Hooker Furnishings Reports Significant Decline in Q3 and Nine-Month Financial Performance

Hooker Furnishings Corporation reported a significant decline in financial performance for the third quarter and first nine months of fiscal 2025, ending October 27, 2024. The company recorded net sales of $104.4 million for the quarter, a decrease of 10.7% from $116.8 million in the same period last year. For the nine-month period, sales fell to $293.0 million, down 12.9% from $336.5 million. The company also reported a net loss of $4.1 million, or $(0.39) per diluted share, compared to a net income of $7.0 million, or $0.66 per diluted share, in the prior year’s third quarter. The nine-month net loss was $10.2 million, or $(0.97) per diluted share, compared to a profit of $9.3 million in the previous year.

The decline in revenue was attributed to several factors, including a downturn in the home furnishings market, increased ocean freight costs, and the bankruptcy of a significant customer, which led to a $2.4 million bad debt expense. Additionally, the company recorded a $2.0 million impairment charge related to its tradenames. Selling and administrative expenses rose to $28.4 million for the third quarter, up from $24.0 million a year earlier, largely due to restructuring costs and increased bad debt expenses. The overall operating loss for the quarter was $7.3 million, compared to an operating income of $8.8 million in the prior year.

In terms of operational developments, Hooker Furnishings has been focusing on cost reduction initiatives, which have begun to yield some benefits, although the company incurred $3.1 million in costs related to these measures during the third quarter. The company also temporarily paused its Enterprise Resource Planning (ERP) project in the Home Meridian segment as part of its cost-cutting strategy. The total employee headcount remained stable, with no significant changes reported.

Looking ahead, the company expressed cautious optimism regarding the macroeconomic environment, noting recent trends such as declining interest rates and improving consumer sentiment. These factors could potentially lead to a recovery in the home furnishings market. However, Hooker Furnishings remains focused on managing its costs and improving operational efficiencies while preparing for future growth opportunities. The company has also secured covenant waivers from its lender, Bank of America, which should provide additional financial flexibility moving forward.