Hooker Furnishings (HOFT) 5 Dec 242025 Q3 Earnings call transcript

Good day. Thank you for standing by. Welcome to the Hooker Furnishings Corporation Third Quarter 2024 (sic) [ 2025 ] Earnings Webcast. [Operator Instructions]

Please be advised that today's conference is being recorded. the Chief to Financial hand today, speaker now Huckfeldt, Paul Officer. will conference your over host I Please go ahead, sir.

fiscal financial Thank you, conference for began our quarterly and ended to welcome quarter, October the July results XX, XX Olivia. Good call morning, to and XXXX which third XXXX. our review

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

results uncertainties. SEC could we filing which management's to or today's call. contained announcing are and risks forward-looking actual third statements and statements, cause or from may that our of undertake subject factors circumstances forward-looking only A differ after make call, we of forward-looking quarter expectations our in events update results. statement During today, fiscal reflect release as discussion materially our Any revise XXXX to our and to obligation is no any speaks to press

Our $X.XX to $X furnishings Meridian the a a consolidated charges million million fiscal under the $X.X debt names and of announced the demand diluted and million resulted loss by in loss bad customer per $X.X quarter These including to share quarter. to million, restructuring low impairment in in charges net bankruptcy $X.X factors million single savings Home plan. large certain segment. results cost as previously of of of the and affected expense or million trade noncash the third an of operating adversely approximately of industry costs X-month were XXXX related about $X.X third related the company's well home ongoing $X.X totaling as

of previous to of $XX.X the year. a Consolidated net same or million decrease sales XX.X% were million, compared the quarter $XXX

year. from unprofitable a $XX absence furnishing consolidated affecting which decrease liquidation and compared sales was last This million the demand of $XXX or ACH decrease previous company home was the period same the X-month line, XX.X% net of due also the $XX low exited sales the of For to of period, to the industry million product million, the year.

of loss to million well $X.XX loss overall the costs per earlier. $XX.X The Branded, of company share at attributed as sales, million $X.X higher a Domestic million costs net at $XX absorbed indirect and Upholstery lower under operating as in charges a reported or ocean freight Hooker consolidated diluted mentioned

turn I'll Jeremy quarter over -- third our comment results. XXXX results Now, the the to call fiscal to on

Thank difficult opportunities, the recently cost furnishings. while in quarterly are everyone. addressable global should Paul, demand Margaritaville. in increase macroeconomic investing for November, agreement nonstrategic and cuts environments the we such sequential our costs more Despite and reduction September also macroeconomic with We're our improvements charges the encouraged environment in business focus licensing team's in beginning including morning, and initiatives cooling begin and reducing good expand which to recent a which interest results market sustained our controllables of challenges will in by on inflation growth our realized efforts and improvement reflect to the and in our recorded rate impactful quarter. by by encouraged announced and be developments as managing core you, profitability These QX, fourth fully positive

introductions Our placements across the Market significant positively October with received were High Point board.

Hooker to we initial to major X date furniture West. best confidence the gigs place gave of In placement before case early were these introduced groups had in retail addition, Sunset October. Branded The feedback market cuttings the for early at specialist us officially outdoor collections

quarter position cutting million with fiscal anticipation In end. month or puts built collections inventory a increasing for fall in As and up speed us market to a Hooker typically this will season, coming result, we second selling ship to our This our January, year strong by increased $XX X Branded in the previous the product months. demand assortment. available the by with of XX% stronger compared a

top we on addition, during our the most in will profitable SKUs. best-selling we 'XX. and ensure first stock centered are quarter are be our collections These to aggressively assortments inventories producing high-quality In of fiscal

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

Beginning Jeremy. Branded. to prices. due $X sales prior Net decreased in XX.X% Thanks, by Hooker average the the year quarter, compared period, selling million fiscal third with primarily or to lower

basis the points, gross year's While decreased segment increased by to in discount to inventory. X.X% compared discounting quarter, on higher previous excess due revenue by this mainly third XXX

by this to first of and Unit a previous the year. quarter, exceeded modest X.X% compared volume decreased fiscal but quarters second the year's third

end segment third million low result $X of decreased $X.X quarter, year-over-year. For third were year's remained XX% to related loss The Incoming backlog reported was by end the end the reduction of but than orders at of charges higher operating third XXXX XX% of the quarter The net fiscal result the quarter the sales. included prior approximately quarter. than pre-pandemic which cost severance lower historically levels, at an quarter, this our million XX% plan. on --

essentially or X-month For reductions primarily $XX the previous X% freight decreasing in ocean decreased the response XX.X%, period, prior implemented costs. million sales by to to the resulting lower about to period. price due net reduced from year average also compared Unit the volume by flat, X-month selling year prices, was in

major by sales third Net Turning to a offset business, decreases in X our compared to of the higher quarter its consecutive the quarters furniture decrease sales hospitality X% major in an revenues. $X.X following independent Sales in Meridian attributable to though sales increase loss Over XX% decreased due third and marking volume. partially the quarter these of unit bankruptcy. XX.X% or customer reduced decreased the prior by million of segment. was the furniture to Home year through chains were stores

quarter, decreased to quarter discontinued Despite X% -- third was end absence by by orders while increased and of previous net third increased XX% quarter line for the decreasing higher at shown customer the efforts all nearly prior Home XXXX. net margins of backlog. bankruptcy. large sales improved despite the ACH XX.X%, meaningful the Home allowance, years orders Incoming segment. product over sustainable results across period and X-month backlog a from have year modestly level gross Meridian X.X% acquisition since year's compared the profitability, creating towards the The costs the fixed its this of lower Meridian the sales, product reduced restructuring achieved margin highest significantly including in than recent

bad an the of quarter, the bankruptcy. due the by million, segment to $X.X loss For in previously charges million mentioned reported $X.X customer driven debt operating

related intangible reduction cost $X noncash asset million to impairment and in the $XXX,XXX plan. costs of severance charges

XX% of volume $XX million decreased due ACH to decrease absence net period, for X-month million XX% in liquidation the the part For of sales by large which of XX% accounted unit decrease. in sales sales, and the the or $XX approximately

Sales in the the during except nearly experienced a decreased for business, hospitality channels period, XX% all which increase.

year due sales offset sales decrease net gross increase year. year-over-year quarterly in decreased $X.X at the Bradington-Young Sunset Lastly, million low to which compared demand. the margin prior fiscal Custom to the by lower but by decreased consecutive Upholstery a profit XX% Gross for remained partially sales the Domestic sales net quarter X West, X% this at was growth stable. to quarters sales, Shenandoah, This has delivered persistent decreased or to third due segment and HF attributable

the reported cost of first quarters. recorded in also related the in compared For of the $X.X plan. second of operating $XXX,XXX million included the These and each $XXX,XXX, to segment operating a fiscal XXXX loss approximately severance quarter, an the losses to costs results sequential improvement reduction

year the backlog orders prior XX% quarter the X.X% third quarter during end the decreased lower was Incoming by than quarter backlog. and

the fiscal Excluding Sunset West, prepandemic order the the third end XXXX quarter. remained consistent with backlog levels of at

period, by in million also West For a Bradington-Young, XX% Custom, increase sales or Sunset X-month net the decreased by sales. offset decreased at net $XX.X sales due partially HF and Shenandoah XX.X%, to

cash of increase decrease $XX.X at to now $X and previous year-end, Turning by Cash of $XX.X cash Hooker by levels driven million the million capital. from in a equivalents year-end and Branded increased the in million a Inventory end third inventories primarily from the January. million $X.X inventories. were quarter,

of cash further X-month the used and million dividends, and develop expenditures. During on capital system in cloud-based to we million our $X.X $X.X $X.X cash equivalents ERP hand million on period,

million had surrender at of as of revolver cash our value to balance, $XX.X existing our cash in under addition end million insurance. $XX life well In we company-owned as available quarter an aggregate

to coming days. expect the debt our of refinancing the finalize facility We credit in our term and off pay

current we're East U.S. expected Jeremy and to best-selling As Vietnam of aggressively port production be holiday holiday what mentioned, Lunar also holiday support XXXX. major the profitable most fiscal as speed Vietnam extended build ramp-up both is driven in period from next lower The casegoods the building year. resulting X accelerate and as Year well product expected post in New in new for strike demand and as by to well longer-than-typical inventory potential collections availability to our and market is longer January and inventory SKUs a Coast as

this announced Earlier of our confidence the in regular our December, company's we demonstrates week, future which believe the dividend we in quarterly success. payment

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

inflation. key been rate trending home as Over cooling impact have last interest mortgage the positively, few and months, sales the that indicators economic such rates cuts furniture drive which

rose And mortgage November, around forecast its an shortage inventory industry ending furniture XX% sales a October for group second increase belief with in in store the is estate approximately worst a XXXX stated home the real the in sales row. housing of forecast leading year-over-year the stabilizing Additionally, and and that X%. for month rates

since stock Lastly, near consumer to its sentiment highest all-time and rose market the April continues in November highs. level

Furnishings. outlook and on macroeconomic the is continued Hooker to team at controllables the has improving, our focus improvements underway already While

the and that over in us for simultaneously team our This And on formal and I time, as ends for maximizing Olivia, questions. back and remaining us our Our with focus expansion management condition the investing operator, balance fully demand navigate of revenue position cost should will equip growth while challenges returns. reductions call the part at sheet, turn we any financial discussion. strategies when this efficiencies will well to profitability to

Anthony Company. Sidoti the [Operator our question Lebiedzinski & Instructions] of coming And with from first line

hear now? me you Can

Yes.

Yes.

mute. I Sorry was about that, on

seen for So like changes first, They of about just talking in end It talked to the have election just distraction being customers? seems consumer. from you curious, the demand election, so industry. since guys others notable the your a in any sort the

thoughts get far? to you've seen your curious what So so on

Yes.

for sure. since election bump we've that noticeable order had So noticed rates we've positive a the in

of hear, then terms good certainly in collections. That's encouraging. new casegoods to the And

sorry, impactful market, speed You quarter those fourth products could that for How the be to get look you -- the that. as driving talked impact retailers? about certainly to I'm how to

it shot Hooker for position to in will part that that, shipments January, is affect putting gives it half entire fact Branded to benefit hitting first us full for because those at specifically of think more cutting definitely the cutting container But the the of collections next second at of significant first. year. in better we're fiscal customers ship some in floors not November, going a that direct Well, better to the year the and we're those the year gain I

That think you And you sense. improving right. you've there, margin at a thoughts can are further here? the nice gross All What Do your lot job makes from Jeremy? done HMI. of a improve

we would we most businesses out on the it's of ACH I the have a the low-margin improvement of to say which out that in that longer no stress, when money, like just drag losing was overall little bit. very takes positive been a should were the And compared to average we businesses we're fact not obviously average. business where simply had that, a getting of business,

for been for still improvement. do bit that's a benefit room We little of biggest there's think So the us.

you. Got

the And was inventories we inventory expected. your quarter at about situation third excess inventory the higher the here, than having talked you so far as of overall, as end so

year? how quality the describe current goal your position So sort would of you and any your inventory for end inventory fiscal inventory the that and your of of at

best position, X would been I probably in call the Paul, it's probably, our years. inventory

think I yes. so,

impacts the but drag And have that positive not Hooker ACH negatively something the as the entire say like some SKUs, not of which of side other we best I because side, of are well. inventory Branded inventory the the having only our on on that

inventory So have only within really our anymore system or -- the did we is problem the ACH. in increase we with SKUs. really don't We like good

know better is slow-moving up of we're and new I little a to -- rid talked We getting discounting, our doing in the best-selling into inventory inventory, Yes. sound excess free up inventories SKUs. products working to building talked inconsistent. might in about and capital invest cleaning stuff what We the and it SKUs

All makes right. Yes. lot sense. That a of

then to And it lastly Okay. before I for me pass others. on

in October. launch how guys? Margaritaville for could you be announced this I about details the you provide So Jeremy, to that I more Can you know very as when upbeat were believe, you deal impactful any

our be Margaritaville example. believe be to just it going to going not for to license It's it's thing, What's our a be the It's Hooker really going our really interesting lot about really divisions. is Hooker believe from affects that's divisions. contract very impactful. of we Well, affect to Branded a positively, we going standpoint Legacy,

There's and lot those us hospitality with whatnot. advantage because attached opportunity significant that homes jobs a of each an Margaritaville to a of will lot through pricing in a give and we'll is in areas that contract those models be with number of building

So lot would not a of be -- opens otherwise. there's it that just doors open

Storms the question line Dave next of from our coming Stonegate. And with

of to part see macro this into wanted demand discounting environment holiday around Is going the potential there year? through season. Just to question back any continued my this ask the first

bit repeat you line. on something static the Dave, of little Can or a there's that,

Apologies.

the Just any of for the up, into as the coming potential environment year? there is season continued around you the back and discounting holiday go macro quarter

any believe don't than normal. We more

Normal in it's -- yes, tend run targeted but specials, to normal promotions. promotions. the particular, we E-comm,

there write-off? there any that And to that highly just the then to Understood. recover you're is other at any touch And as recourse seeing risk? some customers bankruptcy. on Are wanted of

customer that's we a Well, customer only business we there you probably lot done of a We've mitigate is. or bankrupt. know there's And the can always And -- customer that's there's not what who loss. really that that big that recourse. big that -- small to here probably

particularly a pace that receivables. just the was -- noticed one But it bankruptcies in customer, caught. haven't big was of change that really a distressed got significant or We we was and

was look like deal. amount wins looks did little could decent speak then of a you I for around this you Understood. It logistics space the And steps. early I what would have next a question maybe licensing And another the around and white like? hoping is more all.

is launch April, The move but in you're get mentioning for fast to Yes. be the is reason to course to want and temptation And we're try and going more and is this that launch than that's what of us in ride much October. faster ride. we to going important to

right a logistics obviously of So pulling now from company are our the West, everything is together Sunset involved. heavily outdoor that

All is Hooker of Domestic Upholstery is hospitality. our involved, Branded contract involved, involved,

pulling the to needs foot everything biggest pulled way best we're working the a together thing put be now, on right So is forward to on our order -- it launch. together make to in

until -- and So there. that get will continue we

quarter That's very into And we the helpful. cost further any evenly Or cost to those we to we weighted spread expect out? And in would savings then more back-end just looking million XQ? costs one next ramp? be last should question savings. be as for then severance year, that $XX me, around X expect expect Should the

still significant place is But expect I it element, be that would this most going we one point the costs. don't say program of additional to need year. don't additional our we more cost We that to better significant the reasonably We've of of part got -- at in for one expect large elements anyway, more savings restructuring execute.

savings We of -- a started we be would haven't spread those And year. fourth to will but say through we realized million really the of lot that $XX yet, start most next fully the haven't evenly seeing quarter. expect in those I

this at now Jeremy time. Mr. the remarks. no any showing Q&A back for turn over call to further I am questions the queue I closing in And will Hoff

'XX season. Take like in to forward in to all happy call sharing next Furnishings their wish care. We our Hooker April look everyone a year. year would results the thank I for fiscal full and on you holiday interest

for today. disconnect. that you Thank conclude you now and participation, your may Ladies conference our for does gentlemen, and