff payments of about $3.3 million through March 2026. A $13 million profit improvement plan for 2026, centered on price actions and cost cuts, is intended to further enhance earnings, though execution will depend on demand trends and tariff dynamics outlined in future company disclosures.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 26, 2026
(Exact name of registrant as specified in its charter)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
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1
Item 2.02. Results of Operations and Financial Condition.
On March 26, 2026, The Dixie Group, Inc. issued a press release reporting results for the year ended December 27, 2025.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
(99.1) Press Release, dated March 26, 2026
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: | THE DIXIE GROUP, INC. | |||||||
By: /s/ Allen L. Danzey | ||||||||
| Allen L. Danzey | ||||||||
| Chief Financial Officer | ||||||||
Exhibit 99.1
CONTACT: Allen Danzey
Chief Financial Officer
706-876-5865
allen.danzey@dixiegroup.com
THE DIXIE GROUP REPORTS FINANCIAL RESULTS FOR THE FOURTH QUARTER AND THE FISCAL YEAR 2025
DALTON, GEORGIA (March 26, 2026) -- The Dixie Group, Inc. (OTCQB: DXYN) today reported financial results for the fourth quarter and the year ended December 27, 2025.
In the fourth quarter of 2025, net sales were $63,487,000 or 1.4% below the net sales in the fourth quarter of 2024 at $64,338,000. The net loss for the fourth quarter of 2025 was $3,001,000. This compares to a net loss of $7,198,000 in the fourth quarter of 2024.
For the fiscal year 2025, net sales for the Company were $257,429,000 or 2.9% below the net sales of $265,026,000 in the fiscal year 2024. The net loss from continuing operations on the year was $7,275,000 in 2025, or $0.50 per diluted share, compared to a net loss of $12,210,000, or $0.83 per diluted share, in 2024. The net loss on the year was $7,615,000, or $0.52 per diluted share, compared to a net loss of $13,000,000, or $0.88 per diluted share, in 2024.
Commenting on the results, Daniel K. Frierson, Chairman and Chief Executive Officer, said, “In 2025, we continued to navigate through a challenging economic environment while staying focused on strategic internal initiatives. Our focus on higher-end flooring markets, operational efficiency and disciplined cost management enabled us to improve year over year gross profit margins and financial results despite ongoing softness in residential demand. We were forced to manage the unexpected implementation of “Liberation Day” tariffs and other tariff measures throughout much of 2025. We implemented price increases in order to mitigate the financial impact of the tariffs, however, the difference in timing of the tariffs and the price increases resulted in a negative financial impact on the year of approximately $1.4 million. Our total payment of IEPPA tariffs through March of 2026 was approximately $3.3 million.
As we closed out 2025 we implemented key drivers as part of a profit improvement plan for 2026 totaling $13 million in year over year improvements. These improvements range from price increases to reductions in selling expenses and administrative costs.
Throughout 2025 our sales and marketing strategy focused on our strengths in design and color through our Step into Color campaign. Through this initiative we have showcased colors in our standard palette that stands out from our competitors. We also launched an updated custom color program giving our retail and designer partners the ability to custom color any of our white dyeable nylon products. We are building on this momentum in 2026 through several key growth initiatives with our larger retail accounts and buying groups.
Our soft surface sales for both the fourth quarter and the year were down less than 1% from the year ago periods. We believe the industry was down approximately 4% for the quarter and approximately 5% on the year, both in comparison to the same prior year periods. Consequently, we continued to gain market share in the carpet market
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The Dixie Group Reports 2025 Results
Page 2
March 26, 2026
during this difficult period. So far in 2026, our sales pattern is similar to the prior year with sales of soft surfaces down slightly but performing better than our hard surface products.
Despite recent reductions in interest rates, market conditions remain uncertain as the overall flooring industry continues to be negatively impacted by low existing home sales, delayed remodeling projects due to low consumer confidence and limited housing availability. Historically, such prolonged periods of decline in the flooring markets have been followed by several periods of strong growth driven by pent up consumer demand. We believe the actions we have taken position us well for long-term growth and value creation." Frierson concluded.
The gross margin for the fiscal year 2025 was 27.0% of net sales as compared to 24.7% in the fiscal year 2024. The year over year gross margin improvement was the result of reduced costs of raw materials and manufacturing operations. In the fourth quarter of 2025, gross margins were 27.0% compared to 21.7% in the same period of the prior year. Selling and administrative costs for the fiscal year were $67.7 million or $2.2 million lower than the prior year of $69.9 million. This was primarily due to lower spending on samples in 2025.
The Company's net receivables were $23.0 million at the end of the fiscal year 2025 compared to $23.3 million at fiscal year end 2024. Net inventories were $66.4 million, a decrease of $500 thousand from the fiscal year 2024 balance of $66.9 million. The total of the balances in accounts payable and accrued expenses increased by $8.9 million over the prior year. This increase was the result of timing of payments and extended terms with key vendors. Capital expenditures in 2025 were $598 thousand compared to $2.1 million in the prior fiscal year. Interest expense was $7.3 million in 2025 compared to $6.4 million in 2024. The year over year increase was primarily due to higher interest rates.
This press release contains forward-looking statements. Forward-looking statements are based on estimates, projections, beliefs and assumptions of management and the Company at the time of such statements and are not guarantees of performance. Forward-looking statements are subject to risk factors and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements. Such factors include the levels of demand for the products produced by the Company. Other factors that could affect the Company's results include, but are not limited to, availability of raw material and transportation costs related to petroleum prices, the cost and availability of capital, integration of acquisitions, ability to attract, develop and retain qualified personnel and general economic and competitive conditions related to the Company's business. Issues related to the availability and price of energy may adversely affect the Company's operations. Additional information regarding these and other risk factors and uncertainties may be found in the Company's filings with the Securities and Exchange Commission. The Company disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information, or otherwise.
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The Dixie Group Reports 2025 Results
Page 3
March 26, 2026
THE DIXIE GROUP, INC.
Consolidated Condensed Statements of Operations
(unaudited; in thousands, except earnings (loss) per share)
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
| December 27, 2025 | December 28, 2024 | December 27, 2025 | December 28, 2024 | ||||||||||||||||||||
| NET SALES | $ | 63,487 | $ | 64,388 | $ | 257,429 | $ | 265,026 | |||||||||||||||
| Cost of sales | 46,335 | 50,430 | 187,880 | 199,515 | |||||||||||||||||||
| GROSS PROFIT | 17,152 | 13,958 | 69,549 | 65,511 | |||||||||||||||||||
| Selling and administrative expenses | 17,657 | 18,541 | 67,673 | 69,850 | |||||||||||||||||||
| Other operating expense, net | 352 | 59 | 1,209 | 200 | |||||||||||||||||||
| Facility consolidation and severance expenses, net | 200 | 555 | 549 | 1,327 | |||||||||||||||||||
| OPERATING INCOME (LOSS) | (1,057) | (5,197) | 118 | (5,866) | |||||||||||||||||||
| Interest expense | 1,932 | 1,600 | 7,309 | 6,380 | |||||||||||||||||||
| Other (income) expense, net | (56) | (15) | 11 | (7) | |||||||||||||||||||
| LOSS FROM CONTINUING OPERATIONS BEFORE TAXES | (2,933) | (6,782) | (7,202) | (12,239) | |||||||||||||||||||
| Income tax provision (benefit) | 17 | (45) | 73 | (29) | |||||||||||||||||||
| LOSS FROM CONTINUING OPERATIONS | (2,950) | (6,737) | (7,275) | (12,210) | |||||||||||||||||||
| Loss from discontinued operations, net of tax | (51) | (461) | (340) | (790) | |||||||||||||||||||
| NET LOSS | $ | (3,001) | $ | (7,198) | $ | (7,615) | $ | (13,000) | |||||||||||||||
| BASIC LOSS PER SHARE: | |||||||||||||||||||||||
| Continuing operations | $ | (0.20) | $ | (0.47) | $ | (0.50) | $ | (0.83) | |||||||||||||||
| Discontinued operations | (0.01) | (0.03) | (0.02) | (0.05) | |||||||||||||||||||
| Net loss | $ | (0.21) | $ | (0.50) | $ | (0.52) | $ | (0.88) | |||||||||||||||
| DILUTED LOSS PER SHARE: | |||||||||||||||||||||||
| Continuing operations | $ | (0.20) | $ | (0.47) | $ | (0.50) | $ | (0.83) | |||||||||||||||
| Discontinued operations | (0.01) | (0.03) | (0.02) | (0.05) | |||||||||||||||||||
| Net loss | $ | (0.21) | $ | (0.50) | $ | (0.52) | $ | (0.88) | |||||||||||||||
| Weighted-average shares outstanding: | |||||||||||||||||||||||
| Basic | 14,533 | 14,358 | 14,481 | 14,639 | |||||||||||||||||||
| Diluted | 14,533 | 14,358 | 14,481 | 14,639 | |||||||||||||||||||
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The Dixie Group Reports 2025 Results
Page 4
March 26, 2026
THE DIXIE GROUP, INC.
Consolidated Condensed Balance Sheets
(in thousands)
| December 27, 2025 | December 28, 2024 | ||||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 3,204 | $ | 19 | |||||||
| Receivables, net of allowances of expected credit losses of $640 and $454 | 22,984 | 23,325 | |||||||||
| Inventories, net | 66,370 | 66,852 | |||||||||
| Prepaid expenses | 5,391 | 5,643 | |||||||||
| Total Current Assets | 97,949 | 95,839 | |||||||||
| PROPERTY, PLANT AND EQUIPMENT, NET | 29,154 | 33,747 | |||||||||
| OPERATING LEASE RIGHT-OF-USE ASSETS | 23,649 | 25,368 | |||||||||
| RESTRICTED CASH | 3,865 | — | |||||||||
| OTHER ASSETS | 19,488 | 19,854 | |||||||||
| LONG-TERM ASSETS OF DISCONTINUED OPERATIONS | 1,053 | 1,064 | |||||||||
| TOTAL ASSETS | $ | 175,158 | $ | 175,872 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| CURRENT LIABILITIES | |||||||||||
| Accounts payable | $ | 22,781 | $ | 14,884 | |||||||
| Accrued expenses | 16,043 | 15,057 | |||||||||
| Current portion of long-term debt | 56,642 | 53,818 | |||||||||
| Current portion of operating lease liabilities | 4,553 | 3,804 | |||||||||
| Current liabilities of discontinued operations | 1,073 | 1,156 | |||||||||
| TOTAL CURRENT LIABILITIES | 101,092 | 88,719 | |||||||||
| LONG-TERM DEBT, NET | 25,096 | 28,530 | |||||||||
| OPERATING LEASE LIABILITIES | 20,200 | 22,295 | |||||||||
| OTHER LONG-TERM LIABILITIES | 16,651 | 16,712 | |||||||||
| LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS | 3,321 | 3,398 | |||||||||
| Stockholders' Equity | 8,798 | 16,218 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 175,158 | $ | 175,872 | |||||||
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FAQ
How did The Dixie Group (DXYN) perform financially in 2025?
The Dixie Group reduced its 2025 net loss to about $7.6 million from $13.0 million in 2024. Net sales declined 2.9% to $257.4 million, but higher gross margins and lower selling and administrative expenses improved overall financial results despite ongoing industry weakness.
What were The Dixie Group’s fourth-quarter 2025 results?
In the fourth quarter of 2025, The Dixie Group generated net sales of approximately $63.5 million, slightly below the prior year. The quarterly net loss narrowed to about $3.0 million versus $7.2 million a year earlier, helped by a gross margin increase to 27.0% from 21.7%.
How did tariffs affect The Dixie Group’s 2025 results?
Management reported that “Liberation Day” and other tariffs reduced 2025 financial results by roughly $1.4 million due to timing differences between tariffs and price increases. Total IEPPA tariff payments reached approximately $3.3 million through March 2026, adding pressure during an already soft demand environment.
What margin trends did The Dixie Group (DXYN) report for 2025?
The company’s gross margin improved to 27.0% of net sales in 2025, up from 24.7% in 2024. Management attributed this expansion to lower raw material and manufacturing costs, along with tighter operational efficiency and cost control initiatives across the business.
What cost actions is The Dixie Group taking for 2026?
The Dixie Group implemented a profit improvement plan targeting $13 million of year-over-year benefits in 2026. The program includes price increases, and reductions in selling expenses and administrative costs, aiming to build on 2025 margin gains despite uncertain flooring market conditions.
How is The Dixie Group’s balance sheet positioned at year-end 2025?
At December 27, 2025, the company reported total assets of about $175.2 million and stockholders’ equity of $8.8 million. Current liabilities were $101.1 million, including $56.6 million of current long-term debt, while restricted cash increased to $3.9 million from zero in 2024.