Core Insights - Hooker Furnishings Corporation has announced a strategic divestiture of its value-priced home furnishings brands, Pulaski Furniture and Samuel Lawrence Furniture, to focus on higher-margin, design-led products and improve profitability [2][4] - The company reported a consolidated net sales decrease of 14.4% in Q3 2026, primarily due to a significant reduction in shipments from the discontinued operations [8][9] - A new shareholder return program has been introduced, including a share repurchase authorization of up to $5 million and a recalibrated dividend, reducing the annual dividend by 50% to $0.46 per share [14][15][16] Financial Performance - For the fiscal 2026 third quarter, net sales were $70.73 million, down from $82.67 million in the same period last year, with a gross profit of $18.09 million [28] - The company recorded a Q3 operating loss of $16.32 million, largely due to non-cash impairment charges of $15.58 million and restructuring costs [29] - Cash and cash equivalents decreased to $1.4 million, with inventory levels dropping from $66.2 million at year-end to $52.1 million at quarter-end [12][13] Cost Reduction Initiatives - Hooker Furnishings has implemented multi-phased cost reduction initiatives, achieving approximately $25–$26.5 million in annualized savings, which positions the company for profitability despite ongoing industry challenges [4][6] - The company has reduced its overall cost structure by 25% over the past 18 months, which is expected to continue into fiscal 2027 [4][8] Segment Performance - Hooker Branded segment experienced a 1.1% increase in net sales for both the third quarter and nine-month period, driven by higher average selling prices [9][10] - Domestic Upholstery net sales rose by 3.0% in Q3, with mixed performance across divisions, while the All Other category saw a significant decline due to macroeconomic pressures [10][11] Strategic Outlook - The launch of the Margaritaville licensed collection is anticipated to drive organic growth, supported by a new showroom experience and retailer commitments [4][19] - The company aims to transition from a cost reduction narrative to an organic growth story, focusing on its core expertise in better-to-best home furnishings [4][19]

Core Viewpoint - Hooker Furnishings Corporation has entered into a definitive agreement to sell its Pulaski Furniture and Samuel Lawrence Furniture casegoods brands to Magnussen Home Furnishings, aiming to streamline its portfolio and enhance profitability [1][2] Financial Details - The estimated purchase price for the transaction is approximately $4.8 million, subject to final adjustments at closing based on the net book value of the assets sold [1] - The company will also eliminate approximately $4.8 million in Home Meridian showroom lease liabilities, as Magnussen will assume the lease of HMI's High Point showroom [1] - Hooker expects to record non-cash impairment charges between $5 to $6 million related to the write-down of HMI intangibles and fixed assets [3] Strategic Focus - The CEO of Hooker Furnishings emphasized that this sale is part of a multi-year effort to focus on brands that generate consistent earnings and to create a more efficient cost structure [2] - The company plans to retain the Samuel Lawrence Hospitality brand, which will be included in its "All other" segment [2] - Hooker is optimistic about future growth opportunities, particularly following the recent launch of its Margaritaville licensed collection [2] Transaction Timeline - The transaction is subject to customary closing conditions and is expected to close by mid-December 2025 [2] - Ten percent of the purchase price will be held back for 210 days for customary indemnification and final purchase price adjustments [2] Upcoming Events - Hooker Furnishings will provide further updates on its business and the sale during its fiscal 2026 third quarter earnings call scheduled for December 11, 2025 [4]