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Jul 28, 2024
Hooker Furnishings Q2 2025 Earnings Report
Improved sequential performance in the second quarter.
Key Takeaways
Hooker Furnishings reported its fiscal 2025 second quarter operating results. Net sales increased in Home Meridian segment, driven by strong performance in its hospitality division. The company expects to realize 10% savings in fixed costs beginning in the second half of this fiscal year, for a total of a $10 million reduction.
Hooker Branded segment net sales decreased by 4.5% due to lower average selling prices, but unit volume exceeded the prior year by 11.6%.
Home Meridian segment net sales increased by 5.6%, driven by strong performance in its hospitality division.
Domestic Upholstery segment net sales decreased by 7.6% due to lower unit volume at Bradington-Young and HF Custom.
Cash and cash equivalents were $42.1 million, and inventory levels decreased by $4.7 million from year-end.
Revenue by Segment
Forward Guidance
The company anticipates that a potential interest rate cut by the Federal Reserve could accelerate housing activity. They are focused on maximizing efficiencies with planned cost reductions and investing in expansion strategies for improved profitability and revenue growth when demand returns.
Positive Outlook
- Inflation hit its lowest post-pandemic level in July, with the Consumer Price Index cooling to 2.9%, setting up a possible interest rate cut in September
- There’s been a recent surge in mortgage refinancing in August, which is another positive indicator
- Overall retail sales rose about 3% during the same period
- The University of Michigan Consumer Sentiment Index rose in August for the first time since March
- Existing-home sales grew in July ending a four-month sales decline
Challenges Ahead
- Challenges in the macroeconomic and furniture retail environment have extended well beyond expectations
- High interest rates, a housing shortage and elevated home prices have created a sustained housing downturn for over two years
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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