Hooker Furnishings Corporation reported a decline in financial performance for the second quarter of fiscal 2026, ending August 3, 2025. The company recorded net sales of $82.1 million, a decrease of 13.6% compared to $95.1 million in the same period last year. The gross profit also fell to $16.8 million from $20.9 million, resulting in a gross margin of 20.5%, down from 22.0%. The operating loss widened to $4.4 million from a loss of $3.1 million in the prior year, while the net loss for the quarter was $3.3 million, or $(0.31) per diluted share, compared to a net loss of $2.0 million, or $(0.19) per diluted share, in the same quarter last year.
The decline in sales was primarily driven by the Home Meridian segment, which experienced a significant drop of 44.5% in net sales, attributed to macroeconomic pressures and the loss of orders from a major customer that filed for bankruptcy. In contrast, the Hooker Branded and Domestic Upholstery segments showed modest recovery, with net sales increasing slightly. The company also reported restructuring costs of $2.0 million in the second quarter, which included severance and warehouse consolidation expenses.
Operationally, Hooker Furnishings is undergoing a multi-phase cost reduction strategy aimed at achieving approximately $25 million in annualized savings by fiscal year 2027. The company has already identified $10 million in expense reduction opportunities in fiscal 2025 and an additional $15 million in fiscal 2026. The restructuring efforts are expected to align the company's cost structure with current demand levels while positioning it for long-term recovery and growth.
In terms of cash flow, Hooker Furnishings generated $18.1 million from operating activities in the first half of fiscal 2026, a significant increase from $5.3 million in the prior year. This was driven by improved collections of trade accounts receivable and reductions in inventory levels. However, cash used in financing activities rose to $21.6 million, primarily due to repayments on the revolving credit facility. As of August 3, 2025, the company had $5.6 million in outstanding loans and $6.7 million in letters of credit, with $57.7 million of availability based on the current borrowing base.
Looking ahead, Hooker Furnishings remains focused on strategic growth initiatives, including the upcoming launch of a new collection with Margaritaville and expansion in the hospitality and contract channels. The company is also leveraging its new warehouse facility in Vietnam to enhance operational efficiency and reduce lead times. Despite the ongoing challenges in the home furnishings market, Hooker Furnishings is positioning itself to capitalize on future opportunities as market conditions improve.
About HOOKER FURNISHINGS Corp
Hooker Furnishings Corporation designs, markets, and imports residential, hospitality, and contract furniture, including casegoods, upholstered, leather, and outdoor products. Operating through segments like Hooker Branded, Home Meridian, and Domestic Upholstery, it serves retailers, interior designers, and commercial clients primarily in the U.S. The company emphasizes design diversity, value, and supply chain diversification, leveraging imported and domestic manufacturing to deliver quality furnishings across various market segments.
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