Hooker Earns Profit on Lower Sales

April 13, 2010  by in UnCategorized   

By Home Furnishings Business in Financial Reports on April 14, 2010

Hooker Furniture (HOFT) on Tuesday reported net sales of $203.3 million and net income of $3 million--respective decreases of 22.1 percent and 56.6 percent--for its 2010 fiscal year, which ended Jan. 31.

Net sales for the fiscal 2010 fourth quarter decreased $3.8 million to $52.7 million, or 6.7 percent. The company reported net income of $3 million or $0.28 per share for the period.

"Given the inconsistent demand at retail, we're pleased that we were able to post a respectable profit in the fourth quarter and that sales seem to have stabilized," said Paul B. Toms Jr., chairman, chief executive officer and president. "Our upholstery division is leading the way on top line performance. Consistent with overall industry trends, our upholstery shipments have rebounded earlier and stronger than wood furniture shipments. Profitability has been positively impacted by reductions made in our cost structure, improved work schedules and capacity utilization in our upholstery division and lower warehousing and distribution expenses."

Toms pointed out that wood furniture incoming order rates are trending slightly better than shipments.

"We're seeing delivery times lengthen somewhat from most of our largest suppliers," he said. "We are addressing the situation by adjusting orders and working with our Asian staff and those suppliers to bring lead times down."

Toms said that despite an order pick-up in late summer and early, most of its retailers report continued sporadic traffic and sales.

"The uptick in orders last fall was as much a function of retailers restocking lean inventories as it was increased demand, because consumers have not returned to retail stores in large numbers or gone back to historical spending patterns," he said. "While we are seeing positive economic indicators such as the stabilization of home values and improving trends in employment and the stock market, we expect that large ticket deferrable purchases like furniture will be the last to benefit from an improved economy."