Order Backlog and Sales Performance - As of May 4, 2025, the consolidated order backlog decreased by 2.7% from February 2, 2025, and by 40.3% from the same period last year, totaling $51.203 million[79]. - The Home Meridian segment's backlog fell significantly due to reduced demand and the loss of orders from a major customer that filed for bankruptcy in 2024[79]. - The consolidated order backlog for the Hooker Branded segment was $13.479 million, showing a slight increase from $13.109 million in the previous quarter but a decrease from $17.129 million year-over-year[79]. - The Domestic Upholstery segment's backlog increased to $19.401 million from $18.123 million in the previous quarter, indicating positive momentum[79]. - The Home Meridian segment's backlog was $18.069 million, down from $21.002 million in the previous quarter and significantly lower than $49.396 million year-over-year[79]. - Consolidated net sales for the first quarter were $85.3 million, a decrease of $8.3 million, or 8.8%, compared to the same period last year[83]. - Home Meridian accounted for over 90% of the sales decrease, with a net sales drop of $7.6 million, or 28.8%[94]. - Domestic Upholstery segment's net sales decreased by $1.1 million, or 3.7%, primarily due to decreased sales of indoor residential home furnishings[94]. Economic and Market Conditions - Existing home sales have remained around 75% of pre-pandemic levels for the past three years, indicating sluggishness in the housing market despite job growth[80]. - The average 30-year fixed mortgage rate in 2025 has been approximately 6.8%, a significant increase from the pandemic-era lows of about 3%[81]. - The University of Michigan's Consumer Sentiment Index dropped to 52.2 in May 2025, reflecting a nearly 30% decline since January 2025, indicating deteriorating consumer confidence[82]. - Macroeconomic factors, including high mortgage rates and low consumer confidence, are dampening demand in the home furnishings industry[80]. Financial Performance and Cost Management - Gross margin increased by 180 bps, driven by higher margins at Home Meridian and Domestic Upholstery, despite a decrease in net sales[84]. - Consolidated operating loss reduced by $1.6 million, or 31%, to $3.6 million, reflecting cost reduction initiatives[84]. - The company expects to achieve approximately $25 million in annualized savings by fiscal year 2027 through multi-phased cost reduction initiatives[85]. - Selling and administrative expenses decreased by $1.8 million in the first quarter, driven by cost reduction measures across all segments[96]. - The company anticipates net savings of over $14 million annually from fiscal 2027 as a result of ongoing cost reduction efforts[88]. - The company reported an operating loss of $3.6 million for the first quarter of fiscal 2026, an improvement of $1.6 million compared to the prior year[100]. - Consolidated net loss for the first quarter of fiscal 2026 was $3.1 million, a 25.4% improvement from a net loss of $4.1 million in the first quarter of fiscal 2025[102]. - Cash provided by operating activities increased to $14.7 million in the first quarter of fiscal 2026, up from $1.5 million in the prior year, driven by improved collections and inventory optimization[107]. Capital Expenditures and Investments - The company plans to spend approximately $2 to $3 million in capital expenditures over the remainder of fiscal 2026 to enhance operating systems and facilities[125]. - The ERP system upgrade is ongoing, with implementation completed in some divisions, although the project has been paused in the Home Meridian segment due to cost reduction initiatives[126]. Market Initiatives and Growth Strategies - The new Margaritaville licensing program and the Collected Living whole-home merchandising approach were highlighted as key initiatives for market expansion[105]. - A redesigned corporate website is set to launch in October, aimed at enhancing digital customer experience and supporting omni-channel growth[106]. - The company is experiencing modest improvement in furniture retail sales, with April sales up 5.6% year-over-year, although existing home sales remain subdued[103]. Risk Factors - The company faces risks related to tariff-related buying hesitancy among customers, particularly in value-focused segments[79]. - The company is exposed to market risk from changes in the cost of raw materials, particularly wood, fabric, and foam products, which could increase due to rising home construction activity[131]. - The company negotiates firm pricing in U.S. Dollars for imported products, primarily from suppliers in Vietnam and China, but remains exposed to foreign currency exchange rate fluctuations[132]. - A relative decline in the value of the U.S. Dollar could increase the price paid for imported products beyond negotiated periods, potentially impacting sales volume or profit margins[133]. Debt and Financial Obligations - The company had $22.6 million in outstanding loans and $6.7 million in letters of credit as of May 4, 2025, with $40.7 million of availability based on the current borrowing base[124]. - As of May 4, 2025, the company had $22.6 million in principal amount of outstanding loans, with a potential annual increase in interest expenses of approximately $226,000 for a 1% increase in the SOFR rate[130]. Dividends - The board of directors declared a quarterly cash dividend of $0.23 per share, payable on June 30, 2025, to shareholders of record at June 16, 2025[127].

Core Viewpoint - Hooker Furniture Corporation (HOFT) reported disappointing Q1 FY26 results, with revenues and operating income below consensus estimates, reflecting ongoing challenges in the macroeconomic and furniture retail environment [1][7]. Financial Performance - HOFT reported revenue of $85.3 million, operating income of ($3.6) million, and adjusted EPS of ($0.29), compared to consensus estimates of $92.6 million, ($2.5) million, and ($0.16) [1]. - The revenue represented an 8.8% year-over-year decrease, primarily due to decreased volumes and tariff impacts on the HMI segment [1]. Gross Profit Margin - Despite the challenges, HOFT achieved a consolidated gross profit margin (GPM) of 22.3%, which is an increase of 173 basis points quarter-over-quarter [1][7]. Cost Management - The company successfully reduced fixed costs by 25%, amounting to approximately $25.0 million, with full realization expected by FY27 [1][7]. Market Conditions - The macroeconomic environment remains challenging, characterized by varying interest rates, a maintained housing shortage, and elevated home prices, contributing to a prolonged downturn in the furniture retail sector [1].

Financial Data and Key Metrics Changes - Consolidated net sales for the first quarter were $85.3 million, a decrease of $8.3 million or 8.8% compared to the same period last year [4] - Operating loss was reduced by $1.6 million or 31% to $3.6 million, reflecting cost reduction initiatives [4] - Net loss was $3.1 million or $0.29 per diluted share, an improvement from the prior year's net loss of $4.1 million or $0.39 per diluted share [5] Business Line Data and Key Metrics Changes - Hooker Branded achieved breakeven for the quarter, with net sales increasing slightly due to higher unit volume [5] - Domestic Upholstery segment saw a net sales decrease of about $1 million or 3.7%, but gross profit increased by $575,000 due to reduced material and labor costs [21] - Home Meridian's net sales decreased by $7.6 million or about 29%, primarily due to a significant reduction in unit volume and the loss of a major customer [20] Market Data and Key Metrics Changes - The overall decrease in consolidated sales was driven primarily by a double-digit sales decrease at HMI, which is positioned in the mid-price segment [5] - Existing home sales remain well below pre-pandemic levels, impacting furniture demand [11] - Furniture retail sales showed modest improvement, with April sales up 5.6% year over year [26] Company Strategy and Development Direction - The company is executing a phased cost reduction strategy aimed at achieving approximately $25 million in annualized savings by next fiscal year [13] - A new warehouse facility in Vietnam was opened to enhance supply chain efficiency and reduce lead times [6] - The company is focused on product innovation, cost optimization, and operational excellence to capitalize on emerging opportunities [27] Management Comments on Operating Environment and Future Outlook - The home furnishings industry is navigating a challenging environment due to persistent softness in the housing market and higher mortgage rates [11] - Management believes they have successfully mitigated the impact of a 10% tariff through price increases and participation from source factories [12] - The company is optimistic about future growth, with significant increases in orders for Hooker Legacy brands in May [28] Other Important Information - Cash and cash equivalents stood at $18 million, an increase of $11.7 million from year-end, primarily due to accounts receivable collections [22] - The company maintained financial flexibility with about $40 million in available borrowing capacity under its revolving credit facility [23] - The company announced a regular quarterly dividend, reflecting ongoing confidence in its outlook [23] Q&A Session Summary Question: Can you comment on the cadence of shipments from February through April? - Management noted that the cadence changed drastically due to tariffs, particularly affecting the HMI customer [32] Question: What is driving the higher orders at the Hooker legacy brands in May? - The increase in orders is attributed to a significantly broadened merchandising strategy with Collected Living [35] Question: Any comments on HMI's performance in May and early June? - There is still significant uncertainty due to tariffs, which is affecting performance [36] Question: How did Memorial Day sales go for retail partners? - Overall sentiment was relatively positive for most retailers during Memorial Day [38] Question: Can you provide insights on the cost savings initiatives for the rest of the year? - Expected cost savings from Phase one and Phase two initiatives will ramp up, with significant impacts anticipated in Q4 [44] Question: What are the company's capital allocation priorities? - Strengthening the balance sheet is the top priority, followed by maintaining dividends [45] Question: Will the strong May momentum carry over into the rest of the year? - Management believes the first half will be stronger than the second half, based on historical trends [46]

Financial Data and Key Metrics Changes - Consolidated net sales for the first quarter were $85.3 million, a decrease of $8.3 million or 8.8% compared to the same period last year [3] - Operating loss was reduced by $1.6 million or 31% to $3.6 million, reflecting cost reduction initiatives [3] - Net loss was $3.1 million or $0.29 per diluted share, an improvement from the prior year's net loss of $4.1 million or $0.39 per diluted share [4] Business Line Data and Key Metrics Changes - Hooker Branded achieved breakeven for the quarter, with net sales increasing slightly due to higher unit volume [4] - Domestic Upholstery segment saw a net sales decrease of about $1 million or 3.7%, but gross profit increased by $575,000 due to reduced material and labor costs [20] - Home Meridian's net sales decreased by $7.6 million or about 29%, primarily due to a significant reduction in unit volume and loss of a major customer [19] Market Data and Key Metrics Changes - The overall decrease in consolidated sales was driven primarily by a double-digit sales decrease at HMI, which is positioned in the mid-price segment affected by import tariffs [4] - Existing home sales remain well below pre-pandemic levels, impacting furniture demand [10] - Furniture retail sales showed modest improvement, with April sales increasing 5.6% year over year [24] Company Strategy and Development Direction - The company is executing a phased cost reduction strategy aimed at achieving approximately $25 million in annualized savings by next fiscal year [12] - A new warehouse facility in Vietnam was opened to enhance supply chain efficiency and reduce lead times [5] - The company is focused on product innovation, cost optimization, and operational excellence to capitalize on emerging opportunities [25] Management Comments on Operating Environment and Future Outlook - The home furnishings industry is navigating a challenging environment due to persistent softness in the housing market and declining consumer sentiment [10] - Management believes they have successfully mitigated the impact of a 10% tariff through price increases and participation by source factories [11] - The company is optimistic about fiscal May orders, which were the highest since February [26] Other Important Information - Cash and cash equivalents stood at $18 million, an increase from year-end, primarily due to accounts receivable collections [21] - The company maintained financial flexibility with about $40 million in available borrowing capacity under its revolving credit facility [22] - The company announced a regular quarterly dividend, reflecting ongoing confidence in its outlook [22] Q&A Session Summary Question: Can you comment on the cadence of shipments from February through April? - Management noted that the cadence changed drastically due to tariffs, particularly affecting the HMI customer [30] Question: Can you quantify the impact of discounting on gross margins at Hooker Branded? - Management did not have specific quantification available [31] Question: What is driving the higher orders at the Hooker legacy brands in May? - The increase is attributed to a broadened merchandising strategy with Collected Living, which is starting to show positive effects [33] Question: Any comments on HMI's performance in May and early June? - There is still significant uncertainty due to tariffs, which is affecting performance [34] Question: How did Memorial Day sales go for retail partners? - Overall sentiment was relatively positive for most retailers during Memorial Day [36] Question: What is the cadence for cost savings initiatives for the rest of the year? - Management expects a positive impact from Phase one and anticipates significant savings from Phase two in Q4 [42] Question: What are the capital allocation priorities after dividends and debt? - Strengthening the balance sheet is the top priority, with dividends being a high priority as well [43] Question: Will the strong momentum from May carry over into the rest of the year? - Management believes the first half will be stronger than the second half, but is cautious about predicting sustained momentum [44]

[Fiscal 2026 First Quarter Financial & Operational Highlights](index=1&type=section&id=Fiscal%202026%20First%20Quarter%20Financial%20%26%20Operational%20Highlights) [Overall Performance](index=1&type=section&id=Overall%20Performance) The company reported lower sales but narrowed its operating and net losses through effective cost management and improved gross margins Q1 FY2026 Key Financial Results vs. Q1 FY2025 | Metric | Q1 FY2026 | Q1 FY2025 | Change | | :--- | :--- | :--- | :--- | | **Consolidated Net Sales** | $85.3M | $93.6M | -8.8% | | **Gross Margin** | 22.3% | 20.5% | +180 bps | | **Operating Loss** | ($3.6M) | ($5.2M) | +31% | | **Net Loss** | ($3.1M) | ($4.1M) | +25.4% | | **Diluted EPS** | ($0.29) | ($0.39) | +$0.10 | - The company reduced its operating loss by **$1.6 million (31%)** and operating expenses by **$2.2 million** year-over-year, despite a sales decline and incurring $523,000 in restructuring costs[4](index=4&type=chunk) - The overall sales decrease was primarily driven by a double-digit decline at the **Home Meridian (HMI) segment**, while legacy brands remained relatively stable[4](index=4&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted steady progress with market share gains and a successful High Point Market despite a challenging industry environment - The company delivered its **eighth consecutive quarter of market share gains** within its legacy brands (Hooker Branded and Domestic Upholstery)[3](index=3&type=chunk) - Management attributes industry challenges to a soft housing market, higher mortgage rates, and declining consumer sentiment, with existing home sales well below pre-pandemic levels[3](index=3&type=chunk)[5](index=5&type=chunk) - The company's new "Living Your Way" modular upholstery program and new case goods collections were well-received at the Spring High Point Market[3](index=3&type=chunk) [Strategic Initiatives](index=2&type=section&id=Strategic%20Initiatives) [Multiphase Cost Reduction Plan](index=2&type=section&id=Multiphase%20Cost%20Reduction%20Plan) The company is executing a multi-phase cost reduction strategy targeting approximately $25 million in annualized savings by fiscal 2027 - The total cost reduction initiative aims to eliminate approximately **$25 million**, or 25% of fixed costs, by fiscal 2027[6](index=6&type=chunk)[8](index=8&type=chunk) - Phase 1 (FY2025) reduced fixed costs by over **$10 million** through downsizing and workforce reductions[7](index=7&type=chunk)[11](index=11&type=chunk) - Phase 2 (FY2026) involves exiting the Savannah warehouse and opening a new Vietnam warehouse, expected to generate net savings of **$3.4 million in FY2026** and over $14 million annually from FY2027[7](index=7&type=chunk)[11](index=11&type=chunk) - The new Vietnam warehouse, opened in May 2025, is expected to reduce lead times from approximately 6 months to **4-6 weeks**[11](index=11&type=chunk) [Adjusting to Import Tariffs](index=3&type=section&id=Adjusting%20to%20Import%20Tariffs) The company is navigating tariff uncertainty on Vietnamese imports by collaborating with factories and implementing a price increase - The company sources over **80% of its products from Vietnam** and is awaiting a final decision on tariffs, which was paused until July[15](index=15&type=chunk)[16](index=16&type=chunk) - To offset the current 10% tariff, the company has secured participation from its source factories and implemented a **5% price increase**[16](index=16&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) [Hooker Branded](index=2&type=section&id=Hooker%20Branded) The segment achieved stable sales and positive order momentum, though profitability was flat due to increased promotional activity Hooker Branded Q1 Performance | Metric | Q1 FY2026 | Q1 FY2025 | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $37.1M | $36.8M | +0.8% | | **Gross Profit** | $11.1M | $11.5M | -3.4% | | **Operating Income** | $27k | $179k | -84.9% | - Incoming orders grew by **2.4%** year-over-year, but the quarter-end backlog was 21.3% lower than the prior year due to faster shipments from improved inventory positions[18](index=18&type=chunk) [Home Meridian (HMI)](index=3&type=section&id=Home%20Meridian%20(HMI)) The segment saw a sharp sales decline due to a major customer bankruptcy but narrowed its operating loss through cost controls Home Meridian Q1 Performance | Metric | Q1 FY2026 | Q1 FY2025 | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $18.8M | $26.4M | -28.8% | | **Gross Profit** | $2.7M | $3.3M | -17.2% | | **Operating Loss** | ($2.8M) | ($3.4M) | +17.0% | - Approximately **30% of the sales decrease** was attributed to the loss of a major customer due to bankruptcy in the prior year[18](index=18&type=chunk) - The sales decline was partially offset by a **$1.7 million increase** in sales from the hospitality business[18](index=18&type=chunk) [Domestic Upholstery](index=3&type=section&id=Domestic%20Upholstery) The segment significantly narrowed its operating loss despite a modest sales dip, driven by cost reductions and growth in outdoor furnishings Domestic Upholstery Q1 Performance | Metric | Q1 FY2026 | Q1 FY2025 | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $28.9M | $30.0M | -3.7% | | **Gross Profit** | $5.3M | $4.7M | +12.8% | | **Operating Loss** | ($0.6M) | ($1.3M) | +54.5% | - The segment's operating loss was significantly reduced by **$713,000 (55%)** year-over-year[18](index=18&type=chunk) - The sales decrease was partially offset by a **12.7% sales increase** in the outdoor furnishings business, Sunset West, following its bicoastal expansion[18](index=18&type=chunk) [Financial Position and Capital Allocation](index=3&type=section&id=Financial%20Position%20and%20Capital%20Allocation) [Cash, Debt and Inventory](index=3&type=section&id=Cash%2C%20Debt%20and%20Inventory) The company strengthened its liquidity by increasing cash, reducing inventory, and paying down all revolving credit facility borrowings Balance Sheet Highlights (vs. FY2025 Year-End) | Metric | Q1 FY2026 End | FY2025 End | Change | | :--- | :--- | :--- | :--- | | **Cash & Cash Equivalents** | $18.0M | $6.3M | +$11.7M | | **Inventories** | $64.3M | $70.8M | -$6.5M | | **Trade Accounts Receivable** | $39.6M | $58.2M | -$18.6M | - Subsequent to the quarter-end, the company **paid down all outstanding borrowings** on its revolving credit facility[19](index=19&type=chunk) - As of June 11, 2025, the company had approximately **$3 million in cash** and **$63.3 million in available borrowing capacity**[19](index=19&type=chunk) [Capital Allocation](index=4&type=section&id=Capital%20Allocation) The company maintained its shareholder return commitment, extending its 50-year dividend track record while focusing on strategic growth - The company announced its regular quarterly dividend, continuing an over **50-year track record** of uninterrupted dividend payments[20](index=20&type=chunk) - During the first quarter, the company paid **$2.5 million in cash dividends** to shareholders[17](index=17&type=chunk) - Capital allocation priorities include enhancing long-term value through a combination of cost savings initiatives and strategic growth priorities[20](index=20&type=chunk) [Business Outlook](index=4&type=section&id=Business%20Outlook) [Market Environment and Recent Trends](index=4&type=section&id=Market%20Environment%20and%20Recent%20Trends) The market remains challenged by a soft housing market, but the company saw a significant year-over-year uptick in legacy brand orders in May - Existing home sales remain subdued, operating at approximately **75% of typical pre-pandemic levels** for the third consecutive year[21](index=21&type=chunk) - Fiscal May orders for Hooker Legacy brands were the highest since February 2022, showing a nearly **33% increase** compared to the prior year's May[24](index=24&type=chunk) Fiscal May 2025 Year-over-Year Order Growth | Segment | YoY Order Growth | | :--- | :--- | | **Hooker Legacy (Total)** | +33% | | **Hooker Branded** | +40% | | **Domestic Upholstery** | +25% | [Key Growth Initiatives](index=4&type=section&id=Key%20Growth%20Initiatives) Future growth will be driven by a new licensing program, a redesigned website, and customizable product strategies to capture market recovery - Launch of a new **Margaritaville licensing program**[23](index=23&type=chunk) - A redesigned corporate website is set to launch in October to enhance digital experience, lead generation, and e-commerce[24](index=24&type=chunk)[26](index=26&type=chunk) - The new **"Live Your Way" strategy** in Domestic Upholstery will offer customizable, modular, and lifestyle-oriented solutions to meet evolving consumer preferences[24](index=24&type=chunk)[26](index=26&type=chunk) [Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a net loss of $3.1 million on $85.3 million in sales, an improvement from the prior-year period's net loss of $4.1 million Consolidated Statements of Operations (in thousands) | | 13 Weeks Ended May 4, 2025 | 13 Weeks Ended April 28, 2024 | | :--- | :--- | :--- | | **Net sales** | $85,316 | $93,571 | | **Gross profit** | $19,002 | $19,221 | | **Operating (loss)** | $(3,564) | $(5,170) | | **Net (loss)** | $(3,052) | $(4,091) | | **Diluted (Loss) per share** | $(0.29) | $(0.39) | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Total assets stood at $299.7 million, down from $313.9 million at fiscal year-end, reflecting lower receivables and inventory levels Key Balance Sheet Items (in thousands) | As of | May 4, 2025 (Unaudited) | February 2, 2025 | | :--- | :--- | :--- | | **Total current assets** | $128,068 | $141,124 | | **Total assets** | $299,685 | $313,942 | | **Total current liabilities** | $32,508 | $39,974 | | **Total liabilities** | $100,528 | $109,559 | | **Total shareholders' equity** | $199,157 | $204,383 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The company generated $14.7 million in net cash from operations, a significant improvement driven by strong accounts receivable collections Consolidated Cash Flow Summary (in thousands) | | 13 Weeks Ended May 4, 2025 | 13 Weeks Ended April 28, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $14,663 | $1,477 | | **Net cash used in investing activities** | $(967) | $(959) | | **Net cash used in financing activities** | $(1,980) | $(2,802) | | **Net increase / (decrease) in cash** | $11,716 | $(2,284) | | **Cash and cash equivalents - end of quarter** | $18,011 | $40,875 | [Order Backlog](index=11&type=section&id=Order%20Backlog) The consolidated order backlog decreased to $51.2 million from $85.8 million a year ago, primarily due to a decline in the HMI segment Order Backlog by Segment (in thousands) | Reporting Segment | May 4, 2025 | April 28, 2024 | | :--- | :--- | :--- | | Hooker Branded | $13,479 | $17,129 | | Home Meridian | $18,069 | $49,396 | | Domestic Upholstery | $19,401 | $19,236 | | **Consolidated** | **$51,203** | **$85,761** |

Core Insights - Hooker Furnishings Corporation reported its fiscal 2026 first quarter results, highlighting stable legacy sales and ongoing cost-saving initiatives as key drivers for performance [1][2][3] Financial Performance - The company reported consolidated net sales of $85.3 million, a decrease of $8.3 million or 8.8% compared to the prior year [4] - Operating loss was reduced by $1.6 million, or 31%, to $3.6 million, attributed to cost-saving initiatives despite lower net sales [4] - Gross margin improved by 180 basis points, maintaining overall gross profit levels despite lower net sales [4] - The net loss for the quarter was $3.1 million, or ($0.29) per diluted share, an improvement from a $4.1 million loss, or ($0.39) per diluted share in the prior year [4][33] Cost Reduction Initiatives - The company is executing a multi-phase cost reduction strategy aimed at achieving approximately $25 million in annualized savings by fiscal year 2027 [6][8] - Initial cost reductions have already resulted in $2.2 million in savings, with expectations of $14 million in cost savings net of offsets and special charges for fiscal 2026 [5][8] - The strategic shift to a new warehouse in Vietnam is expected to enhance supply chain efficiency and reduce lead times from about 6 months to 4–6 weeks [11][12] Segment Performance - Hooker Branded segment net sales increased slightly by 0.8%, while Domestic Upholstery segment saw a decrease of 3.7% [4][12] - Home Meridian segment net sales decreased by $7.6 million, or 28.8%, primarily due to the loss of a major customer and reduced sales from import tariff-related hesitancy [19] - Despite sales decreases, Domestic Upholstery significantly narrowed operating losses by 55% [19] Market Conditions - The home furnishings industry is facing challenges due to persistent softness in the housing market, higher mortgage rates, and declining consumer sentiment [3][21] - Existing home sales remain well below pre-pandemic levels, impacting furniture demand [3][21] - Consumer confidence has dropped to near historic lows, leading many households to pull back on discretionary spending [3][21] Strategic Outlook - The company is focused on product innovation, cost optimization, and operational excellence to navigate ongoing economic challenges [22] - Key initiatives include the launch of the Margaritaville licensing program and the Collected Living merchandising approach, which received positive feedback at the April High Point Market [23][24] - The company anticipates that improvements in macroeconomic conditions will enhance its position for growth and shareholder value [5][22]

Group 1 - The decision to downgrade Hooker Furnishings Corporation from a Hold to a Sell was made in March of this year, indicating a negative outlook for the company [1] - The investment service focuses on cash flow and companies that generate it, highlighting the importance of value and growth prospects in the oil and natural gas sector [1] Group 2 - Subscribers have access to a stock model account with over 50 stocks, providing in-depth cash flow analyses of exploration and production firms [2] - The service includes live chat discussions about the oil and gas sector, fostering community engagement among subscribers [2] - A two-week free trial is offered to new subscribers, encouraging them to explore the investment service [3]

Core Viewpoint - The market anticipates Hooker Furniture (HOFT) to report a year-over-year increase in earnings despite lower revenues for the quarter ending April 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Hooker Furniture is expected to report a quarterly loss of $0.16 per share, reflecting a year-over-year change of +59%, while revenues are projected to be $88.87 million, down 5% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 140% lower in the last 30 days, indicating a significant reassessment by analysts [4]. Earnings Surprise Prediction - The Most Accurate Estimate for Hooker Furniture is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +3.23%. However, the stock has a Zacks Rank of 4, complicating predictions of an earnings beat [12]. Historical Performance - In the last reported quarter, Hooker Furniture was expected to post earnings of $0.16 per share but only achieved $0.01, resulting in a surprise of -93.75%. The company has not beaten consensus EPS estimates in the last four quarters [13][14]. Conclusion - While Hooker Furniture does not appear to be a strong candidate for an earnings beat, investors should consider other factors when making decisions regarding the stock ahead of its earnings release [17].

Company Overview - Hooker Furnishings Corporation is in its 101st year of business, specializing in the design, marketing, and import of various furniture types including casegoods, leather, and fabric-upholstered furniture, as well as lighting and home décor for residential, hospitality, and contract markets [4] - The company manufactures premium residential custom leather and fabric-upholstered furniture domestically, along with outdoor furniture [4] - Major product categories include home entertainment, home office, accent, dining, and bedroom furniture, primarily sold under the Hooker Furniture brand [4] Product Lines - Hooker's residential upholstered seating includes brands such as Bradington-Young, HF Custom, Hooker Upholstery, and Shenandoah Furniture, targeting the upper-medium price range [4] - The H Contract product line supplies upholstered seating and casegoods to upscale senior living facilities [4] - Home Meridian division offers moderate price points and includes brands like Pulaski Furniture and Samuel Lawrence Furniture, focusing on value-conscious offerings [4] Financial Information - Hooker Furnishings Corporation will present its fiscal 2026 first quarter financial results on June 12, 2025, at 9:00 AM Eastern Time [1] - The first quarter of fiscal 2026 began on February 3, 2025, and ended on May 4, 2025 [3] Communication and Access - A live webcast of the financial results call will be available on the company's Investor Relations page, with an option for phone access through a registration link [2]

Customer Concentration - The company’s top five customers accounted for approximately 24% of consolidated sales in fiscal 2025, with no single customer exceeding 7%[27] - Less than 2% of the company’s sales in fiscal 2025 were to international customers, defined as sales outside of the United States and Canada[27] Supply Chain and Sourcing - The company’s five largest domestic upholstery suppliers accounted for 31% of raw materials purchases for domestic upholstered furniture manufacturing operations in fiscal 2025[26] - The company has observed price increases in imported raw materials, including fabrics, steel, and hides, following the implementation of initial reciprocal tariffs in April 2025[26] - The company’s reliance on offshore sourcing exposes it to risks related to fluctuations in the prices of purchased finished goods and customs issues[13] - Payment for imported products is generally due 10 to 14 days after quality audit inspections are complete[32] Inventory and Backlog - As of February 2, 2025, the consolidated order backlog was $71.824 million, a 27% decrease from the prior year-end, primarily due to a $15 million reduction in the Home Meridian backlog and a $3.4 million reduction in the Hooker Branded backlog[37] - The Home Meridian segment's backlog is considered a helpful indicator of sales for the upcoming 90-day period, while the Hooker Branded and Domestic Upholstery segments' backlogs are viewed as indicators for the upcoming 30-day period[35] - The Domestic Upholstery backlog did not include Sunset West, which was acquired at the beginning of fiscal 2023 and had approximately $1.6 million in backlog at fiscal 2020 year-end[38] - The company recorded a significant backlog increase during the COVID-19 crisis, reaching historical levels at the end of fiscal 2021 and 2022 due to supply chain challenges[36] Workforce and Employee Well-being - The company had 1,034 full-time employees as of February 2, 2025, with 895 located in the United States and 139 in Asia[42] - The company is committed to providing competitive compensation and comprehensive health benefits to ensure the well-being of its employees[45] Sustainability Initiatives - The company has implemented several sustainability initiatives, including purchasing renewable energy for multiple facilities and achieving 100% renewable energy operation for Sunset West and HF Custom[44] - The company has established partnerships with organizations like the Arbor Day Foundation and the Sustainable Furnishings Council to promote environmental responsibility and sustainability[44] Compliance and Ethics - The company maintains a Code of Business Conduct and Ethics, requiring all employees to comply with anti-corruption and anti-bribery training annually[46] - The company is subject to various federal, state, and local laws and regulations, but compliance has not materially affected its financial position in the past[48] Operational Changes - The company reduced the physical footprint of its Georgia warehouse by 400,000 square feet during fiscal 2024 and announced a planned exit from this warehouse in March 2025[29] - The company’s exit from the Accentrics Home business unit was driven by the need to reduce inventory for e-commerce shipping requirements[29] - The company does not use derivative financial instruments to manage exchange rate risks but may consider doing so in the future[25] - The company’s domestic upholstery segment products are made to order and carry significant amounts of raw materials for production[30]