Hooker Furnishings Reports Decline in Sales and Net Income for Q2 and H1 of Fiscal 2025

Hooker Furnishings Corporation reported a challenging financial performance for the second quarter and first half of fiscal 2025, which ended on July 28, 2024. For the thirteen weeks ended July 28, 2024, net sales totaled $95.1 million, a decrease of 2.8% from $97.8 million in the same period last year. The decline in sales was attributed to lower demand for home furnishings, with the Domestic Upholstery and Hooker Branded segments experiencing significant drops in sales, while the Home Meridian segment saw a modest increase due to strong hospitality sales.

Gross profit for the second quarter was $20.9 million, representing 22.0% of net sales, down from $23.3 million (23.9% of net sales) in the prior year. The decrease in gross profit was driven by higher product costs and an unfavorable customer mix in the Home Meridian segment. The company reported an operating loss of $3.1 million for the quarter, compared to an operating income of $1.3 million in the same period last year.

For the first half of fiscal 2025, net sales were $188.7 million, a significant decline of 14.1% from $219.6 million in the first half of fiscal 2024. The consolidated gross profit for this period was $40.3 million (21.4% of net sales), down from $51.2 million (23.3% of net sales) in the previous year. The company reported an operating loss of $8.2 million for the first half, compared to an operating income of $3.2 million in the same period last year.

Net losses were reported at $2.0 million for the second quarter, translating to a basic loss per share of $(0.19), compared to net income of $785,000 and earnings per share of $0.07 in the prior year. For the first half, the net loss was $6.0 million, or $(0.57) per share, compared to a net income of $2.2 million, or $0.20 per share, in the previous year.

The company’s cash flow also reflected the downturn, with net cash provided by operating activities dropping to $5.3 million in the first half of fiscal 2025, down from $51.4 million in the same period last year. Cash and cash equivalents decreased by $1.1 million, ending the period at $42.1 million.

Strategically, Hooker Furnishings has implemented a common Enterprise Resource Planning (ERP) system across its divisions and is in the process of integrating the assets acquired from BOBO Intriguing Objects. The company has also faced challenges with its financial covenants, obtaining waivers from Bank of America due to non-compliance with certain ratios. As of July 28, 2024, the company had $28.3 million available under its revolving credit facility, with plans to finalize a new credit facility in the upcoming quarter.