Operating Results Improvements Continue at Hooker Furnishings in Q1

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]