Hooker Furnishings Corp. Reports Fourth Quarter and Year End Results

April 16, 2026  by Karen Parrish in Business Strategy, Industry   

Key Results for the Fourth Quarter Fiscal 2026:

Continuing operations returned to profitability with operating income of $0.6 million despite lower sales volume.

Net sales of $67.0 million, down 20.5% year-over-year, primarily due to lower hospitality project shipments and a one-week shorter quarter.

Hooker Branded delivered operating income, supported by margin improvement and disciplined cost control.

Domestic Upholstery operating loss reduced by more than 50%, reflecting cost reduction initiatives and operational improvements.

Completed divestiture of Pulaski Furniture and Samuel Lawrence Furniture, advancing portfolio simplification and strategic focus.

Key Results for the Fiscal 2026 Full-Year:

Net sales of $278.1 million, down 12.4% year-over-year, driven by lower hospitality sales and a shorter fiscal year.

Gross margin increased 180 basis points and SG&A decreased by $11.9 million, reflecting structural cost improvements.

Operating loss of $16.5 million, primarily due to $15.6 million in non-cash impairment charges.

Hooker Branded returned to profitability, while Domestic Upholstery gross margin improved significantly.

Divested Pulaski Furniture and Samuel Lawrence Furniture, simplifying the portfolio and exiting lower-margin businesses.

Executive Commentary

“We are encouraged to report net income of $536,000 for the quarter,” said Jeremy Hoff, Chief Executive Officer. “Fiscal 2026 was incredibly transformative as we successfully navigated significant, disruptive tariffs on our imports, opened a successful fulfillment warehouse in Asia and exited two unprofitable divisions, all while reducing fixed costs by about $26.3 million, or 25%, of which approximately $17.5 million in fixed cost savings is related to the continuing operations. At the same time, we delivered slight market share growth, with strength in key businesses offsetting isolated softness, and launched our Margaritaville line, which is delivering on our expectation to be the most impactful product launch in company history.”

Hoff continued, “Today, we move forward as a leaner, higher-margin business with a much lower break-even point and the potential for significant profitability as demand returns. We believe we are positioned for a significant improvement in earnings in fiscal 2027 with our expectations bolstered by the early indications of strength within our Margaritaville product line, and we see a clear path to sustained profitable growth by focusing on our core expertise of better-to-best home furnishings.”

“Fourth quarter net income of $536,000 includes a $338,000 net loss from discontinued ops, related to the Pulaski Furniture and Samuel Lawrence Furniture businesses in the quarter,” said Earl Armstrong, Chief Financial Officer. “Other items affecting the quarter included one fewer week of sales as compared to the prior year quarter, and lower revenue due to disruptive winter storms in our largest markets and continued lower overall demand due to macroeconomic factors affecting our industry. We estimate the severe winter weather in January 2026 reduced net sales by approximately $3 to 4 million.”

Armstrong continued, “For Fiscal 2026, we reported a consolidated net loss of approximately $27 million. $15.6 million ($11.7 million net of tax) of that net loss was driven by goodwill and tradename impairment charges under the continuing operations, and $14.2 million was driven by a net loss from discontinued operations. Additionally, we recorded approximately $2 million ($1.5 million net of tax) in restructuring charges in continuing operations.”

Hoff continued, “Despite significant headwinds, we are encouraged to report that the Hooker Branded segment reported $1.9 million in operating income for the year compared to a prior year operating loss of $433,000. Additionally, despite a significant impairment charge in the third quarter, the Domestic Upholstery segment showed improvements in the fourth quarter reducing its operating loss by more than 50% as compared to the prior year quarter, due to cost reduction initiatives and operational improvements.”

Segment Reporting

Hooker Branded

Hooker Branded net sales decreased 2.9% for fiscal 2026, with the decline entirely driven by a $5.5 million decrease in the fourth quarter, primarily due to one fewer selling week, as well as supplier delays and weather-related shipping disruptions. Unit volume declined, partially offset by a 5.7% increase in average selling price implemented to mitigate higher costs and tariffs. Despite lower sales, full-year gross margin expanded by 200 basis points, driven primarily by lower freight costs and pricing actions. Operating income improved to $1.9 million for the year compared to an operating loss in the prior year, while fourth quarter operating income of $1.2 million was consistent with the prior year despite reduced selling days. Incoming orders were flat year-over-year, while backlog increased 25.8%.

Domestic Upholstery

Domestic Upholstery net sales decreased 2.7% for fiscal 2026, reflecting lower unit volumes in certain divisions, partially offset by growth in contract, private label, and outdoor channels. Gross margin improved by 230 basis points for the full year, driven by lower material costs, reduced labor and overhead expenses, and benefits from cost reduction initiatives. The segment reported an operating loss of $16.9 million for the year, largely due to $15.0 million in non-cash impairment charges, compared to an operating loss of $5.4 million in the prior year. In the fourth quarter, operating loss was $1.2 million, reduced by more than half from the prior year, reflecting cost reduction actions despite lower sales. Incoming orders decreased slightly by 1.9%, while backlog increased 7.9% year-over-year.

Discontinued Operations

Discontinued operations, consisting of the Pulaski Furniture and Samuel Lawrence Furniture businesses, reported significantly lower sales in fiscal 2026 due to both the December divestiture and a 52.6% decline in unit volume, driven by macroeconomic pressures and tariff-related purchasing hesitancy among value-oriented customers. For the full year, the segment recorded a pre-tax loss of $18.7 million, including restructuring costs, asset impairments, fair value write-downs, and bad debt expense related to customer bankruptcy. In the fourth quarter, discontinued operations recorded a net loss of $338,000 through the divestiture date, driven by unfavorable product and customer mix and declining demand.

Import Tariffs

After the Company’s fiscal year-end, in February 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the International Emergency Economic Powers Act were not authorized by statute. In March 2026, the U.S. Court of International Trade directed U.S. Customs and Border Protection to implement a refund process for previously collected duties. The Company is evaluating the potential recovery of these amounts. Additionally, the administration appears poised to pivot to new tariffs under different legal authority. The Company continues to monitor developments in this area.

Cash, Debt, and Inventory

Cash and cash equivalents stood at $1.1 million, a decrease of $5.2 million from prior year-end; however, amounts due under the Company’s revolver decreased by $18.5 million to $3.6 million at year-end. Cash generated from operations was used to repay $18.5 million of the term loan, distribute $8.8 million in cash dividends, and fund $3.2 million capital expenditures. Inventory levels decreased by $17.5 million from $66.2 million at prior year-end to $48.7 million at current year-end. The Company received approximately $5.5 million in cash proceeds from the sale of discontinued operations.

Despite these outflows, the Company maintained its financial flexibility with $62.8 million in available borrowing capacity under its Amended and Restated Loan Agreement as of fiscal year-end, net of standby letters of credit.

As of April 15, 2026, the Company had approximately $12 million in cash on hand, with $64.1 million in available borrowing capacity, net of standby letters of credit, and no outstanding balance on the credit facility.

Capital Allocation

“On December 11, 2025, Hooker announced that its Board of Directors authorized a new share repurchase program under which the Company intends to repurchase up to $5 million of our outstanding common shares beginning in fiscal 2027,” said Armstrong. In connection with the repurchase authorization, the Board recalibrated the annual dividend to $0.46 per share annually, which began with the Company’s December 31, 2025, dividend payment.

“As Hooker transitions to a more focused, growth-oriented company, the new share repurchase program, together with the adjusted dividend, enables us to return capital to shareholders while maintaining the balance sheet flexibility needed to invest in the business,” said Armstrong. “We believe these actions appropriately balance capital returns with liquidity, while supporting long-term shareholder value,” he concluded.

The repurchase authorization does not obligate the Company to acquire a specific number of shares during any period and does not have an expiration date, but it may be modified, suspended, or discontinued at any time at the discretion of the Board. Repurchases may be made from time to time in the open market, or through privately negotiated transactions or otherwise, in compliance with applicable laws, rules and regulations, and subject to the Company’s cash requirements for other purposes, compliance with the covenants under the Amended and Restated Loan Agreement and other factors it deems relevant.

Outlook

“In the Hooker Branded and Domestic Upholstery segments, incoming orders have increased year-over-year for three consecutive quarters, adjusted for the extra week in last year’s fourth quarter,” Hoff added.

“Housing activity and consumer confidence remain weak, and the Department of Commerce’s February advance monthly estimates reflect that reality, showing that retail sales for furniture and home furnishings decreased by 5.6% as compared to the prior year and lower than January 2026. We don’t anticipate near-term meaningful improvement in conditions; however, with a more efficient cost structure and a streamlined portfolio, we believe we are positioned to report much improved results if current market conditions persist,” Hoff said.

“Our advantage is a clear focus on our core businesses, with the organization fully aligned to drive organic growth and deliver more consistent, sustainable earnings over time. Margaritaville product and gallery commitments continue to scale, with shipments expected to begin in the second half of fiscal 2027,” Hoff concluded.

Conference Call Details
Hooker Furnishings will present its fiscal 2026 fourth quarter and full year financial results via teleconference and live internet webcast April 16th.

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.