HOOKER FURNISHINGS Corp Q4 FY2025 earnings call

• Milestones in fiscal 2025 included Margaritaville licensing, Hooker Branded's new merchandising strategy, Sunset West East Coast expansion, inventory investments, and market share gains.
• Excluding charges, financial performance improved sequentially each quarter. Accelerated cost reductions, including planned exit of Savannah warehouse and opening of Vietnam warehouse in May 2025.
• Hooker Branded saw Q4 sales rise due to new collections, Home Meridian benefited from hospitality sales, while Domestic Upholstery was affected by soft demand.

Hooker Branded: Fourth quarter net sales rose $3.8 million (10% from prior quarter) driven by 14% unit volume increase. Fiscal 2025 net sales decreased $10.1 million (6.5%) due to 5.7% drop in average selling prices and discounting, partially offset by nearly 3% volume rise. Home Meridian: Fourth quarter net sales increased $6.3 million (21.7%) year-over-year due to strong hospitality sales. Fiscal 2025 net sales decreased $12.7 million (9%) due to nearly 30% volume drop, with 78% of decrease tied to unprofitable lines. Domestic Upholstery: Fourth quarter net sales decreased $2 million (7%) due to soft demand across divisions. Fiscal 2025 net sales down $12.6 million (10%), with some divisions up, but segment posted $2.5 million operating loss.

• Fiscal 2026 cost savings of about $1 million from Savannah warehouse exit (net of transition costs). Annualized cost savings of $4 million to $5.7 million beginning in fiscal 2027.
• Vietnam warehouse opening in May 2025 expected to reduce domestic safety stock, improve product flow, and support margin expansion. Anticipate realizing $18 million to $20 million in total annual operating expense savings by fiscal 2027.

• Macroeconomic uncertainties, including weak housing market, lower consumer confidence, and tariff uncertainty.
• Charges in fourth quarter: $1.3 million end-of-life inventory write-downs, $878,000 trade name impairment, $718,000 bad debt, and $200,000 related to cost reduction plan.

Q: Nice to see sales improvements at Hooker Branded and HMI. Comment on Hooker Branded new collections and Q1 outlook, and Domestic Upholstery tariff impact.

A: Hooker Branded saw momentum from new collections in October, but Q1 details not available yet. On Domestic Upholstery, tariff announcements present opportunity for domestic manufacturing growth.

Q: Comment on current 90-day tariff pause and ability to strategic inventory build, and market share gains pacing.

A: Inventory was strategically increased, and Vietnam warehouse helps manage logistics. Market share gains were positive, and merchandising strategy (collective living) is expected to improve market share further.