Hooker Furnishings Reports 14.4% Decline in Q3 Sales, Plans Brand Divestiture

Hooker Furnishings Corporation reported a significant decline in financial performance for the third quarter of fiscal 2026, ending November 2, 2025. The company recorded net sales of $70.7 million, a decrease of 14.4% from $82.7 million in the same period last year. The decline was primarily attributed to lower sales in the hospitality sector, where several large projects were shipped in the prior-year quarter. The company also reported a net loss of $21.2 million, or $(1.99) per diluted share, compared to a loss of $4.1 million, or $(0.39) per diluted share, in the previous year.

In addition to the drop in sales, Hooker Furnishings faced substantial impairment charges totaling $15.6 million, primarily related to goodwill and intangible assets within its Domestic Upholstery segment. This contributed to an operating loss of $16.3 million for the quarter, compared to an operating loss of $5.1 million in the prior year. The gross profit margin improved slightly to 25.6% from 24.8% year-over-year, driven by better margins in the Hooker Branded segment, which saw a 1.1% increase in net sales.

The company has initiated a strategic shift by entering into an Asset Purchase Agreement to sell its Pulaski Furniture and Samuel Lawrence casegoods brands, which have been classified as discontinued operations. This decision was made as these brands no longer aligned with the company's long-term strategy, and their sales had been adversely affected by macroeconomic conditions. The sale is expected to close by mid-December 2025, and the company anticipates that this divestiture will allow it to focus on its core brands and improve profitability.

Operationally, Hooker Furnishings reported a decrease in its backlog of unshipped orders, which fell to $32.7 million, down 10.3% from the fiscal year-end and 23.8% from the prior year. However, incoming orders for the Hooker Branded and Domestic Upholstery segments have shown positive trends, increasing year-over-year for two consecutive quarters. The company has also successfully implemented cost-reduction initiatives, exceeding its initial goal of reducing fixed costs by approximately $25 million.

Looking ahead, Hooker Furnishings remains cautious about the macroeconomic environment, which continues to present challenges such as elevated housing prices and inflation. However, the company believes that with a more efficient cost structure and a sharper focus on its core businesses, it is better positioned to drive organic growth and achieve sustainable profitability in the long term.