Hooker Furniture(HOFT) - 2025 Q3 - Quarterly Results

Financial Performance - Consolidated net sales for Q3 fiscal 2025 were $104.4 million, a decrease of $12.5 million or 10.7% year-over-year, primarily due to macro-economic challenges and customer bankruptcy[4]. - The company reported an operating loss of $7.3 million and a consolidated net loss of $4.1 million, or ($0.39) per diluted share for the third quarter[3]. - For the nine-month period, consolidated net sales were $293.0 million, a decrease of $43.4 million or 12.9% compared to the same period last year[7]. - Net sales for the thirteen weeks ended October 27, 2024, were $104.352 million, a decrease from $116.831 million for the same period in 2023, representing a decline of approximately 10.6%[32]. - Gross profit for the thirteen weeks ended October 27, 2024, was $24.025 million, down from $33.710 million in the prior year, indicating a decrease of about 28.9%[32]. - The company reported a net loss of $4.131 million for the thirteen weeks ended October 27, 2024, compared to a net income of $7.038 million for the same period in 2023[32]. - Basic loss per share for the thirteen weeks ended October 27, 2024, was $(0.39), compared to earnings per share of $0.66 in the same period last year[32]. - The operating loss for the consolidated segment was $(7,260) million, compared to an operating income of $8,770 million in the same quarter last year, indicating a significant decline[39]. - The Hooker Branded segment reported net sales of $34,940 million, down 10.4% from $39,122 million in the prior year[39]. - Home Meridian segment net sales decreased to $38,553 million, down from $43,692 million, reflecting a decline of 11.6%[39]. Cash and Liquidity - Cash and cash equivalents were $20.4 million at the end of Q3, a decrease of $22.7 million from year-end in January[20]. - Cash and cash equivalents decreased to $20.410 million as of October 27, 2024, from $43.159 million as of October 29, 2023, reflecting a decrease of approximately 52.7%[36]. - Cash dividends paid increased to $7,378 million from $7,228 million year-over-year[38]. - Net cash used in operating activities was $(12,334) million for the quarter ending October 27, 2024, compared to $48,770 million for the same period last year[38]. Inventory and Backlog - Inventory levels increased by $4.7 million from year-end, driven by a $6.2 million increase in Hooker Branded inventories[20]. - The order backlog for Hooker Branded as of October 27, 2024, was $13,049 million, down from $18,646 million a year earlier[40]. - The company is aggressively building inventory to support new major casegoods collections and best-selling SKUs, anticipating increased demand[22]. Cost Management and Restructuring - The company plans to realize over $10 million in annualized cost savings in fiscal 2026 as a result of ongoing restructuring efforts[5]. - The company plans to complete the restructuring of the HMI segment by fiscal 2025, aiming to return it to consistent profitability[31]. Market Conditions and Risks - The company anticipates a 10% increase in home sales for 2025, supported by recent interest rate cuts and improving consumer sentiment[25][26]. - The company is facing risks related to inflation and high interest rates, which may impact sales and operating costs[31]. Impairment and Provisions - Trade name impairment charges amounted to $1.953 million for the thirteen weeks ended October 27, 2024, with no charges reported in the same period last year[32]. - The company incurred a trade name impairment of $1,953 million during the quarter[38]. - The provision for doubtful accounts and sales allowances was $272 million, compared to $(270) million in the same quarter last year[38]. Assets and Liabilities - Total current liabilities increased to $68.319 million as of October 27, 2024, compared to $41.409 million as of October 29, 2023[36]. - The total assets of the company decreased to $326.864 million as of October 27, 2024, down from $343.586 million as of October 29, 2023[36].