Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2026 were $82.1 million, down $13 million, or 13.6% year-over-year, primarily due to declines at Home Meridian [4][5] - Consolidated operating loss was $4.4 million compared to $3.1 million in the prior year quarter, reflecting lower sales volume and unfavorable customer mix [4] - Consolidated net loss was $3.3 million, or $0.31 per share, with a six-month net loss of $6.3 million, or $0.60 per diluted share [4][5] Business Line Data and Key Metrics Changes - Hooker branded net sales increased by 1.3% year-over-year, reaching breakeven compared to a $329,000 loss in the same quarter last year [3][15] - Home Meridian net sales decreased by 44.5%, heavily impacted by tariff-related buying hesitancy and macroeconomic pressures [3][16] - Domestic upholstery segment's net sales were flat, with a slight decline of 1.7% for the first six months, but operating losses were reduced by 68% in Q2 [3][18] Market Data and Key Metrics Changes - The decline in Home Meridian was attributed to a loss of a major customer due to bankruptcy, accounting for about 25% of the sales decrease [4][16] - The hospitality business within Home Meridian saw a decline due to project timing, while traditional furniture channels faced macroeconomic pressures [3][16] Company Strategy and Development Direction - The company is focused on cost reduction efforts, aiming to eliminate approximately $25 million, or 25% of fixed costs, with significant savings expected by the end of Q3 2026 [13][14] - A new Margaritaville license collection is set to launch in October, which is anticipated to enhance growth opportunities [10][22] - The company is adapting to tariff impacts by evaluating pricing on a SKU-level basis and implementing mitigation strategies [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted that the home furnishings industry is facing challenges from low existing home sales, elevated mortgage rates, and persistent inflation [21] - There is optimism regarding the upcoming cost structure changes and the potential for growth when market demand returns [8][22] - The company is confident that its restructuring efforts will not hinder growth or customer service capabilities [10][22] Other Important Information - The company reported a significant improvement in operational results at Hooker branded and domestic upholstery, despite ongoing challenges [9] - Incoming orders for Hooker branded and domestic upholstery increased by nearly 11% and 1.6%, respectively, indicating some positive momentum [21] Q&A Session Summary Question: What is driving the increased orders at Hooker branded and domestic upholstery? - Management indicated subtle macro improvements at the retail level, with positive feedback from partners regarding Labor Day sales [27] Question: How do you plan to return the Home Meridian segment to profitability? - Management emphasized the importance of aligning cost savings with revenue growth, particularly focusing on customer relationships [29] Question: What is the breakdown of restructuring costs for the quarter? - Approximately two-thirds of the restructuring costs were in cost of goods sold, and one-third in selling and administrative expenses [31]

Financial Performance - Hooker Furniture reported a quarterly loss of $0.31 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.12, representing an earnings surprise of -158.33% [1] - The company posted revenues of $82.15 million for the quarter ended July 2025, missing the Zacks Consensus Estimate by 9.89%, and down from $95.08 million a year ago [2] - Over the last four quarters, Hooker Furniture has not surpassed consensus EPS estimates and has topped revenue estimates only twice [2] Stock Performance - Hooker Furniture shares have declined approximately 21.6% since the beginning of the year, contrasting with the S&P 500's gain of 11.1% [3] - The current Zacks Rank for Hooker Furniture is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.17 on revenues of $106.45 million, and for the current fiscal year, it is $0.13 on revenues of $394.6 million [7] - The outlook for the furniture industry is currently weak, with the Zacks Industry Rank placing it in the bottom 26% of over 250 Zacks industries, which may impact the stock's performance [8]

[Executive Summary & Key Performance Drivers](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Performance%20Drivers) The company is driving towards profitability through cost-reduction and growth initiatives, with key performance indicators showing progress in Q2 and 1H FY26 [Executive Commentary](index=1&type=section&id=Executive%20Commentary) CEO Jeremy Hoff outlines strategic steps to achieve profitability through cost reduction and growth, with Hooker Branded reaching breakeven and Domestic Upholstery significantly reducing losses - Company is taking **decisive steps** to return to **profitability** through **cost-reduction** and **growth initiatives**[2](index=2&type=chunk) - Hooker Branded achieved **breakeven** in Q2 FY26 despite weak demand and restructuring charges[3](index=3&type=chunk) - Domestic Upholstery **reduced operating loss by nearly 70%** in Q2 FY26, including restructuring costs[3](index=3&type=chunk) - HMI's fixed cost structure is expected to be **aligned for a sustainable business** by the end of Q3 FY26, with performance **significantly enhanced** by year-end[3](index=3&type=chunk) - New expense structure, **reducing fixed costs by approximately 25%**, is largely expected to be in place by the end of Q3 FY26[3](index=3&type=chunk)[10](index=10&type=chunk) [Key Performance Drivers: Q2 & 1H FY26](index=1&type=section&id=Key%20Performance%20Drivers%3A%20Q2%20%26%201H%20FY26) The company is executing a multi-phase cost reduction strategy targeting $25 million in annualized savings by FY27, with Q2 FY26 showing mixed results across segments and significant debt reduction - Multi-phase cost reduction strategy aims for approximately **$25 million in annualized savings** by fiscal year 2027[5](index=5&type=chunk) - Achieved **$3.7 million in expense reductions** in 1H FY26, despite **$1.7 million in restructuring charges**[5](index=5&type=chunk)[6](index=6&type=chunk) Key Performance Metrics | Metric | Q2 FY26 | Change YoY | | :-------------------------- | :------ | :--------- | | Hooker Branded Sales | +$465K | +1.3% | | Hooker Branded Operating Results | Breakeven | vs. $329K loss PY | | Domestic Upholstery Operating Loss | Reduced by nearly $900K | | | Consolidated Net Sales | $82.1M | -13.6% | | Consolidated Operating Loss | $4.4M | vs. $3.1M PY | | Consolidated Net Loss | $3.3M | | | Debt Repayment YTD | $16.5M | | | Borrowing Capacity | $57.7M | | - HMI net sales **down 44.5% YoY**, driven by customer bankruptcy impact and tariff mitigation[6](index=6&type=chunk) - Q2 orders for Hooker Branded **increased by 11%**, and Domestic Upholstery **by 2%**, with backlog **up 7% YoY**[6](index=6&type=chunk) [Cost Reduction and Operational Strategy](index=1&type=section&id=Cost%20Reduction%20and%20Operational%20Strategy) The company is executing a multi-phase cost reduction plan targeting $25 million in annualized savings by FY27, while also pursuing strategic growth initiatives [Multi-Phase Cost Reduction Plan Details](index=1&type=section&id=Multi-Phase%20Cost%20Reduction%20Plan%20Details) The company is implementing a multi-phase cost reduction strategy to achieve approximately $25 million in annualized savings by fiscal year 2027, focusing on warehousing, distribution, and administrative expenses - Target of approximately **$25 million in annualized savings** by FY27, representing nearly **25% of fixed costs**[5](index=5&type=chunk)[8](index=8&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk) - Savings breakdown includes **$11 million** in warehousing/distribution and **$14 million** in selling/administrative expenses[8](index=8&type=chunk) Cost Reduction Plan Summary | Fiscal Year | Initiative | Identified Reductions | Achieved Savings | Restructuring Charges | | :---------- | :-------------------------------- | :-------------------- | :--------------- | :-------------------- | | FY25 | Phase 1 | $10 million | $3 million | N/A | | FY26 | Phase 2 | $15 million | $3.7 million (1H) | $1.7 million (1H) | | FY27 | Annualized Target | N/A | $25 million | N/A | - Incurred **$4.9 million in restructuring charges** in FY25, including **$3.6 million in severance**[11](index=11&type=chunk) - Incurred **$2.5 million in restructuring costs** in 1H FY26, including **$1.7 million in severance** and warehouse consolidation, and **$0.8 million** from inventory liquidation at the Georgia warehouse[11](index=11&type=chunk) - Expecting approximately **$2 million in additional charges** in 2H FY26, primarily related to fixed asset write-offs and severance for the Savannah warehouse exit[11](index=11&type=chunk) - Savannah warehouse closure and lease termination effective **October 31, 2025**[11](index=11&type=chunk) - Vietnam warehouse opened in **May 2025**, reached **two-thirds capacity**, reducing direct container lead times from six months to four to six weeks[11](index=11&type=chunk)[12](index=12&type=chunk) [Phase 1: Initial Cost Reductions (Fiscal 2025)](index=2&type=section&id=Phase%201%3A%20Initial%20Cost%20Reductions%20(Fiscal%202025)) Phase 1 of the cost reduction plan identified $10 million in expense reductions for fiscal 2025, achieving $3 million in savings through facility downsizing and workforce reductions - Identified **$10 million in expense reductions** in fiscal 2025, achieving **$3 million in savings**[5](index=5&type=chunk) - Reduced fixed costs by **over $10 million** through facility downsizing, workforce reductions, and other fixed cost reductions[11](index=11&type=chunk) - Incurred **$4.9 million in restructuring charges** in FY25, including **$3.6 million in severance**[11](index=11&type=chunk) [Phase 2: Logistics & Operations Consolidation (Fiscal 2026)](index=2&type=section&id=Phase%202%3A%20Logistics%20%26%20Operations%20Consolidation%20(Fiscal%202026)) Phase 2 targets an additional $15 million in expense reductions for fiscal 2026, with $3.7 million achieved in 1H FY26, including the closure of the Savannah warehouse and opening of a Vietnam warehouse - Identified an additional **$15 million in expense reductions** for Fiscal 2026[5](index=5&type=chunk) - Achieved **$3.7 million in expense reductions** in the first half of fiscal 2026, despite **$1.7 million in restructuring charges**[5](index=5&type=chunk) - Savannah Warehouse: Entered into an agreement for full closure and lease termination effective **October 31, 2025**[11](index=11&type=chunk) - Vietnam Warehouse: Opened in **May 2025**, reached approximately **two-thirds capacity**, reducing direct container lead times from six months to four to six weeks[11](index=11&type=chunk) - Incurred **$2.5 million in restructuring costs** during 1H FY26, including **$1.7 million in severance** and warehouse consolidation costs and **$0.8 million** from inventory liquidation[11](index=11&type=chunk) [Strategic Growth Initiatives](index=2&type=section&id=Strategic%20Growth%20Initiatives) The company is investing in strategic growth opportunities, including the Collected Living platform, leveraging the Vietnam warehouse, and launching the Margaritaville licensed collection - Strategic growth priorities include advancing **Collected Living** merchandising platform, leveraging **Vietnam warehouse**, and launching **Margaritaville licensed collection**[7](index=7&type=chunk)[12](index=12&type=chunk) - Margaritaville launch is scheduled for the **October High Point market**, positioning the company for the **second half of fiscal 2027**[12](index=12&type=chunk) - Vietnam warehouse is already **shortening container lead times** and creating new mixability opportunities, **reducing overall inventory requirements**[12](index=12&type=chunk) [Segment Performance Analysis](index=3&type=section&id=Segment%20Performance%20Analysis) This section analyzes the Q2 and 1H FY26 performance of Hooker Branded, Home Meridian, and Domestic Upholstery segments, highlighting sales, gross profit, and operating results [Hooker Branded Segment](index=3&type=section&id=Hooker%20Branded%20Segment) The Hooker Branded segment achieved modest sales growth and breakeven operating results in Q2 and 1H FY26, with incoming orders and backlog showing positive trends Hooker Branded Segment Performance | Metric | Q2 FY26 | 1H FY26 | Change YoY (Q2) | Change YoY (1H) | | :-------------------- | :------ | :------ | :-------------- | :-------------- | | Net Sales | +$465K | +$766K | +1.3% | +1.1% | | Gross Profit | -$167K | -$560K | | | | Gross Margin | 29.1% | 29.5% | -80 bps | -100 bps | | Operating Results | Breakeven | Breakeven | vs. $329K loss PY | vs. $150K loss PY | | Restructuring Costs | $655K | $782K | | | | Incoming Orders (Q2) | +10.6% | | | | | Quarter-end Backlog | $15,701K | | Consistent YoY, +20% from FY-end | | [Home Meridian (HMI) Segment](index=3&type=section&id=Home%20Meridian%20(HMI)%20Segment) The Home Meridian segment experienced significant sales decline and operating losses in Q2 and 1H FY26, primarily due to reduced hospitality business, macroeconomic pressures, and a major customer bankruptcy Home Meridian Segment Performance | Metric | Q2 FY26 | 1H FY26 | Change YoY (Q2) | Change YoY (1H) | | :-------------------- | :------ | :------ | :-------------- | :-------------- | | Net Sales | -$13.6M | -$21.2M | -44.5% | -37.2% | | Gross Profit | -$4.9M | -$5.6M | | | | Gross Margin | 6.2% | 10.6% | -1,330 bps | -590 bps | | Operating Loss | $3.9M | $6.8M | vs. $0.9M loss PY | vs. $4.2M loss PY | | Restructuring Costs | $1.2M | $1.4M | | | | Quarter-end Backlog | $16,138K | | Down from $43,918K PY | | - Sales decline driven by project-based hospitality (**40%**), traditional channels (**35%** due to macro/tariffs), and major customer bankruptcy (**25%**)[16](index=16&type=chunk) - Gross margin decline due to **unfavorable customer/product mix**, **higher warehousing expenses**, **severance**, and **inventory liquidation**[16](index=16&type=chunk) [Domestic Upholstery Segment](index=3&type=section&id=Domestic%20Upholstery%20Segment) The Domestic Upholstery segment maintained flat net sales in Q2 FY26, significantly reducing operating losses and expanding gross margins, with incoming orders and backlog showing growth Domestic Upholstery Segment Performance | Metric | Q2 FY26 | 1H FY26 | Change YoY (Q2) | Change YoY (1H) | | :-------------------- | :------ | :------ | :-------------- | :-------------- | | Net Sales | Flat | -$1.0M | | -1.7% | | Gross Profit | +$659K | +$1.2M | | | | Gross Margin | 18.5% | 18.4% | +220 bps | +240 bps | | Operating Loss | -$408K | -$1,004K | Reduced by $877K (68%) | Reduced by $1.6M (61%) | | Restructuring Costs | $152K | $265K | | | | Incoming Orders (Q2) | +1.6% | | | | | Quarter-end Backlog | $19,313K | | +7% YoY | | - Indoor residential divisions posted **sales increases**, signaling **early recovery**[16](index=16&type=chunk) - Sunset West sales **fell 9.7%** due to supply chain disruptions, which stabilized post-quarter[16](index=16&type=chunk) [Financial Position and Capital Management](index=4&type=section&id=Financial%20Position%20and%20Capital%20Management) This section details the company's cash, debt, and inventory levels, along with its capital allocation strategies focused on debt reduction, liquidity, and shareholder returns [Cash, Debt and Inventory](index=4&type=section&id=Cash%20%2C%20Debt%20and%20Inventory) Cash and cash equivalents decreased to $821,000 at quarter-end, primarily due to $16.5 million in debt repayment and dividends, while inventory levels decreased and borrowing capacity remained strong Cash, Debt and Inventory Levels | Metric | As of August 3, 2025 (Q2 FY26) | Change from Feb 2, 2025 (FY-end) | | :-------------------------- | :------------------------------ | :------------------------------ | | Cash and Cash Equivalents | $821,000 | -$5.5 million | | Inventory Levels | $58.5 million | -$12.3 million | | Debt Repaid YTD | $16.5 million | | | Available Borrowing Capacity | $57.7 million (Q2 end) | | | Available Borrowing Capacity (as of Sept 10, 2025) | $67.9 million | | [Capital Allocation](index=4&type=section&id=Capital%20Allocation) CFO Earl Armstrong highlights the company's focus on debt reduction, liquidity strengthening, and shareholder returns through dividends, supported by cost-saving measures and strategic growth priorities - **Reduced debt**, **strengthened liquidity**, and continued **returning capital to shareholders through dividends** over the past year[20](index=20&type=chunk) - Cost-saving measures are **enhancing near-term liquidity** and creating a **foundation for strategic growth**[20](index=20&type=chunk) - Focus remains on capital allocation strategies that drive **long-term value creation**, balancing **cost initiatives with key growth priorities**[20](index=20&type=chunk) [Tariff Impacts and Mitigation Strategies](index=4&type=section&id=Tariff%20Impacts%20and%20Mitigation%20Strategies) The company is implementing various mitigation strategies across segments to address the new 20% US tariff on imports from Vietnam and assessing potential impacts of possible lumber tariffs - US Government announced a **20% tariff** on imports from Vietnam, effective **August 1, 2025**[17](index=17&type=chunk) - Domestic Upholstery mitigates impact through **new fabric sourcing** for component parts[18](index=18&type=chunk) - Hooker Branded is **remerchandising lines** and **evaluating pricing on a SKU-by-SKU basis** to manage tariff impact[18](index=18&type=chunk) - HMI has implemented **near-term mitigation efforts** and is pursuing additional measures for existing collections[18](index=18&type=chunk) - Company is assessing potential impacts of **possible lumber tariffs**[18](index=18&type=chunk) [Business Outlook](index=4&type=section&id=Business%20Outlook) Despite industry headwinds from low home sales and inflation, the company observes encouraging order momentum and focuses on scaling its cost structure, launching new collections, and pursuing growth in key channels - July orders for Hooker Branded and Domestic Upholstery were **up 24% YoY**[21](index=21&type=chunk) - Q2 orders for Hooker Branded were **up nearly 11%**, and Domestic Upholstery **up 1.6%**[21](index=21&type=chunk) - Industry headwinds include **low existing home sales**, **elevated mortgage rates**, and **persistent inflation**[21](index=21&type=chunk) - Company focus areas: **scaling cost structure**, **Margaritaville collection debut**, and **growth in hospitality, contract, and outdoor channels**, supported by Vietnam warehouse[21](index=21&type=chunk) [Company Information & Disclosures](index=4&type=section&id=Company%20Information%20%26%20Disclosures) This section provides an overview of Hooker Furnishings, its business, and important disclosures regarding investor communications and forward-looking statements [About Hooker Furnishings](index=5&type=section&id=About%20Hooker%20Furnishings) Hooker Furnishings Corporation is a global designer, marketer, and importer of diverse furniture and home décor, also manufacturing premium custom furniture domestically across various brands - Hooker Furnishings is a **global leader** in home furnishings, designing, marketing, and importing various furniture types and home décor[1](index=1&type=chunk)[24](index=24&type=chunk) - Company also **domestically manufactures premium residential custom leather, fabric-upholstered, and outdoor furniture**[24](index=24&type=chunk) - Operates **multiple brands** including Hooker Furniture, Bradington-Young, HF Custom, Hooker Upholstery, Shenandoah Furniture, H Contract, Home Meridian (Pulaski Furniture, Samuel Lawrence Furniture, Prime Resources International, Samuel Lawrence Hospitality), and Sunset West[24](index=24&type=chunk) [Additional Information](index=5&type=section&id=Additional%20Information) Hooker Furnishings uses its Investor Relations website as a primary channel for disclosing material information to investors, in compliance with Regulation FD - **Investor Relations website** is used for disclosing material information to investors and complying with **Regulation FD**[25](index=25&type=chunk) - Investors should monitor the **IR website, press releases, SEC filings, conference calls, webcasts, and social media**[25](index=25&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section highlights that forward-looking statements are subject to various risks and uncertainties, including tariffs, economic conditions, and operational challenges, with no obligation for updates - Forward-looking statements are subject to **risks and uncertainties** that could cause actual results to **differ materially**[26](index=26&type=chunk) - Key risks include **tariffs** (Vietnam, potential lumber), **general economic conditions** (housing, interest rates, inflation), **cyclical nature** of the furniture industry, and outcomes of **cost reduction and HMI restructuring plans**[28](index=28&type=chunk) - Other risks include **Savannah warehouse exit**, **Vietnam warehouse operations**, **customer concentration**, **offshore sourcing reliance**, **IT security**, and **product defects**[28](index=28&type=chunk) - The company undertakes **no obligation to update** forward-looking statements[29](index=29&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated statements of operations, comprehensive income, balance sheets, and cash flows for Q2 and 1H FY26, highlighting key financial changes [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 FY26, net sales decreased to $82.1 million, resulting in a net loss of $3.3 million, while 1H FY26 also saw reduced net sales and a net loss of $6.3 million Consolidated Statements of Operations | Metric | Q2 FY26 (13 Weeks, in thousands) | Q2 FY25 (13 Weeks, in thousands) | 1H FY26 (26 Weeks, in thousands) | 1H FY25 (26 Weeks, in thousands) | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net Sales | $82,149 | $95,081 | $167,465 | $188,652 | | Gross Profit | $16,837 | $20,922 | $35,838 | $40,294 | | Operating (Loss) / Income | $(4,401) | $(3,149) | $(7,965) | $(8,169) | | Net (Loss) / Income | $(3,277) | $(1,951) | $(6,329) | $(6,042) | | Basic EPS (in dollars) | $(0.31) | $(0.19) | $(0.60) | $(0.57) | [Consolidated Statements of Comprehensive (Loss) / Income](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20%2F%20Income) The consolidated comprehensive loss for Q2 FY26 was $3.3 million and $6.4 million for 1H FY26, including actuarial adjustments and their tax effects Consolidated Statements of Comprehensive (Loss) / Income | Metric | Q2 FY26 (13 Weeks, in thousands) | Q2 FY25 (13 Weeks, in thousands) | 1H FY26 (26 Weeks, in thousands) | 1H FY25 (26 Weeks, in thousands) | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net (Loss) / Income | $(3,277) | $(1,951) | $(6,329) | $(6,042) | | Total Comprehensive (Loss) / Income | $(3,311) | $(1,996) | $(6,397) | $(6,132) | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of August 3, 2025, total assets decreased to $278.0 million, driven by reductions in current assets, while total liabilities and shareholders' equity also declined Consolidated Balance Sheets | Metric | As of Aug 3, 2025 (in thousands) | As of Feb 2, 2025 (in thousands) | Change (in thousands) | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------- | | Total Assets | $278,043 | $313,942 | -$35,899 | | Cash and Cash Equivalents | $821 | $6,295 | -$5,474 | | Inventories | $58,532 | $70,755 | -$12,223 | | Total Current Assets | $108,142 | $141,124 | -$32,982 | | Long Term Debt | $5,225 | $21,717 | -$16,492 | | Total Liabilities | $84,923 | $109,559 | -$24,636 | | Total Shareholders' Equity | $193,120 | $204,383 | -$11,263 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly increased to $18.1 million in 1H FY26, while net cash used in financing activities rose substantially due to debt repayments Consolidated Statements of Cash Flows | Metric | Aug 3, 2025 (in thousands) | July 28, 2024 (in thousands) | | :------------------------------------ | :------------------------- | :------------------------- | | Net Cash Provided by Operating Activities | $18,107 | $5,314 | | Net Cash Used in Investing Activities | $(2,021) | $(808) | | Net Cash Used in Financing Activities | $(21,560) | $(5,615) | | Net Decrease in Cash and Cash Equivalents | $(5,474) | $(1,109) | | Payments for Long-Term Loans | $(48,955) | $(700) | | Proceeds from Revolving Credit Facility | $32,440 | $0 | [Segment Financial Performance](index=10&type=section&id=Segment%20Financial%20Performance) This section provides a detailed financial breakdown of net sales, gross profit, and operating results by segment, along with order backlog data for Q2 and 1H FY26 [Net Sales, Gross Profit / (Loss), and Operating (Loss) / Income by Segment](index=10&type=section&id=Net%20Sales%2C%20Gross%20Profit%20%2F%20(Loss)%2C%20and%20Operating%20(Loss)%20%2F%20Income%20by%20Segment) This section details net sales, gross profit, and operating results for Hooker Branded, Home Meridian, Domestic Upholstery, and All Other segments for Q2 and 1H FY26, highlighting varied performance Net Sales by Segment | Segment | Q2 FY26 (in thousands) | % Net Sales (Q2 FY26) | Q2 FY25 (in thousands) | % Net Sales (Q2 FY25) | 1H FY26 (in thousands) | % Net Sales (1H FY26) | 1H FY25 (in thousands) | % Net Sales (1H FY25) | | :------------------ | :--------------------- | :-------------------- | :--------------------- | :-------------------- | :--------------------- | :-------------------- | :--------------------- | :-------------------- | | Hooker Branded | $36,250 | 44.1% | $35,785 | 37.6% | $73,359 | 43.8% | $72,593 | 38.5% | | Home Meridian | $16,932 | 20.6% | $30,516 | 32.1% | $35,742 | 21.3% | $56,940 | 30.2% | | Domestic Upholstery | $28,677 | 34.9% | $28,556 | 30.0% | $57,590 | 34.4% | $58,583 | 31.1% | | All Other | $290 | 0.4% | $224 | 0.2% | $774 | 0.5% | $536 | 0.3% | | **Consolidated** | **$82,149** | **100%** | **$95,081** | **100%** | **$167,465** | **100%** | **$188,652** | **100%** | Gross Profit / (Loss) by Segment | Segment | Q2 FY26 (in thousands) | % Net Sales (Q2 FY26) | Q2 FY25 (in thousands) | % Net Sales (Q2 FY25) | 1H FY26 (in thousands) | % Net Sales (1H FY26) | 1H FY25 (in thousands) | % Net Sales (1H FY25) | | :------------------ | :--------------------- | :-------------------- | :--------------------- | :-------------------- | :--------------------- | :-------------------- | :--------------------- | :-------------------- | | Hooker Branded | $10,541 | 29.1% | $10,708 | 29.9% | $21,605 | 29.5% | $22,165 | 30.5% | | Home Meridian | $1,054 | 6.2% | $5,946 | 19.5% | $3,787 | 10.6% | $9,397 | 16.5% | | Domestic Upholstery | $5,305 | 18.5% | $4,646 | 16.3% | $10,585 | 18.4% | $9,351 | 16.0% | | All Other | $(63) | -21.7% | $(378) | -168.8% | $(139) | -18.0% | $(619) | -115.5% | | **Consolidated** | **$16,837** | **20.5%** | **$20,922** | **22.0%** | **$35,838** | **21.4%** | **$40,294** | **21.4%** | Operating (Loss) / Income by Segment | Segment | Q2 FY26 (in thousands) | % Net Sales (Q2 FY26) | Q2 FY25 (in thousands) | % Net Sales (Q2 FY25) | 1H FY26 (in thousands) | % Net Sales (1H FY26) | 1H FY25 (in thousands) | % Net Sales (1H FY25) | | :------------------ | :--------------------- | :-------------------- | :--------------------- | :-------------------- | :--------------------- | :-------------------- | :--------------------- | :-------------------- | | Hooker Branded | $10 | 0.0% | $(329) | -0.9% | $37 | 0.1% | $(150) | -0.2% | | Home Meridian | $(3,916) | -23.1% | $(896) | -2.9% | $(6,754) | -18.9% | $(4,169) | -7.3% | | Domestic Upholstery | $(408) | -1.4% | $(1,285) | -4.5% | $(1,004) | -1.7% | $(2,593) | -4.4% | | All Other | $(87) | -30.0% | $(639) | -285.3% | $(244) | -31.5% | $(1,257) | -234.5% | | **Consolidated** | **$(4,401)** | **-5.4%** | **$(3,149)** | **-3.3%** | **$(7,965)** | **-4.8%** | **$(8,169)** | **-4.3%** | [Order Backlog](index=11&type=section&id=Order%20Backlog) The consolidated order backlog was $51.2 million as of August 3, 2025, with varied trends across segments, including a significant decrease for Home Meridian and growth for Domestic Upholstery Order Backlog by Segment | Reporting Segment | August 3, 2025 (in thousands) | February 2, 2025 (in thousands) | July 28, 2024 (in thousands) | | :------------------ | :---------------------------- | :------------------------------ | :--------------------------- | | Hooker Branded | $15,701 | $13,109 | $15,895 | | Home Meridian | $16,138 | $21,002 | $43,918 | | Domestic Upholstery | $19,313 | $18,123 | $18,066 | | All Other | $- | $402 | $- | | **Consolidated** | **$51,152** | **$52,636** | **$77,879** |

Core Insights - Hooker Furnishings Corporation is focused on returning to profitability through cost-reduction initiatives and strategic growth plans in a challenging market environment [2][3][20] Financial Performance - For Q2 FY26, net sales were $82.1 million, a decrease of 13.6% year-over-year, with an operating loss of $4.4 million compared to a loss of $3.1 million in the previous year [6][30] - The company incurred restructuring costs of approximately $2 million in Q2, contributing to a net loss of $3.3 million [6][30] - Hooker Branded achieved breakeven results despite restructuring costs, while Domestic Upholstery reduced its operating loss by nearly 70% [3][6] Cost Reduction Initiatives - The company is implementing a multi-phase cost reduction strategy aimed at achieving approximately $25 million in annualized savings by FY27, with $10 million identified in FY25 and an additional $15 million in FY26 [5][10] - In the first half of FY26, the company achieved $3.7 million in expense reductions despite incurring $1.7 million in restructuring charges [5][6] Segment Performance - Hooker Branded sales increased by $465,000 (1.3% YoY) in Q2, while Domestic Upholstery's operating loss was reduced to $408,000 [6][14] - Home Meridian's net sales declined by $13.6 million (44.5% YoY) due to various factors including project-based hospitality business declines and customer bankruptcy impacts [6][14] Debt and Cash Management - The company repaid $16.5 million of debt year-to-date while maintaining $57.7 million in borrowing capacity [6][18] - Cash and cash equivalents decreased to $821,000, down $5.5 million from year-end, primarily due to operational cash outflows [18][19] Market Outlook - The home furnishings industry continues to face challenges from low existing home sales, elevated mortgage rates, and persistent inflation, impacting consumer confidence and demand [20] - The company is preparing for the launch of the Margaritaville collection and focusing on growth in hospitality and outdoor channels [20]

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 also 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 point products through brands like Pulaski Furniture, Samuel Lawrence Furniture, and Prime Resources International [4] Financial Information - The fiscal year 2026 second quarter for Hooker Furnishings began on May 5, 2025, and ended on August 3, 2025 [3] - The company will present its fiscal 2026 second quarter financial results via teleconference and live internet webcast on September 11, 2025, at 9:00 AM Eastern Time [1][2]

Core Viewpoint - Hooker Furnishings Corporation will present its fiscal 2026 second quarter financial results on September 11, 2025, at 9:00 AM Eastern Time, via teleconference and live internet webcast [1]. Company Overview - Hooker Furnishings Corporation is in its 101st year of business, specializing in the design, marketing, and importation 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]. - The company operates several brands, including Bradington-Young, HF Custom, Hooker Upholstery, Shenandoah Furniture, H Contract, Home Meridian, and Sunset West, each targeting different market segments and price points [4]. - Corporate offices and manufacturing facilities are located in Virginia, North Carolina, and California, with distribution centers in Virginia, North Carolina, and Vietnam [4].

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** |