MARTINSVILLE, Va., April 17, 2025 (GLOBE NEWSWIRE) -- Hooker Furnishings Corporation (NASDAQ-GS: HOFT), a prominent player in the global home furnishings market for over a century, has announced its operating results for the fourth quarter and full fiscal year ending on February 2, 2025. This fiscal period included 14 weeks in the fourth quarter and 53 weeks for the full year, contrasting with 13 weeks and 52 weeks in the same periods last year.

Key Results for Fiscal 2025 Fourth Quarter:

The company reported net sales of $104.5 million for the fourth quarter, representing an 8% increase from the $96.8 million recorded in the same quarter the previous year. This boost was significantly impacted by the additional week in the current fiscal period, accounting for approximately $7.7 million of the consolidated net sales increase based on average net sales per shipping day. Notably, sales from the Hooker Branded segment grew by 2.1%, while Home Meridian saw a remarkable increase of 13.0% during the same period.

However, the company faced a consolidated operating loss of $2.7 million, or (2.5%) of net sales, compared to an operating income of $340,000, or 0.4% of net sales, reported in the fourth quarter of the prior year. The financial landscape was further complicated by a consolidated net loss of $2.3 million, translating to a loss of $0.22 per diluted share, down from a net income of $593,000, or earnings of $0.06 per diluted share, during the previous years quarter.

Several charges recorded in the fourth quarter totaled $3.1 million. This included $1.3 million in end-of-life inventory write-downs associated with the planned exit of the Savanah facility, $878,000 in non-cash tradename impairment charges related to the Home Meridian segment, $718,000 in bad debt expenses due to a significant customer bankruptcy (adding to the $2.4 million recorded in the third quarter), and $199,000 in severance costs tied to the companys previously announced cost reduction plan.

Key Results for Fiscal 2025 Full Year:

For the entire fiscal year 2025, consolidated net sales dipped to $397.5 million, down by $35.8 million or 8.3% from the prior fiscal year. This decline was evident across all three reportable segments, driven primarily by weak consumer demand, a struggling housing market, and broader macroeconomic uncertainties that have impacted nearly the entire home furnishings industry.

The consolidated operating loss for the full year was $18.1 million, equivalent to (4.6%) of net sales, in stark contrast to an operating income of $12.4 million, or 2.9% of net sales, recorded in the previous year. Moreover, the company faced a substantial consolidated net loss of $12.5 million, translating to a loss of $1.19 per diluted share, compared to a net income of $9.9 million or earnings of $0.91 per diluted share in the previous year.

Throughout fiscal 2025, significant charges totaled $10.8 million, which included $4.9 million related to restructuring costs from its initial cost reduction plan, $3.1 million in bad debt expense due to a major customer's bankruptcy, and $2.8 million in non-cash tradename impairment.

Despite these losses, fiscal 2025 saw notable milestones, including a lucrative licensing agreement with Margaritaville, the introduction of a new merchandising strategy under Hooker Branded, Sunset Wests expansion on both coasts, key inventory investments, and a gain in market share despite challenging market conditions.

There was also year-over-year market share growth ranging from 3 to 15 basis points in the first three quarters of fiscal 2025 across Hookers Legacy divisions, with fourth-quarter data still pending, continuing a trend of sequential market share gains observed throughout fiscal 2024.

Planned Cost Savings Announced:

The company has projected cost savings of at least $0.8 to $1.0 million for fiscal 2026, net of associated transition costs, due to the exit from its Savannah warehouse, which was announced in March 2025. Actual savings will depend on the precise timing of the exit. Furthermore, annualized cost savings from this exit are anticipated to be between $4.0 to $5.7 million starting in fiscal 2027.

In addition to the $10 million in annualized cost savings previously announced, the company revealed plans for further annualized cost savings ranging from $8 to $10 million, which will include the Savannah exit, with completion expected in the second half of fiscal 2026. Once fully implemented, the total annualized savings from these two plans are anticipated to fall between $18 million to $20 million, effective from fiscal 2027. The company is currently assessing the financial implications of the Savannah warehouse exit and expects to incur net charges of between $3.0 million to $4.0 million in fiscal 2026 as a result.

Management Commentary:

Jeremy R. Hoff, the CEO, commented on the companys performance: Excluding these charges, our financial performance improved sequentially each quarter throughout the year. Even considering the extra week, Hooker Branded and Home Meridian sales increased. Hoff also expressed optimism regarding the market share gains achieved by Hooker Legacy during each fiscal quarter and stressed the importance of remaining focused on controllable factors amidst ongoing macroeconomic challenges, including a sluggish housing market and shifting consumer confidence.

Our accelerated cost reduction initiatives are expected to enhance operating income and cash flow, he continued, noting the planned closure of the Savannah warehouse and the opening of a new leased facility in Vietnam, which aims to streamline product flow and improve margins.

Segment Reporting:

In segment reporting, the Hooker Branded division saw fourth-quarter net sales increase by $3.8 million or 10.0%, buoyed by a 14% surge in unit volume. Operating income, however, fell to $1.1 million from $3.5 million in the previous year, although it showed improvement from losses earlier in fiscal 2025. For the annual performance, net sales in this segment declined by $10.1 million or 6.5% due to a drop in average selling prices and higher discounting rates, partially offset by a rise in volume.

The Home Meridian segment experienced a 21.7% year-over-year increase in fourth-quarter net sales, reaching $6.3 million, primarily driven by hospitality sales, despite some weakness in traditional channels. However, the segment reported an operating loss of $500,000 due to various charges.

The Domestic Upholstery segment also reported a decline in fourth-quarter net sales by $2.0 million, reflecting soft demand across its brands, including Shenandoah and Bradington-Young, and seasonal fluctuations shown at Sunset West.

Cash, Debt, and Inventory Management:

As of the end of the fiscal year, cash and cash equivalents were reported at $6.3 million, a decrease of $36.9 million compared to the previous year. This decline was primarily attributed to increased accounts receivable and an uptick in inventory levels. Despite the challenges, the company maintained a robust financial position with $41 million in available borrowing capacity under its renewed loan agreement.

We strategically increased inventory to facilitate the launch of major new collections, CFO Earl Armstrong noted, aiming to enhance product availability and mitigate anticipated supply disruptions.

Outlook:

Looking ahead, Hoff acknowledged the prevailing economic uncertainty and its impact on consumer sentiment and home sales. He emphasized the companys focus on identifying additional efficiency opportunities while continuing to invest in high-potential growth areas of the business.

Hooker Furnishings Corporation will present its financial results during a teleconference and live internet webcast scheduled for April 17, 2025, at 9:00 AM Eastern Time. Investors can access the live call on the companys investor relations webpage.

Hooker Furnishings Corporation, now in its 101st year, specializes in the design and marketing of a diverse range of home furnishings, including casegoods, upholstery, and outdoor furniture. The company operates multiple brands and maintains a strong presence across various markets.