by Q2 net income bolstered by tariff refunds, prior cost-cutting measures
MARTINSVILLE, Va. — Tariff refunds combined with prior cost-cutting measures helped boost net income at Hooker Furnishings, resulting in its third consecutive quarter of profitability for its second quarter ended Aug. 2.
The company reported net income of $1.7 million, or 16 cents per share, compared with a loss of $3.3 million, or 31 cents per share, the same period last year.
The company said it received $7.9 million in tariff refunds during the quarter and of this amount, its continuing operations recorded $4.3 million as a reduction in cost of sales and $200,000 in related interest income which it said was offset by about $500,000 in customer credits that were recorded as a reduction of revenue.
It also noted that its discontinued operations recognized about $1 million of net pre-tax benefit, adding that about $1.8 million of tariff refunds had not yet impacted cost of sales, and was recorded as a reduction in inventory-carrying values at quarter end. It said it does not expect to receive much more in additional tariff refunds.
“The significant costs we incurred due to the IEEPA tariffs significantly and adversely affected our prior-year results, and we are grateful to have recovered some of those costs in our fiscal 2027 second quarter,” said Jeremy Hoff, chief executive officer. “The substantial administrative burden these tariffs placed on our team over many months cannot be recovered. In addition to the tariffs paid, we incurred incremental costs associated with the IEEPA tariffs, including increased customs bond costs, legal and professional fees, financing and working-capital costs, and other administrative and supply-chain-related expenses.”
“Although we do not believe that the tariff recoveries make us whole for the significant costs incurred by us in fiscal 2026, I am grateful to the Hooker team for their persistence and extraordinary effort in navigating an unprecedented and highly complex environment and ultimately securing these recoveries for our shareholders,” he added. “We are also deeply appreciative of the commitment and partnership of our suppliers and customers as we navigated this period of extraordinary uncertainty for our industry.”
He also noted that the quarterly results benefited from the sustained impact of about $17.5 million in annual fixed cost reductions made across its operations last year.
“We are encouraged to report $1.7 million in consolidated net income for the quarter, marking our third consecutive quarter of profitability and a $4.9 million improvement over the prior-year second quarter,” he said. “These results were achieved despite a challenging demand environment characterized by continued weakness in housing activity, low consumer confidence and lower seasonal demand we typically experience in the first half of our fiscal year.”
During the first quarter, sales were down 8.7%, from $69.2 million to $63.3 million. It reported $1.3 million in operating income, compared to an operating loss of $510,000 the same period last year. Gross profit was $20.1 million, or 32% of sales, compared with $17.2 million, or 24.9% of sales, the same period last year.
For the full first half, it reported $132.7 million in net sales, down 5.5% from $140.4 million last year. Net income was $2.7 million, or 25 cents per share, compared with a loss of $6.3 million, or 60 cents per share, last year.
Operating income for the first half was $2.9 million compared with an operating loss of just over $1 million last year, and gross profit was $40.7 million, or 30.7% of sales, compared with $35.2 million, or 25.1% of sales, last year.
For the full results including a breakdown of each segment of its business, click here.
