Hooker Furnishings Reports Improved Sales in Fourth Quarter, Additional Planned Cost Savings

Core Insights - Hooker Furnishings Corporation reported a consolidated net loss of $2.3 million for the fourth quarter of fiscal 2025, compared to a net income of $593,000 in the prior year quarter, reflecting ongoing challenges in the home furnishings market [5][6][20] - For the full fiscal year 2025, the company experienced a consolidated net sales decrease of $397.5 million, down 8.3% from the previous year, driven by weak demand and macroeconomic uncertainties [5][6][20] - The company announced additional planned cost savings of $8 to $10 million, which, combined with previously announced savings, are expected to total between $18 million to $20 million once fully implemented by fiscal 2027 [5][6][20] Fiscal 2025 Fourth Quarter Results - Net sales for the fourth quarter were $104.5 million, an increase of 8% compared to $96.8 million in the prior year quarter, with the additional week contributing approximately $7.7 million [5][6] - Consolidated operating loss was $2.7 million, or (2.5%) of net sales, compared to operating income of $340,000, or 0.4% of net sales, in the prior year quarter [5][6] - Charges recorded in the fourth quarter totaled $3.1 million, including $1.3 million in inventory write-downs and $718,000 in bad debt expense due to a large customer bankruptcy [5][6] Fiscal 2025 Full-Year Results - Consolidated net sales for the full year were $397.5 million, reflecting a decrease of $35.8 million, or 8.3%, compared to the previous fiscal year [5][6] - Consolidated operating loss for the year was $18.1 million, or (4.6%) of net sales, compared to operating income of $12.4 million, or 2.9% of net sales, in the prior year [5][6] - Significant charges for the year totaled $10.8 million, including $4.9 million in restructuring costs and $3.1 million in bad debt expense [5][6] Segment Performance - Hooker Branded segment saw fourth quarter net sales rise by $3.8 million, or 10%, driven by a 14% increase in unit volume, although full-year sales decreased by 6.5% [7][8] - Home Meridian segment reported a fourth quarter net sales increase of $6.3 million, or 21.7%, with gross margin reaching 22.9%, the highest since 2016 [8] - Domestic Upholstery segment experienced a fourth quarter net sales decrease of $2.0 million, or 7%, with a full-year decrease of 9.9% [9] Cash, Debt, and Inventory - Cash and cash equivalents decreased to $6.3 million, down $36.9 million from the previous year-end, largely due to increased accounts receivable and planned inventory increases [11][12] - The company maintained financial flexibility with $41 million in available borrowing capacity under its new loan agreement as of the end of fiscal 2025 [11][12] - Inventory levels increased to support new product collections and mitigate supply disruptions [12] Management Commentary - The CEO highlighted that despite macroeconomic headwinds, the company gained market share in its Legacy divisions throughout fiscal 2025 [6] - The company is focused on cost reduction initiatives to improve operating income and cash flow, including the planned exit of the Savannah warehouse [6] - The management remains optimistic about future market share growth and revenue maximization through merchandising efforts and improved product availability [6]