Hooker Has Good Year in '12

April 10, 2012  by in UnCategorized   

By Home Furnishings Business in Financial Reports on April 11, 2012

Hooker Furniture (NASDAQ: HOFT) reported fiscal 2012 sales of $222.5 million and net income of $5.1 million, increases of 3.3 percent and 56.1 percent over 2011.

For the fourth quarter, which ended Jan. 30, Hooker's sales dipped 1.1 percent to $54 million, but the company netted $628,000 versus a loss of $182,000 in the fourth quarter of fiscal 2011.

Chairman and CEO Paul B. Toms Jr. attributed the slight sales dip to soft demand at retail and to sourcing transitions that delayed shipments of recent introductions.

"As we work through some vendor shifts from China to Vietnam and Indonesia, initial shipments of several well-placed new collections were delayed a few months, which impacted the fourth quarter," he said.

Hookers's casegoods and upholstery divisions each achieved sales increases of slightly over 3 percent for the year. Within the upholstery division, Bradington-Young's imported leather sales were up nearly 9.4 percent, and Sam Moore's domestically produced custom upholstery line increased shipments by almost 13.6 percent. Shipments of Bradington-Young's domestically produced line decreased approximately 7 percent year over year.

"All things considered, we had a very good year," said Paul B. Toms Jr., chairman and chief executive officer. "Progress in many areas of our operations this year enabled us to grow profits over 50% on a 3.3% sales increase. As the year moved forward, we reduced excess inventory, improved our cash flow and cut operating losses in our upholstery division substantially."

Looking ahead, Toms said the company expects "the sourcing transition from some of our vendors in China to vendors in Vietnam and Indonesia will continue to result in somewhat longer lead times and shipping delays, which will likely impact sales throughout the first quarter and to a diminishing degree in the second quarter. We'll have a lot of help in getting our arms around these sourcing challenges from our new Vice President of Asian Operations, Bill Reece, an industry veteran who recently joined Hooker. Bill is highly respected and has over 20 years of experience in Asia. We believe his expertise will help us improve our vendor performance and vendor alignment, matching our product line with those sources that best fit our customers' expectations for quality, on-time delivery, and value.

"While most macroeconomic indicators are continuing the long thaw that began a year or so ago, certain concerns still exist, such as the slow rebound of the housing market, global economic instability and, most recently, rising fuel costs. We expect consumer confidence and furniture retail demand to improve as we progress through the year. On the sales side, we're going up against a nearly 14% sales increase in the comparable quarter a year ago that was driven by our heavy discounting at the time. Yet due to our operational improvements, reduced discounting activity and more favorable freight rates, we're hopeful we can deliver better profitability, even on reduced sales, in the first quarter this year."

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