Strattec Security Corporation

What they do

Strattec designs and manufactures highly engineered automotive access and security products, including locks and locksets, vehicle start systems, engineered latches, power access solutions, door handles, keys and fobs. Final assembly is primarily done in Mexico, with about 65% of sales shipped to U.S. customer production sites. The majority of revenue comes from General Motors, Ford, and Stellantis.

Revenue drivers

• General Motors — Largest customer, accounting for 29% of fiscal 2025 sales.
• Ford Motor Company — Second-largest customer, representing 23% of fiscal 2025 sales.
• Stellantis — Third-largest customer, contributing 12% of fiscal 2025 sales.
• Product lines — Revenue derived from locks & locksets, vehicle start systems, engineered latches, power access solutions, door handles, keys & fobs, and other vehicle access products.

Recent performance

Fiscal 2025 revenue rose 5.1% to $565.1 million, with net income of $18.7 million ($4.58 per diluted share) and operating cash flow of $71.7 million. In the third quarter of fiscal 2026 (ended March 29, 2026), sales fell 4.5% to $137.6 million, largely due to lower OEM production volumes and $3.4 million from customer EV program cancellations. Net income attributable to Strattec was $3.2 million, or $0.78 per diluted share, down from $5.4 million a year earlier. Gross margin improved 50 basis points to 16.5%, and the company ended the quarter with $107.0 million in cash.

Strategy

Management is executing a business transformation focused on upgrading systems and processes, modernizing support functions, and improving manufacturing productivity. Restructuring of Milwaukee and Mexico operations is expected to generate about $5 million in annual cost reductions. The company aims to strengthen profitability and deliver sustainable sales growth by leveraging engineering expertise to win new platforms and expand customer relationships. Cash generated will be reinvested in transformation and growth initiatives.

Risks

• Customer concentration — GM, Ford, and Stellantis together account for 64% of fiscal 2025 sales; loss of any customer or program could materially hurt revenue.
• Tariff exposure — Recent U.S. tariffs could add $5–$7 million annually to cost of goods sold before mitigation, with uncertainty around future trade actions.
• Production volume declines — North American light vehicle production is forecast to drop 5–6% in fiscal 2026, directly reducing demand for the company's products.
• Foreign exchange and labor costs — Mexico operations expose the company to peso fluctuations and government-mandated wage inflation, which increased costs in the latest quarter.

Outlook

Management expects fiscal 2026 North American OEM production to decline approximately 5–6%, followed by recovery in fiscal 2027 and 2028. Tariffs and related demand impacts remain uncertain, but the company is pursuing supply chain changes, customer pass-throughs, and logistics improvements to offset cost increases. The focus remains on improving cost structure and positioning for new platforms for model year 2029 and beyond.