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Hooker Furnishings Corp (HOFT) Q1 2026 Earnings Call Highlights: Navigating Challenges with ...
Consolidated Net Sales: $85.3 million, a decrease of $8.3 million or 8.8% compared to the same period last year.
Operating Loss: Reduced by $1.6 million or 31% to $3.6 million.
Operating Expenses: Reduced by $2.2 million despite $523,000 in restructuring costs.
Gross Margin Improvement: Increased by 190 basis points.
Net Loss: $3.1 million or $0.29 per diluted share, improved from the prior year's net loss of $4.1 million or $0.39 per diluted share.
Hooker Branded Segment: Achieved breakeven for the quarter.
Domestic Upholstery Segment: Operating losses reduced by 55%.
Home Meridian Segment: Operating losses reduced by 17%.
Cash and Cash Equivalents: $18 million, an increase of $11.7 million from year-end.
Inventory Levels: Decreased from about $71 million at year-end to about $64 million at quarter end.
Available Borrowing Capacity: About $40 million under revolving credit facility as of quarter end.
Cost Reduction Strategy: Aimed at achieving approximately $25 million in annualized savings by next fiscal year.
Vietnam Warehouse: Opened a new facility to enhance supply chain efficiency and reduce lead times from about six months to four to six weeks.
Warning! GuruFocus has detected 3 Warning Signs with HOFT.
Release Date: June 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Hooker Furnishings Corp (NASDAQ:HOFT) reduced its operating loss by $1.6 million or 31% compared to the previous year, reflecting successful cost reduction initiatives.
The company improved gross margins by 190 basis points, driven by better margins at Home Meridian and Domestic Upholstery.
Hooker Branded achieved breakeven for the quarter, and Domestic Upholstery and Home Meridian significantly reduced their operating losses by 55% and 17%, respectively.
The new Vietnam warehouse is expected to enhance supply chain efficiency, reducing lead times from about six months to four to six weeks, with positive initial customer feedback.
The company anticipates achieving approximately $25 million in annualized savings by the next fiscal year through its multipronged cost reduction strategy.
Consolidated net sales decreased by $8.3 million or 8.8% compared to the same period last year, primarily due to a double-digit sales decrease at Home Meridian.
The home furnishings industry is facing challenges due to persistent softness in the housing market, higher mortgage rates, and declining consumer sentiment.
Import tariffs have sharply curtailed demand in the mid-price segment, impacting Home Meridian's sales.
The company recorded a net loss of $3.1 million or $0.29 per diluted share, although this was an improvement from the prior year's first quarter.
Uncertainties around import tariffs, particularly for products sourced from Vietnam, continue to create significant uncertainty and impact consumer confidence.
Q: Can you comment on the cadence of shipments from February through April, particularly after Liberation Day? A: The cadence changed drastically due to tariffs, affecting the HMI customer more than the Hooker Branded and Domestic Upholstery side of our business. - Jeremy Hoff, CEO
Q: What drove the higher orders at Hooker Legacy brands in May, and any updates on HMI since April? A: The increase is due to our broadened merchandising strategy with collected living, which is starting to show positive effects. For HMI, there's still significant uncertainty due to tariffs, particularly with the upcoming July 9 date. - Jeremy Hoff, CEO
Q: How will the cost savings initiatives progress for the rest of the year? A: We expect about $2.5 million less in costs compared to last year due to Phase 1. Phase 2 initiatives will have a $250,000 positive impact in Q2, with significant savings expected in Q4, around $3.5 million. - Earl Armstrong, CFO
Q: What are your capital allocation priorities after dividends and debt? Could there be share buybacks? A: Strengthening the balance sheet is our top priority, followed by dividends. We have no current plans for share buybacks. - Jeremy Hoff, CEO
Q: Do you expect the strong May performance to continue throughout the year, and how will seasonality affect revenue? A: Historically, the second half is stronger than the first. While May was strong, it's uncertain if this momentum will continue throughout the year. - Jeremy Hoff, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
