Hooker Furnishings Reports 5.9% Sales Slip as Bloated Retail Inventories Take Toll

September 8, 2022  by HFBusiness Staff in Business Strategy, Industry   

The company’s domestic upholstery segment, by contrast, recorded a massive 62 percent sales gain, and the Hooker branded segment, which includes imported case goods and upholstery, saw a 5.8 percent sales gain.

Net income for the quarter -- the second quarter of its fiscal year -- fell more than 26 percent to $5.5 million or 46 cents per share.

“While consolidated sales were down modestly from a year ago, they improved from last quarter, and we expect an even more positive trajectory going forward,” said Jeremy Hoff, CEO. “As factory production in Asia ramped up to near full capacity, consolidated sales and earnings exceeded our internal expectations, and we reported sales increases in 2 of our 3 segments.”

He said the Home Meridian sales decline was due to bloated retail inventories and the company’s decision to stop selling product to warehouse clubs, which had proven to be an unprofitable channel.

For the fiscal first half, net sales were $300.2 million, a decrease of $25.2 million or 7.7 percent, and net income was $8.7 million, or $0.73 per diluted share. That compared with 16.9 million, or $1.40 per diluted share in the first half of the prior year.

“We are in a much better position for the second half than a year ago when factories overseas closed due to the Covid-19 pandemic,” said Hoff, “Strong backlogs, full production capacity and optimum inventory levels position us to grow sales across all three segments as the second half progresses.”