Stonegate Updates Coverage on Hooker Furniture Corporation (HOFT) Q3 FY26

Core Insights - Hooker Furniture Corporation (NASDAQ: HOFT) reported disappointing financial results with revenue of $70.7 million, operating income of -$16.3 million, and adjusted EPS of -$1.99, falling short of consensus estimates [1] - Revenue declined by 32.2% year-over-year, primarily due to the sale of the majority of its HMI business segment, while Hooker Branded net sales increased by 4.4% year-over-year and Domestic Upholstery grew by 3.0% [1] - Consolidated gross margins improved to 25.6% following the sale of the lower margin HMI business, although overall profitability was impacted by one-time trade name impairment charges related to the HMI transaction [1] Financial Performance - Revenue: $70.7 million, compared to estimates of $85.2 million and $85.5 million [1] - Operating Income: -$16.3 million, against estimates of -$2.2 million [1] - Adjusted EPS: -$1.99, compared to estimates of -$0.15 and -$0.14 [1] Business Segment Performance - HMI Business Segment: Majority sold, contributing to revenue decline [1] - Hooker Branded Net Sales: Increased by 4.4% year-over-year [1] - Domestic Upholstery: Increased by 3.0% year-over-year [1] Strategic Focus - Management is focused on navigating macroeconomic challenges such as housing market weakness, high mortgage rates, and subdued consumer demand [1] - The company aims to position itself for a return to profitability [1]