Hooker Furniture(US:HOFT)2024-04-11 15:11Financial Data and Key Metrics Changes - For fiscal 2024 fourth quarter, consolidated net sales decreased by $34 million or 26% to $96.8 million due to sales decreases in all segments driven by soft demand for home furnishings [3][19] - Net income for the fourth quarter was $593,000 or $0.06 per diluted share, compared to a net loss of $17 million or $1.60 per diluted share in the prior year [3] - Consolidated net sales for fiscal 2024 were $433 million, a decrease of $150 million or 25.7% compared to the previous year [92] Business Line Data and Key Metrics Changes - The Hooker Branded segment's net sales decreased by $49 million or 24% compared to the prior fiscal year, primarily due to soft demand for home furnishings [21] - Home Meridian segment sales decreased by $73 million or 34% compared to the prior fiscal year, with the exit of unprofitable businesses accounting for about 26% of the sales decrease [39] - Domestic Upholstery segment's net sales decreased by $30 million or 19% compared to the all-time record sales achieved in the prior fiscal year [40] Market Data and Key Metrics Changes - Year-end backlog was 16% lower than the previous year-end but increased by 30% compared to the fiscal 2024 third quarter end [11] - Year-to-date consolidated orders are down in the mid-single digits compared to the same prior year period [26] - The backlog at the end of the fourth quarter was $72 million, with orders for the quarter at $94 million, up from $88 million in the prior year [79] Company Strategy and Development Direction - The company is focusing on strategic investments to expand its addressable market and has consolidated merchandising for legacy brands to drive creative excellence [7][5] - The company aims to position itself as a whole home consumer-centric resource, driving synergies among brands to increase sales and earnings when demand returns [97] - Capital allocation priorities include investing in organic growth and maintaining a strong balance sheet while continuing to pay dividends [25] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism due to recent strong growth in building permits and single-family housing starts, despite soft demand in the home furnishings industry [14][26] - The company is encouraged by improvements in order rates and backlog growth, indicating potential for future revenue increases [56][104] - Economic indicators are mixed, leading to a cautiously optimistic outlook for the upcoming fiscal year [26] Other Important Information - The company increased cash by $24 million to over $43 million at year-end and reduced inventory levels by $35 million or 36% [6][12] - The company completed a share repurchase program, spending a total of $25 million to purchase and retire 1.4 million shares [102] - The company is celebrating its 100th anniversary with various activities, including a philanthropic program called "100 Acts of Kindness" [28][44] Q&A Session Summary Question: Can you discuss the fourth quarter performance and the balance sheet? - Management acknowledged the challenging environment but highlighted improvements in the balance sheet and strategic investments made [29] Question: What are the expectations for revenue in the first quarter? - Management indicated a conservative view on revenue due to lower backlogs but expressed encouragement from increased order rates [56] Question: Can you elaborate on the recent management changes in merchandising? - Management clarified that the changes were made to invest in the most profitable areas of the business and to align different brands for better growth [58][65] Question: What is the outlook for inventory management going forward? - Management stated that inventory management processes have improved, and any future inventory build would be modest [68][70] Question: What are the ideal acquisition targets for the company? - Management emphasized a focus on internal growth and treating existing businesses as new acquisitions to drive synergy and growth [76]