Hooker Furniture Corporation (NASDAQ: HOFT) disclosed its first-quarter fiscal year 2026 financial outcomes, with revenues at $85.3 million and an operating loss of $3.6 million, alongside an adjusted EPS of ($0.29), slightly underperforming against consensus estimates. The 8.8% year-over-year revenue drop is largely due to decreased volumes and tariff impacts on the HMI segment. Despite these hurdles, the company saw a consolidated GPM increase to 22.3%, up by 173 basis points from the previous quarter.
The furniture retail sector faces ongoing challenges, including volatile interest rates, a housing shortage, and high home prices, contributing to a sustained downturn. Hooker Furniture is concentrating on controllable factors to mitigate these issues, having achieved a 25% reduction in fixed costs, amounting to roughly $25.0 million, with full implementation anticipated by fiscal year 2027.
HOFT remains dedicated to its dividend policy, issuing $0.23 per share, which annualizes to $0.92 per share, yielding 8.1%. The quarter concluded with $18.0 million in cash, and the company has since cleared all revolving credit facility borrowings, maintaining about $3.0 million in cash and $63.3 million in available credit.
Inventory management has been pivotal, with strategic adjustments leading to a stronger balance sheet. The introduction of a Vietnam warehouse has significantly cut lead times, reducing the need for extensive security stock. The backlog stood at $51.2 million, slightly down from $52.6 million in Q4 FY2025, reflecting efficient throughput and operational adjustments.
Valuation analyses, including Dividend Discount and DCF Models, estimate HOFT's value with mid-points around $15.95 and $15.98, respectively, highlighting its potential in the furniture retail market despite current macroeconomic pressures.
