Hooker Furnishings Reports 8.8% Sales Decline and $3.1 Million Net Loss in Q1 Fiscal 2026

Hooker Furnishings Corporation reported its financial results for the first quarter of fiscal 2026, ending May 4, 2025, revealing a consolidated net sales figure of $85.3 million, a decrease of 8.8% from $93.6 million in the same period last year. The decline was primarily attributed to significant challenges in the Home Meridian segment, which saw a 28.8% drop in sales, largely due to reduced demand and the loss of a major customer. Despite the decrease in sales, the company managed to improve its gross profit margin, which increased by 180 basis points to 22.3%, driven by higher margins in the Home Meridian and Domestic Upholstery segments.

The company reported a net loss of $3.1 million, or $(0.29) per diluted share, an improvement from a net loss of $4.1 million, or $(0.39) per diluted share, in the prior year. This reduction in loss was supported by cost reduction initiatives that led to a $2.2 million decrease in operating expenses compared to the previous year. The operating loss for the quarter was $3.6 million, a reduction of $1.6 million from the prior year, reflecting the effectiveness of the company's restructuring efforts.

In terms of operational developments, Hooker Furnishings has been implementing a multi-phase cost reduction strategy aimed at achieving approximately $25 million in annualized savings by fiscal year 2027. The first phase, which focused on reducing fixed costs, has already yielded over $10 million in savings. The company is also consolidating logistics and operations, including the closure of its Savannah warehouse and the opening of a new facility in Vietnam to enhance supply chain efficiency.

The company’s cash flow from operating activities significantly improved, totaling $14.7 million for the quarter, compared to $1.5 million in the same period last year. This increase was driven by better collections of trade receivables and inventory optimization efforts. As of May 4, 2025, Hooker Furnishings had $18.0 million in cash and cash equivalents, a notable increase from $6.3 million at the end of the previous quarter. The company also declared a quarterly cash dividend of $0.23 per share, reflecting its commitment to returning value to shareholders despite the ongoing challenges in the market.

Looking ahead, Hooker Furnishings remains focused on product innovation and operational excellence to navigate the current economic landscape. The company is optimistic about its strategic initiatives, including the launch of a new Margaritaville licensing program and enhancements to its digital presence, which are expected to drive long-term shareholder value as market conditions improve. However, the company acknowledges the ongoing macroeconomic pressures, including sluggish housing market conditions and consumer sentiment challenges, which may continue to impact its performance in the near term.