by Company also reports net losses for the quarter and the full year tied to inventory write downs, bad-debt expenses and restructuring costs
MARTINSVILLE, Va. — Hooker Furnishings reported an 8% increase in total net sales and a net loss of $2.3 million for the fourth quarter and full year ended Feb. 2.
For the full year, it reported an 8% decline in net sales and a consolidated net loss of $12.5 million.
Net sales for the quarter totaled $104.5 million, compared with $96.8 million the same period a year earlier.
The company said an additional week in the fiscal quarter contributed to the increase, adding about $7.7 million to its consolidated net sales based on average net sales per shipping day. It also noted that its Hooker branded and Home Meridian sales rose by 2.1% and 13% respectively based on average net sales per shipping day.
Also during the quarter, the company reported a consolidated net loss of $2.3 million or 22 cents per share compared with net income of $593,000, or 6 cents per share during the prior year quarter.
Its consolidated operating loss totaled $2.7 million, or 2.5% of net sales compared to operating income of $340,000, or .4% of net sales in the year-earlier period.
Charges the company recorded in the fourth quarter totaled $3.1 million. This included:
+ $1.3 million in end-of-life inventory write-downs related to the planned exit of its Savanah facility
+ $878,000 non-cash tradename impairment charges in the Home Meridian segment
+ $718,000 in bad debt expense due to a large customer bankruptcy (in addition to the $2.4 million recorded in the third quarter), and
+ $199,000 in severance costs related to company’s previously announced cost reduction plan
For the full year, it reported total consolidated net sales of $397.5 million, which was down 8.3% from $433.2 million the prior fiscal year. It noted that all three reportable segments of the business had sales decreases that were “driven by weak demand, a depressed housing market and broader macroeconomic uncertainties impacting nearly the entire home furnishings industry.”
Its consolidated net loss of $12.5 million, or $1.19 per share compared with net income of $9.9 million, or .91 cents per share the prior year.
For the full year, it also reported a consolidated operating loss of $18.1 million, or 4.6% of net sales compared with operating income of $12.4 million, or 2.9% of net sales a year earlier.
During the full fiscal year, it reported charges of $10.8 million that included:
+ $4.9 million in restructuring costs related to its initial cost reduction plan
+ $3.1 million in bad debt expense from a major customer’s bankruptcy, and
+ A $2.8 million non-cash tradename impairment
Despite the losses, the company reported fiscal 2025 milestones including a “Margaritaville licensing agreement, the launch of Hooker Branded’s new merchandising strategy, Sunset West’s bi-coastal expansion, key inventory investments and share gains amid a tough market.”
It reported year-over-year market share growth of 3 to 15 basis points during “each of the first three quarters of fiscal 2025 in Hooker’s Legacy divisions with fourth quarter data still pending, building on a consistent trend of sequential market share gains in every quarter of fiscal 2024.”
“Excluding these charges, our financial performance improved sequentially each quarter throughout the year,” said Jeremy R. Hoff, chief executive officer. “Even considering the extra week, Hooker Branded and Home Meridian sales increased.”
“We gained market share at Hooker Legacy in every quarter of fiscal 2025 through the third quarter, according to independent industry analysis,” Hoff added. “Fourth quarter data is not yet available, but we believe the trend will continue. This consistent share growth, despite a contracting high-end segment, reinforces the competitive advantages we’ve built and our readiness to capitalize when demand rebounds.”
“While macroeconomic headwinds—including a weak housing market, lower consumer confidence and tariff uncertainty—persist, we remain focused on what we can control. We’ve accelerated cost reduction initiatives which we believe will improve operating income and cash flow.”
“These include the planned exit of our Savannah warehouse which is expected to save $4.0–$5.7 million annually beginning in fiscal 2027,” he said.
He added that the company is also opening a new leased facility in Vietnam this May.
“When fully operational, we believe the Vietnam warehouse will reduce domestic safety stock needs, improve product flow, enable container mixing, and support margin expansion while enabling a speedier return on investment,” Hoff noted. “Combined with other efforts, we expect to begin to realize a portion of our expected $18 to $20 million in annual operating expense savings by mid-year fiscal 2026, with those benefits beginning in the second half of the current fiscal year, with full annualized expected cost savings to be realized beginning in fiscal 2027.
“Our actions reflect a disciplined, results-driven strategy to deliver long-term shareholder value.”
By segment the company reported the following results:
In its Hooker Branded segment, it reported fourth quarter net sales of $41.4 million, up 10%, from $37.7 million in the prior year quarter, which was driven by a 14% increase in unit volume. While operating income of $1.1 million was down from $3.5 million a year ago, the company said it improved from losses in earlier fiscal 2025 quarters. For fiscal 2025, net sales in the segment totaled $146.5 million, down 6.5% from $156.6 million. The company said this was because of a 5.7% drop in average selling prices and increased discounting, partially offset by a 2.9% rise in volume. It added that fourth quarter orders rose 15% year-over-year, reversing the trend of three quarters of decreases, while year-end backlog fell 22% but remained 9% above pre-pandemic fiscal 2020 levels. “Our backlog drop was mostly driven by a significantly higher in-stock position vs. a year ago, which led to quicker shipping.”
In the Home Meridian segment, it reported fourth quarter sales of $35.3 million, up 21.7% from $29 million the same period a year earlier. This was driven by strong hospitality sales “offsetting softness in traditional channels.” It said that gross profit for the quarter rose $2.4 million to $8.1 million, “with gross margin reaching 22.9% — the highest since 2016 — despite a $618,000 inventory write-down tied to the Savannah Warehouse exit.” The segment also reported a $500,000 operating loss in the fourth quarter of fiscal 2025, down from $997,000 the same period last year, “reflecting $2.2 million in the following charges: $618,000 (inventory), $718,000 (bad debt), and $878,000 (tradename impairment).” Fiscal 2025 net sales totaled $130.8 million, down 8.9% from $143.5 million a year earlier, related to a 29.9% drop in volume, “with 78% of the decrease tied to the previously announced exit of unprofitable lines. Orders and backlog also decreased amid continued pressure in mega and traditional channels.”
In the Domestic Upholstery segment, fourth quarter net sales totaled $26.3 million, down 7% from $28.3 million a year earlier which the company said was because of “soft demand across HF Custom, Bradington-Young, and Shenandoah, and seasonal softness at Sunset West.” Fiscal 2025 net sales totaled $114.2 million, down 9.9% from $126.8 million in FY 2024. The division experienced “decreases across most divisions, partly offset by a 6.8% increase at Sunset West.” The company said the segment also had a $2.5 million fourth quarter operating loss, compared with $1.6 million a year earlier that was driven by “lower volume, under-absorbed overhead, and $80,000 in severance costs. Fourth quarter orders rose 13% versus the prior year period, with double-digit growth at Bradington-Young, HF Custom, and Sunset West. Sunset West has now posted four consecutive quarters of order growth, driven by East Coast distribution expansion. Year-end backlog was 4% below last year but 3% above pre-pandemic levels when excluding Sunset West.”
Other highlights of the report were as follows:
+ Cash and cash equivalents totaled $6.3 million, down $36.9 million from the previous year-end. The company said the decrease was largely because of “an increase in accounts receivable and a planned increase in inventory levels, with Hooker Branded accounting for $12.6 million of the inventory increase.”
+ Additionally, the company utilized its cash reserves for several key expenditures during fiscal 2025 including cash dividends to shareholders, development of its cloud-based ERP system and capital expenditures.
+ Despite these outflows, the company said, it “maintained its financial flexibility with $41 million in available borrowing capacity under its new Amended and Restated Loan Agreement as of the end of fiscal 2025.”
+ The company reported cash and cash equivalents of $19 million, with $41 million in unborrowed capacity as of April 16.
“We strategically increased inventory in the fourth quarter to support three major new case goods collections and replenish our most profitable, high-velocity items,” said Earl Armstrong, chief financial officer. “This positioned us to improve product availability and speed to market in the fourth quarter of fiscal 2025 and early fiscal 2026, while also mitigating expected supply disruptions from potential port strikes in the U.S. and an extended Lunar New Year in Vietnam.”
“We also refinanced our credit facility in the fourth quarter, which increased our borrowing capacity,” Armstrong added. “In March, we announced our regular quarterly dividend, reflecting our ongoing confidence in the company’s outlook and extending our over 50-year track record of uninterrupted dividend payments.”
