Hooker Furnishings Corp. Reports First Quarter 2026 Fiscal Results

June 15, 2025  by Karen Parrish in Business Strategy, Industry   

Key Results for the Fiscal 2026 First Quarter:

— The Company lowered its operating loss by $1.6 million, or 31%, from the prior year first quarter to $3.6 million, driven by cost-saving initiatives launched in the second half of last year and despite reduced net sales in the quarter.

— The Company reduced operating expenses by $2.2 million versus the prior year first quarter. This reduction occurred despite the first quarter fiscal 2026 results including $523,000 in restructuring costs, primarily severance.

— The Company reported consolidated net sales of $85.3 million for the first quarter, a decrease of $8.3 million, or 8.8%, compared to the same period last year.

— Hooker’s legacy brands sales were stable, with Hooker Branded net sales increasing slightly by 0.8%, driven by higher unit volume, while the Domestic Upholstery Segment saw a slight 3.7% sales decrease, compared to the prior year first quarter, respectively.

— The overall decrease in consolidated sales was primarily driven by a double-digit sales decrease at HMI, which is positioned in the mid-price segment where import tariffs have more sharply curtailed demand.

— Hooker Branded achieved breakeven profitability for the quarter, while Domestic Upholstery and Home Meridian significantly narrowed operating losses by $713,000 (55%) and $584,000 (17%), respectively, from the prior year period.

— Gross margin improved by 180 bps, maintaining overall gross profit levels despite lower net sales. The Company recorded a net loss of $3.1 million, or ($0.29) per diluted share, an improvement from a $4.1 million loss, or ($0.39) per diluted share in the prior year first quarter.

— Hooker Furnishings began stocking inventory in a leased warehouse in Vietnam during the quarter. This facility allows retail customers to mix product collections in containers, improving product flow, inventory turns, and margin potential.

Management Commentary
“We continue to take significant and deliberate actions to stabilize the Company, drive improved sales and deliver strong gross margins as we execute on our significant cost savings program without losing our focus on quality, service, our strategic vision and increasing shareholder value,” said Jeremy Hoff, Chief Executive Officer. “We delivered the eighth consecutive quarter of consistent market share gains within Hooker’s legacy brands, which includes Hooker Branded and Domestic Upholstery. The Spring High Point Market was exceptional for the Company, especially with two new case goods collections in our collected living format. In addition, we had significant placements on the debut of our “Living Your Way” modular upholstery program offered in both stationary and motion in multiple scale and cover options.”

Hoff continued, “Our progress is steady, and we are executing within all aspects of the business that we are able to control. Notwithstanding our strategic progress, the home furnishings industry continues to navigate a challenging environment, driven by persistent softness in the housing market, higher mortgage rates, and declining consumer sentiment. Existing home sales remain well below pre-pandemic levels, and the sharp rise in borrowing costs has dampened housing mobility, which traditionally fuels furniture demand. At the same time, consumer confidence has dropped to near historic lows, with many households pulling back on discretionary spending. These macroeconomic headwinds are weighing heavily on our industry, and we remain focused on adapting to the realities of today’s market.”

“In the face of these challenges, we are continuing to achieve significant cost savings through our ongoing programs. Our year-over-year operating and gross margin improvements during the first quarter were driven by the $2.2 million in cost savings from our initial round of cost reductions we announced a year ago,” said Hoff. “Since the initial announcement, we have expanded our cost reduction initiatives through the exit of the Savannah Warehouse and opening of a leased Vietnam Warehouse. These moves, particularly our strategic shift to the Vietnam warehouse, will result in accelerated savings and improvements as the current fiscal year progresses.”

“In total, from the June 2024 start of our initiative, we anticipate reducing our total annual spend rate by approximately 25%. These savings alone will substantially improve profitability – and as conditions improve, our position for growth strengthens accordingly, as will our ability to drive value for shareholders through disciplined execution and capital stewardship,” Hoff said.

Adjusting to Import Tariff Increases and Uncertainties
After initially announcing double-digit tariffs on imported finished goods and component parts, including a 46% tariff on imports from Vietnam -- a leading source country for Hooker and much of the industry -- the US Government issued a pause on tariffs until July. Currently, a 10% tariff on all imports is in place, with additional tariffs on China, Mexico and Canada also pending.

Hoff continued, “We believe we’ve successfully mitigated the across-the-board 10% tariff through participation by our source factories and through a 5% price increase effective last month. Like everyone else, we are waiting to hear in July what the final tariff may be for Vietnam, where we source over 80% of our products. We will act responsibly, not reactively, and are positioned with a solid financial foundation and balance sheet that are built to navigate challenging times,” Hoff said.

Outlook
“According to U.S. Census Bureau monthly retail trade survey, furniture retail sales have shown modest improvement in recent months. April sales were slightly higher compared to the January–March period and increased 5.6% year-over-year. However, existing home sales remain subdued, currently operating at approximately 75% of typical pre-pandemic levels for the third consecutive year. Despite these headwinds, inflation and employment indicators have remained relatively stable.

To navigate the ongoing economic challenges, we continue to prioritize product innovation, cost optimization, and operational excellence. These strategic imperatives position us to capitalize on emerging opportunities as macroeconomic conditions improve, ultimately driving long-term shareholder value.

Key initiatives include the launch of our new Margaritaville licensing program, a best-in-class international warehouse that enables us to reduce domestic safety stock, preserve working capital, and shorten lead times, and our Collected Living whole-home merchandising approach, which received strong validation at the April High Point Market.

We are very encouraged by fiscal May orders at Hooker Legacy, which were the highest since February 2022 (fiscal 2023). On the Hooker legacy side, May orders were up nearly 33% as compared to the prior year. Hooker Branded orders were up nearly 40% and Domestic Upholstery orders were up 25%, both as compared to fiscal May of the prior year.

Additionally, we are preparing to launch a redesigned corporate website in October, which we expect will:

enhance digital customer experience, improve lead generation, and support omni-channel growth;
drive consumer engagement, streamline e-commerce navigation, and support our retail partners; and
serve as a hub for product education and lifestyle inspiration, increasing time-on-site and conversion rates.

Within our Domestic Upholstery segment, the newly introduced “Live Your Way” strategy is designed to:

deliver customizable, lifestyle-oriented solutions tailored to evolving consumer preferences;
offer tailored upholstery options that align with today’s diverse lifestyles and consumer expectations;
focus on modularity, flexibility, and personalized comfort, meeting the needs of design-savvy customers; and
emphasize customization and quality craftsmanship, reinforcing our leadership in the premium upholstery segment.

We are simultaneously driving operational efficiencies across the segment and are beginning to observe measurable improvements in performance,” Hoff concluded.

Conference Call Details
Hooker Furnishings will present its fiscal 2026 first quarter financial results via teleconference and live internet webcast on Thursday morning, June 12^th, 2025 at 9:00 AM Eastern Time.

A live webcast of the call will be available on the Investor Relations page of the Company’s website at https://investors.hookerfurnishings.com/events and archived for replay.