Hooker Furnishings NASDAQ: HOFT posted a profitable fiscal fourth quarter while reporting a full-year loss largely driven by non-cash impairment charges and restructuring activity, executives said on the company’s fiscal 2026 fourth quarter earnings call.
Fiscal 2026 ended Feb. 1, 2026, with the fourth quarter beginning Nov. 3, 2025, according to Senior Vice President and Chief Financial Officer Earl Armstrong. The company also completed the previously announced sale of the Pulaski Furniture and Samuel Lawrence Furniture case goods brands during the quarter, with those results reported as discontinued operations through the Dec. 12 closing date.
Fourth-quarter results: lower sales, positive operating income
Armstrong said consolidated net sales from continuing operations were $66.7 million in the fourth quarter, down $17.2 million, or about 21%, from the prior-year period. He attributed the decline in part to the quarter being “one week shorter than the prior year period,” which reduced net sales by about $5.5 million based on average daily sales.
He also cited softness in the company’s hospitality business “due to its project-based nature,” noting that several large prior-year projects did not recur. In addition, Armstrong said severe winter weather in January 2026 in “a significant part of the United States and in most of our largest markets” reduced quarterly net sales by an estimated $3 million to $4 million.
Despite the sales decline, Armstrong said the company reported operating income of $629,000 for the quarter. Segment operating results included:
- Hooker Branded: operating income of $1.2 million
- All other: operating income of $617,000
- Domestic upholstery: operating loss of $1.2 million
Armstrong highlighted that domestic upholstery “reduced its operating loss by more than half” versus a $2.5 million loss in the prior-year fourth quarter, even with fewer selling days and weather disruptions. Hooker Branded’s operating income was “consistent with the prior year period,” he said.
Net income from continuing operations for the quarter was $874,000, or $0.08 per diluted share. Discontinued operations recorded a net loss of $338,000, bringing consolidated net income to $536,000, or $0.05 per diluted share.
Full-year fiscal 2026: impairment charges and restructuring weighed on results
For fiscal 2026, Armstrong said net sales from continuing operations were $278.1 million, down $39.2 million, or 12.4%, compared with the prior year. The decline was “primarily driven by lower sales in the hospitality business within all other,” with additional pressure from the shorter fiscal year and winter weather.
While gross profit declined in dollars due to lower sales, Armstrong said gross margin improved by 180 basis points, reflecting margin improvements in the Hooker Branded and domestic upholstery segments.
Continuing operations reported an operating loss of $16.5 million for the year, which Armstrong said was primarily due to $15.6 million in non-cash intangible asset impairment charges recorded in the third quarter. He said those charges were “triggered by our stock price as of the end of the third quarter” and included:
- $14.5 million related to goodwill in the Sunset West division (domestic upholstery)
- $556,000 related to the Bradington-Young trade name (domestic upholstery)
- $558,000 related to the remaining HMI business (all other)
Armstrong also said continuing operations incurred about $2 million in restructuring costs, “primarily related to severance,” and to a lesser extent warehouse consolidation, tied to “completed cost reduction initiatives.” Net loss from continuing operations was $12.8 million, or $1.20 per diluted share.
Discontinued operations, which included about 10 months of activity during fiscal 2026, posted a pre-tax loss of $19 million. Armstrong said sales in those operations declined amid “ongoing macro pressures and tariff-related purchasing hesitancy,” particularly among large furniture retailers. He also detailed items within the discontinued-operations loss, including $3.9 million in restructuring costs (with $2.4 million tied to a Savannah warehouse exit), a $6.9 million loss from held-for-sale classifications, and $1 million in bad debt expense related to a customer bankruptcy.
Consolidated net loss for fiscal 2026 was $27 million, or $2.54 per diluted share.
Operational changes, cost cuts, and product initiatives
Chief Executive Officer Jeremy Hoff described fiscal 2026 as “incredibly transformative,” citing tariff disruption, the opening of a fulfillment warehouse in Asia, and the exit of two unprofitable divisions. Hoff said the company reduced fixed costs by about $26.3 million, or 25%, including approximately $17.5 million tied to continuing operations.
Hoff also said the company delivered “slight market share growth overall” and launched its Margaritaville line, which he called “the most impactful product launch in company history.” He said the company expects shipments for Margaritaville to begin in the second half of fiscal 2027, and later told analysts that commitments continued to rise from the “over 50 committed galleries” cited on the prior call.
Within domestic upholstery, Hoff and management discussed operational changes centered on Bradington-Young and Sam Moore. Hoff said the company is combining those businesses into “Hooker Custom Upholstery” as part of a broader “Collected Living” initiative. He said the effort is intended to create a more unified product and manufacturing approach, including frames that can cross between leather and fabric production.
Tariffs, liquidity, and capital return plans
On tariffs, Hoff said that after the company’s fiscal year-end, the U.S. Supreme Court ruled that certain tariffs imposed under the International Emergency Economic Powers Act were not authorized by statute. He said that in March 2026, the U.S. Court of International Trade directed U.S. Customs and Border Protection to implement a refund process for previously collected duties and that the company is “evaluating the potential recovery of these amounts.” When asked to quantify the potential rebate, management said it was “material” but declined to disclose an amount.
Armstrong provided balance sheet updates, saying that at fiscal year-end cash and cash equivalents were $1.1 million, down $5.2 million from the prior year. However, borrowings under the revolver decreased by $18.5 million to $3.6 million. Inventory fell by $17.5 million year over year to $48.7 million. Armstrong also said the company received about $5.5 million in cash proceeds from the discontinued-operations sale and had $62.8 million available in borrowing capacity under its amended and restated loan agreement at year-end, net of standby letters of credit. He added that as of the day before the call, the company had “over $12 million in cash on hand” and “$0 outstanding on our credit facility.”
On capital allocation, Armstrong said the board authorized a new share repurchase program under which the company intends to repurchase up to 5 million shares beginning in fiscal 2027. He also said the board “recalibrated the annual dividend to $0.46 per share,” beginning with the Dec. 31, 2025, dividend payment.
Outlook: cautious demand view, focus on efficiency
Looking ahead, Hoff said incoming orders in Hooker Branded and domestic upholstery have increased year over year for three consecutive quarters, adjusted for the extra week in the prior-year fourth quarter. Still, he described housing activity and consumer confidence as weak and cited the Department of Commerce’s February advanced monthly estimate showing retail sales for furniture and home furnishings down 5.6% from the prior year.
“We don't anticipate near-term meaningful improvement in conditions,” Hoff said, while adding that the company’s lower cost structure and streamlined portfolio could support improved results even if market conditions persist.
Hoff said the company expects to report fiscal 2027 first-quarter results in June.
About Hooker Furnishings NASDAQ: HOFT
Hooker Furnishings, formerly known as Hooker Furniture Corporation, is a designer, marketer and distributor of high-quality home furnishings. Headquartered in Martinsville, Virginia, the company offers a broad range of wood and upholstered furniture products across bedroom, dining, home office and accent categories. Its portfolio includes solid wood and engineered wood case goods, upholstered seating, accent tables and decorative accessories, reflecting styles that range from traditional to contemporary.
The company's operations are organized into three reportable segments: Domestic Wholesale, Retail and Logistics, and International.
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