Hooker Quarterly Sales and Income Struggle

  • Scott Peters
  • Sep 9, 2022
  • Hooker quarterly shipments rebounded as Asian factories began to resume normal schedules. Domestic upholstery division's backlog was five times pre-pandemic levels.

    Hooker Furnishing Corp rose 2.1% to $15.08 after the company said Asian factories resumed their normal production schedules and inventories flows improved on higher shipments from Asia. 

    Revenues in fiscal second quarter ending in July fell 5.9% to $152.9 million. 

    Consolidated net income for the quarter was $5.5 million or 46 cents a diluted share compared to $7.5 million or 62 cents a year ago. 

    The Hooker Branded segment’s net sales increased by $2.9 million or 5.8% and the Home Meridian segment’s net sales decreased by $28.3 million, or 32.4%.

    The Domestic Upholstery segment achieved the sixth consecutive quarter of double-digit sales gains, with net revenues increasing by $14.7 million, or 62%, as compared to the prior year quarter.

     

    Order Backlog

    Incoming orders declined in all three divisions of the company largely because of long lead times for shipments. 

    Hooker branded quarter-end backlog was at a comparable level to a year ago but was 21% lower than at fiscal 2022 year-end in January due to increased shipments during the quarter. 

    Hooker Branded backlog was still over four times higher than pre-pandemic levels in calendar 2019.

    Domestic Upholstery quarter-end backlog was stable compared to a year ago but 7.8% lower than at fiscal 2022 year-end in January as higher shipments reduced backlog. 

    Overall, the Domestic Upholstery backlog was five times pre-pandemic levels in calendar 2019.

    Home Meridian backlogs are at the same level in the similar period in 2019 but declined from the previous year largely because of the decline in sales and exit from the unprofitable Clubs channel business. 

    Cash & Inventories 

    Cash and cash equivalents fell to $11.7 million at the second quarter-end, down $57.7 million from a year ago due principally to a $56.1 million increase in inventory.

    During the fiscal second quarter, the company received $25 million in term loan proceeds to replenish cash used to make the Sunset West acquisition in the first quarter.

    At quarter end, inventories stood at $131.1 million, including the $34 million in transit.

     

    Dividend and Stock Buybacks

    During the quarter, the company purchased 68,000 shares at an average price of $16.59 a share under the share repurchase authorization. 

    Through September 7, 2022, the company has purchased a total of 362,000 shares at a total cost of $5.9 million.

    On September 7, 2022 the company declared a quarterly cash dividend of 20 cents a share payable on September 30, 2022 to shareholders of record on September 19, 2022.

    “While incoming orders are down, we have substantial backlogs to ship and we believe the reduction of incoming orders from retailers is temporary, and more a result of right-sizing their inventories than a significant decline in normalized consumer demand,” said Jeremy R. Hoff, chief executive officer.

     


Annual Returns

Company Ticker 2022 2021 2020
Hooker Furniture Corporation HOFT -37% -28% 25%

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