Hooker Furnishings (HOFT) 6 Jun 242025 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Hooker Furnishings First Quarter 2025 Earnings Webcast. [Operator Instructions] Please be advised today's conference is being recorded. I would like to hand the conference over to your speaker today, Paul Huckfeldt, please go ahead.

Thank you, Kevin. to for conference quarter, the April XXXX. welcome our to which and XX, results financial fiscal morning, our call quarterly review ended Good XXXX first

Officer. is our Joining today. Jeremy this your participation morning Chief me Executive We appreciate Hoff,

first XXXX may of contained of today's and fiscal reflect During discussion materially filing results. Any which are uncertainties. undertake that from forward-looking obligation to in differ as could our announcing release cause management's circumstances or forward-looking subject call. our make statements, is risks our to to only press speaks SEC quarter we reported forward-looking today, no after statement call, and morning, events or results statements expectations we and This revise we factors to update The our actual any which furnishings of net due lower of industry. X million of for decrease year's product $XX the million fiscal XX% of accounted first which to XXXX segments XX% reporting from sales revenue home $XX.X consolidated we experienced first of fiscal to last quarter, Notably, the as Accentrics line, the demand decreases XXXX compared for home a is or furnishings, million in absence quarter. All exited sales $X.X approximately consolidated the for during much the decrease. adversely affecting Home sales

per share. $X.X a net and diluted million loss quarter, the of million consolidated recorded we or $X.X loss For $X.XX operating a of

the and Xnd a to fiscal and look while XXXX and spending uncertainty, we and at macroeconomic current to structure, taking quarter. plans cost profitable reduction finalize fixed the the expect hard cost expect our in implement year Given fiscal be for beyond, we're we current our

come of and in a fixed combination the to a of to cost expect second cost consolidation The of reductions. other are savings half XXXX. XX% realize We expected fixed certain costs fiscal operations from in beginning reduction the

quarter the fiscal on over XXXX Jeremy results. comment to the Now I'll to call turn first

months, industry-wide Year-over-year Census compared U.S. year the everyone. have the morning, prior month good and reported Paul, same to consecutive sales U.S. furniture you, Thank as XX by store for Bureau. fallen

was which persisted. as quarter first disappointing industry-wide Our last began weak year the demand,

we rare each believe almost and operating the the a once driven was sales quarter, segment, to loss entirely to in rebound. profitability we'll revenue by we are While loss reductions demand return disappointed report this strongly and

Although there that are in confident pursuing we merchandising the operations, and may some be marketing short-term volatility strategies we remain transformative. in are earnings,

to product expanding in Despite our environment, recalibrate Times our will like our reinvent and business. our XXX% current to and help brands, Already, we've in from aspects market strategic legacy opportunity customer nearly new the a take showrooms base expanded addressable these visibility investments initiatives share. We our believe present our footprints. to great. flagship us through increase Hooker of see on tremendous and seen and our potential upside an even gain traffic we focus good showroom lines

industry together was at Hipple of addition is The High sales is Point pull the significant credibility Her the the powerful. Officer retailers, Caroline for market. our recent and her position designers of to well Creative extremely received Chief collaboration representatives in and ability new people by to

in future XX-year outdoor As the I've collaborative which our case leads is a my worked well industry. direct lighting, across team, why brands the confident this and part executive furnishings approach She upholstery in that make so our she career most accents. the with of growth. People merchandising we're goods, always team, in leadership integrates difference, as and will accessories as talented

become home and forward-facing in we a presentation. style, line materials, into aesthetics, product direction bring alignment consumer resource can our whole a and we more As the divisions and move inspired by forward creative full in same color trends offering

align to has also environment cost a footprint mentioned expected demand strategic current realignment medium-term Paul earlier, operations. and As of adjustments our with the current necessitated through to

quarter, finalizing and sometime in plans to While we're next in our in the projections more information largest cost, expect history. show have current overall a our cut fixed those the still XX% reduction

consolidating operations into normalizes. reducing initiatives, we impact further focused a the footprint, appropriate significant our warehouse on on have Hooker our will Branded, and not fixed while impact actions intensely Planned additional which reductions. certain consolidating positive Hooker and creating We're once structure demand believe Georgia expense BOBO include pace of an cost other strategic jeopardizing

the expect beyond. current We and in fiscal year to profitable be

discussion I to Paul, to Now highlights of who want the discuss segments. over turn each our will in

decreased decline Xst soft was the million XX% a primarily Hooker ocean Branded a response the quarter in quarter. price Net extent, from decreased lower to late to year prior the prices, resulting compared due led incoming lesser to a to backlog to XXXX XX% decrease compared the quarter. implemented pre-pandemic in during freight prior furnishing the remains costs. XX% of segment. end. industry year reductions levels and $X first The average last unit to with XX% year end Beginning higher or quarter, with Jeremy. decrease selling demand sales Thanks, across backlog Quarter-end This lower home the fiscal than orders corresponding in volume at

decline XX% in after revenue liquidation At of absence of quarter. first attributed half by last Meridian, net sales year. the million segment business sales the Home $XX that decreased was to Home Nearly exiting Accentrics the or

Excluding The sales, industry by independent demand driven to to core and through about furniture stores, major lower XX% remaining sales quarter. and declined lower of the hospitality due decreases the anemic shipments. furniture chains due liquidation sales sales were timing in

decreased orders costs higher quarter-end $X than reorganization, included Georgia warehouse at in the during back X% redeploying quarter higher the with and East Lawrence XX% XX% The tripling. last than fiscal Hospitality our same XXXX space incoming first Samuel overhead backlog and orders positive was the period by which more West’'s to year January. more support year-end Coast expansion. by Sunset restructuring Incoming reduced were a million business On fixed from note, than

XX% due first sales to quarter East to its experienced new its previous the first distribution in year. past million at net stabilization the decreased attributed segment Upholstery Coast the expansion and Bradington-Young, to Domestic quarter, the West over by of compared volume contrast, In Shenandoah. Custom The year increase and sales the decreased to HF a ERP $X or Sunset system XX%

a Sunset in Additionally, saw and during X% incoming orders West increase May. the in quarter XX%

needed of positive out Sunset trajectory bumps West now experienced building West For last resources onboarding much its going to Sunset hit system. beginning the stride the forward. of to is expand year, some of its new to distribution. And related We for computer the think the personnel speed

this the prior year compared quarter, the from but increased to for quarter segment decreased quarter-end orders end, fiscal incoming XXXX While by for X.X% the backlog increased year-end.

order Excluding Sunset was higher pre-pandemic backlog West, than XX% levels.

$XX stood equivalents first Reviewing our and inventory cash of the Cash of million million and fiscal end the a at XXXX. end positions. debt the decrease of quarter, cash at from $X.X

we ERP $X.X operating develop cash in to million and the hand and system dividends, capital generated During used $X.X to the on expenditures. activities our million $X.X fund first million quarter, further $XXX,XXX cloud from in cash

insurance our In the million addition surrender to cash end aggregate of year. revolver have company-owned under the of an the in value cash $XX.X outstanding at policies life existing balance, $XX.X and we million

and we protecting furniture capital quarterly on is a us the like invest balance but can which begin We an industry in weather XX-year-plus our demand initiatives. allocation to the organic the environment, see we the continuing dividends have conservative a sheet, understand believe until we caution ours. focused capital uncertainty while our preserving in industry strategy and history industry to general our for of growth in Given current also help economy, need the short-term turnaround cyclical

to Jeremy back his turn Now for call I'll the outlook.

Thank mid-May. under in leading inflation market remain Paul. X% indicators to Economic in with unemployment record April mixed a you, performance stock continuing easing and slightly

fell a Consumer steady deterioration levels. after May for optimism in XX% Sentiment in age, indicating Index income holding and the However, across education months,

believe furnishings April, Additionally, levels. therefore, decreased home by the stagnant remain sales cut interest in existing housing pre-COVID Reserve inventories will supply driven below housing low interest are believe we housing are home and Federal of moves we March the well ongoing both and demand Until industry rates to home the subdued. sales rates, and as year-over-year,

returns year of and continue the company the and believe comprehensive are we improvements the include occurs. when the well orders with as to to as process through the We be quarter. to of we Home upturn higher by to economy profitability goal with and and Examples and up past Legacy will backlog and along strategy we sustainable merchandising in our fiscal Compared transformative as investments made is well plan consolidated believe fundamentals to springboard solid ultimate levels, segment of normal consolidated with our demand approach orders to from every sales when Meridian an the profitability. refinement across will positioned, these repositioning investments brands. Since the improvements it industry-wide of demand a benefit continued up confidence in year-end launch XX% the in quarter, to we is increased XX%, January, late consumer approximately across previous of first Hooker compared our many the

This encouraged part discussion. are increases. by these our We formal the ends of

time, call back will for I to this over questions. at And turn our the operator, Kevin,

[Operator Instructions]

& Our from Lebiedzinski Company. with first Sidoti Anthony question comes

ask coming -- So of first. forward-looking of I'll just I more guess, off a first, question,

timing the call. your of given So

Memorial long So Day not that happened just ago.

a Day as has big hearing of sales, for you're in from Memorial buying. to or curious what retail traditionally partners from your seeing Just terms furniture holiday been which

Yes. Anthony.

wouldn't I but back describe which how partners, it. better call what retail sentiment, our of been, seems I it's from been comments to than it it's it positive fairly type like tough a is little So would normal has

All hear. to good That's Okay. right.

the the as you So we trajectory Caroline how Sunset in it's help is plans addition design that -- of you well. But top, of forward? talked as environment your or difficult initiatives, about talent But which as previously thinking doing previously of the growth those now new Hipple, a expanding initiatives of some overall, interior has timing the about guess, in just like those? understand of some sales, growth of far at change brand the obviously, Jeremy, us thinking, particular you West, the added some magnitude e-commerce, growth and know are terms announced of the going terms also I now. I with know looks maybe these of

in a means. right the coming weeks. slowdown will like we're and But Well, to position now, exactly initiatives, specifically trajectory changes working of that that in those on more type we're any on now, answer for some be that you the tell of what I'll little a I in

you. Okay. Got

you you amount as Okay. terms can those half? we cost in speak by costs think that should quarter reduction progression our quarterly Is I the second financial the about, at how cost up specific dollar there the are these far in we look that involved of as of a reductions then, And plans guess, to talked about as models?

looking at we're basis, rate about XX%. run a On

million. expect Our fixed we $XXX that rate be say run reduction. there'll It's about to timing-wise, would -- quarter, the fourth a the overhead that. around will basis, is and cost we the on And some of be happen second part quarter, I in -- realize better million a should but third $XX

the the probably of million remainder the fourth and I for $X year, quarters. evenly third mostly think between split

very to That's on pass And guess, I helpful, quick Paul. I Okay. questions guess for here, I X others. other then me before

So done Jeremy, segment? are lot certainly, what a know longer but improve term to thinking with you you've HMI this strategically, I

the trying stand business create be for that business feel said, Well, the Samuel take think, as believe, more And very I and got in from mentioned, XX% right. support I've -- been and in our brands, of as first of division current we overseas the Paul we're do of down, quarter. We've you PRI first things our is. all that's to believe, to and focused, we with, should hospitality where I all, core course, of Pulaski, a Lawrence, warehousing. the the lot out that closeouts on being be we really a line if what then, We've were whether number and industry structure a you're

bottom we have optimistic for able we that really right chance get think direction. correct in new we products, So to we're that and us a line. with be a growth it's to cost on headed the structure give been successful be we've really really the going to think is And placements and on really the

you. Got

in Okay. your million last just And at $XX.X of debt the debt. portion All sheet, current you have looking question, right. of your guys the balance

about this? thoughts you that? to expect what Or are are thinking how refinance Do your So you there?

-- I current of anyway, missed we've out the debt come is the of Well, the to covenants. -- it's Q it we going our but operating mean because missed in loss, one

credit current. as sure accounting working that fully to that's do we're going that expect report So how technically, bank, We're we're the require that not while we're us We've exactly looking is us, to fully options expect yet. revise the bank to We working and got rules agreement. with with several that we -- at.

we expect presentation in the little we'll to $X over of remainder to compliance $X in million And shift so in about and back million next back back the noncurrent be starting and current a -- quarter. former

question Stonegate. Our next from comes Storms with David

touch pricing same capitulate quarter of it's are with the macro there on overall, How to volumes Is the looks pricing still to as and little pricing backdrop? like kind wanted pressure on up. Just the last pricing. bit? and given volumes the comfortable story being driver holding you with a It any

we're believe in position No. is where a really brands. issue We our pricing an our across don't

the demand significant It's a happen. normalize at we're to just to need consumer that for we believe we fact, pretty In order in value.

discounting that discounting just don't pulling but necessarily way And demand -- drive normal typically do the significant think we we demand is to Yes. discounting, without forward.

Correct.

in And the typical we helpful. macro a anything may you backdrop, Very seeing then should wrench throw trends? those that still with current are typical year? trends the Understood. for Or seasonal expect

us now, normal until year expecting shows we're the Right seasonal throughout differently. that the the economic industry trends say I or some would environment

really Very early last great orders? you still about? showrooms. see seems that consistently to to How traffic thinking be helpful. to from too one tracking foot is on of And then transition the traffic are Or the foot just it kind to increasing. be It's

the because X question exposure was about. good like visibility talked we've getting step really a It's

Our entire about. conversion, now you're is and focus it's asking right on what

we're of the to our and conversion lot potential we seen, be key we or a growth, going initiative. but there's trying do a that, execution that our on ways is So seen what focused many as that are to big customers to that's believe, we've on highly customers

with Bugatch Our next Budd question comes WTR. from

if misinterpreted be about to looking the -- of the $XX.X read above it, end the I that way want at right the XX% sure first overall that the the I The release. to make just backlog. year, it? way I in quarter, hadn't the at gets language backlog of end at Is to calculate million

Budd. correct, That's

when release the Okay. segment we'll get you the And numbers Q?

Yes.

I want necessarily you to quarter at last versus understand heard. numbers said is comport with I order And -- and year's What I first book was change? make for How the comparisons the the quarter? that for sure year the last don't again, because versus order looking first the I'm what book percentage order the

Orders -- incoming orders were down X%.

X%.

Yes.

year you Okay. to the that -- us... you returns the profitable that's hope on expect We correct. said All right. that hazard -- And operating to be for to for profitability the afterwards, certainly any and years when obviously, I for or line and

in There's term. some part call mentioned I shorter volatility, my as of in the the

better in feel So our do second we right definitely about half than first now we half. the

was year quarter revenue, Yes. correct? a overall that second $XX.X Is And right? last the million

right. was That

That's correct.

had incoming if up year-over-year Do orders you you up? you'll be think

to I this at don't point. think that we're say in a position

early the little A quarter. in

Yes.

-- So okay.

appreciate luck and the on challenged understand is good I I the year. understand. right that, And industry now. I So

that. I appreciate

like turn for call [Operator I'm at not back any further Instructions] closing this I'd showing to remarks. any questions Hoff to Jeremy the over time.

quarter I to fiscal Hooker second forward for on everyone would our to 'XX look Take the like We September. thank care. in in their call results interest Furnishings. sharing

does and conclude that presentation. today's Ladies gentlemen,

day. wonderful a have and disconnect, now may You