Hooker Furnishings (HOFT) Earnings Call zum 2. Quartal des Geschäftsjahres 2027: Profitabilität und Margen verbessern sich

Wichtigste Erkenntnisse

• Hooker Furnishings wies für das zweite Quartal des Geschäftsjahres 2027 einen konsolidierten Nettogewinn von 1,7 Mio. US-Dollar aus, was einer Verbesserung um 4,9 Mio. US-Dollar gegenüber dem Vorjahr entspricht und das dritte profitable Quartal in Folge markiert.
• Der Nettoumsatz ging um 6 Mio. US-Dollar bzw. rund 9 % zurück, da die Erlöse in allen operativen Segmenten nachgaben. Trotz des geringeren Umsatzes stieg die Bruttomarge um 690 Basispunkte auf 31,8 %.
• Das Betriebsergebnis verbesserte sich von einem operativen Verlust von 0,5 Mio. US-Dollar im Vorjahresquartal auf 1,3 Mio. US-Dollar, unterstützt durch Zollerstattungen, frühere Kostensenkungen und eine stärkere Segmentprofitabilität.
• Die Bruttomarge von Hooker Branded stieg um 1.050 Basispunkte auf nahezu 40 %, während Domestic Upholstery von einem Verlust von 408.000 US-Dollar auf einen operativen Gewinn von 833.000 US-Dollar drehte.
• Der konsolidierte Auftragsbestand stieg im Jahresvergleich um 6,2 % und im Vergleich zum Vorquartal um 8,4 %. Das Management geht davon aus, dass die Auslieferungen für Margaritaville in der zweiten Hälfte des Geschäftsjahres 2027 und im Geschäftsjahr 2028 weiter zunehmen werden.
• Das Management erwartet kurzfristig keine deutliche Erholung bei Immobilienverkäufen oder der Nachfrage nach höherpreisigen Gütern, geht jedoch davon aus, dass die niedrigere Kostenbasis verbesserte Ergebnisse in der zweiten Jahreshälfte gegenüber dem Vorjahr unterstützen kann.

Wichtigste Finanzdaten

Das Unternehmen gab bekannt, dass die Ergebnisse des zweiten Quartals des Geschäftsjahres erheblich von Zollerstattungen profitierten. Zudem wurde angemerkt, dass das Geschäftsjahr 2026 geschätzte kumulierte IEEPA-Zollkosten von 10,3 Mio. US-Dollar vor Steuern enthielt, was die im aktuellen Quartal ausgewiesenen Erstattungen übersteigt. Die im Vorjahr umgesetzten jährlichen Festkostensenkungen beliefen sich in den fortgeführten Geschäftsbereichen auf insgesamt 17,5 Mio. US-Dollar.

Geschäfts- und operative Entwicklung

Hooker Branded

Der Nettoumsatz sank um 1,6 Mio. US-Dollar bzw. 4,5 % aufgrund eines geringeren Absatzvolumens, Verkaufsförderungsrabatten und Engpässen bei wichtigen SKUs infolge längerer Lieferzeiten aus Asien. Höhere durchschnittliche Verkaufspreise glichen diesen Druck teilweise aus, während sich die Lagerengpässe bei importierten Polstermöbeln bis zum Quartalsende weitgehend entspannt hatten.

Der Bruttogewinn stieg um 3,2 Mio. US-Dollar und die Bruttomarge weitete sich um 1.050 Basispunkte auf nahezu 40 % aus. Das Segment erwirtschaftete ein Betriebsergebnis von 870.000 US-Dollar, verglichen mit einem annähernd ausgeglichenen Ergebnis im Vorjahr. Der Auftragsbestand stieg im Jahresvergleich um fast 35 %.

Domestic Upholstery

Der Nettoumsatz fiel um 1,5 Mio. US-Dollar bzw. 5,3 %, da der Rückgang beim Verkauf hochwertiger Leder- und maßgefertigter Stoffpolstermöbel das zweistellige Wachstum bei Eigenmarken und Outdoor-Möbeln überwog.

Die Bruttomarge stieg um 450 Basispunkte auf 23 %, unterstützt durch Zollerstattungen auf importierte Materialien, geringere Materialkosten und eine verbesserte Gemeinkostenabsorption. Das Betriebsergebnis erreichte 833.000 US-Dollar, verglichen mit einem Verlust von 408.000 US-Dollar im Vorjahresquartal. Der Auftragsbestand stieg um fast 5 %, vor allem aufgrund höherer Bestelleingänge bei Eigenmarken.

Alle sonstigen und eingestellten Geschäftsbereiche

Der Nettoumsatz des Bereichs Sonstige sank um 2,8 Mio. US-Dollar bzw. rund 66 %, Hauptgrund war der zeitliche Ablauf von Projekten im Bereich Hospitality. Der Geschäftsbereich verzeichnete im zweiten Quartal einen operativen Verlust, blieb jedoch in den ersten sechs Monaten des Geschäftsjahres 2027 profitabel.

Die eingestellten Geschäftsbereiche erzielten ein Ergebnis vor Steuern von 587.000 US-Dollar. Dies enthielt Zollerstattungen in Höhe von rund 1,6 Mio. US-Dollar, die teilweise durch Kundengutschriften von etwa 0,6 Mio. US-Dollar und zusätzliche veräußerungsbedingte Vergleichskosten von 0,5 Mio. US-Dollar ausgeglichen wurden.

Liquidität und Kapitalallokation

In der ersten Jahreshälfte tilgte Hooker Furnishings 3,6 Mio. US-Dollar seiner Kreditlinie, zahlte 2,5 Mio. US-Dollar an Bardividenden aus, kaufte Stammaktien für 1,3 Mio. US-Dollar zurück und tätigte Investitionen in Höhe von 1,1 Mio. US-Dollar.

Das Unternehmen kaufte 92.357 Aktien zu einem Durchschnittspreis von 13,68 US-Dollar zurück. Zum Quartalsende verblieben rund 3,7 Mio. US-Dollar im Rahmen des Rückkaufprogramms von 5 Mio. US-Dollar.

Ausblick des Managements

Das Management erklärte, dass das Konsumverhalten weiterhin selektiv bleibe, während die Dynamik am Immobilienmarkt und die Nachfrage nach höherpreisigen Ermessensgütern schwach blieben. Das Unternehmen erwartet kurzfristig keine wesentliche Verbesserung der Marktbedingungen.

Das Management geht jedoch davon aus, dass die zuvor ergriffenen Kosten- und Portfoliomaßnahmen verbesserte Ergebnisse in der zweiten Hälfte des Geschäftsjahres 2027 im Vergleich zum Vorjahreszeitraum unterstützen werden, selbst wenn die aktuellen Marktbedingungen anhalten. Es wird erwartet, dass sich die Verkaufsförderungsaktivitäten im Laufe der zweiten Jahreshälfte normalisieren, nachdem sie den Umsatzmix und die Margen im zweiten Quartal belastet hatten.

Für Margaritaville lagen Zusagen für rund 100 In-Store-Galerien und 10 eigenständige Einzelhandelsgeschäfte vor. Die Auslieferungen begannen im zweiten Quartal des Geschäftsjahres und dürften nach Einschätzung des Managements in der zweiten Hälfte des Geschäftsjahres 2027 und im Geschäftsjahr 2028 weiter zunehmen.

Risiken und Beobachtungspunkte

• Eine schwache Immobilienaktivität, ein geringes Verbrauchervertrauen und eine verhaltene Nachfrage nach Möbeln und Einrichtungsgegenständen belasten weiterhin den Umsatz.
• Längere und unvorhersehbare Lieferzeiten aus Asien führten im Quartal zu Engpässen bei wichtigen SKUs, wobei sich diese Einschränkungen laut Management bis zum Quartalsende weitgehend entspannt hatten.
• Rabatte im Rahmen von Verkaufsförderungsaktionen und ein höherer E-Commerce-Anteil am Umsatzmix belasteten die Margen von Hooker Branded.
• Zollerstattungen beflügelten die aktuellen Ergebnisse; das Management gab jedoch an, dass sie die im Geschäftsjahr 2026 angefallenen Zollzahlungen sowie die damit verbundenen Verwaltungs-, Finanzierungs-, Beratungs- und Lieferkettenkosten nicht vollständig ausglichen.
• Die Umsätze im Bereich Hospitality reagieren weiterhin empfindlich auf den zeitlichen Ablauf von Projekten, wie der deutliche Rückgang der Erlöse des Bereichs Sonstige im zweiten Quartal zeigt.

Höhepunkte der Fragerunde mit Analysten

Das Management gab an, dass die SKU-Engpässe bei Hooker Branded ein erheblicher Gegenwind waren, aber die Ergebnisse für Juli deuteten darauf hin, dass das Unternehmen begann, die Lieferengpässe hinter sich zu lassen. Dies trug zur Zuversicht des Managements für die zweite Jahreshälfte bei.

Im Bereich Domestic Upholstery hob das Führungsteam die anhaltende Stärke bei Outdoor-Möbeln und im Eigenmarkengeschäft hervor. Das Management merkte zudem an, dass Sunset West nun ohne die zuvor aufgetretenen Störungen durch Lagerverlegung und ERP-Umstellung arbeitet.

Das Führungsteam zeigte sich sehr zuversichtlich, dass die erhöhten Verkaufsförderungsaktivitäten nicht anhalten werden, und verwies auf sich verbessernde Trends im Juli sowie die übliche saisonale Flaute im Sommer. Das Management beschrieb zudem das Feedback der Einzelhändler im Vorfeld des Labor Day als verhältnismäßig positiv.

Bezüglich Margaritaville erklärte das Management, dass die Zusagen der Einzelhändler Verkaufsflächen darstellen, die das Unternehmen zuvor nicht hatte, und die bestehende Marktposition von Hooker nicht verdrängen. Ausgaben im Zusammenhang mit den Galerien dürften für die Kapitalallokation keine wesentliche Rolle spielen.

Vollständiges Transkript des Earnings Calls

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

Thank you. Good day and thank you for standing by. Welcome to the Hooker Furnishings Corporation Second Quarter 2027 Earnings Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Earl Armstrong, Senior Vice President and Chief Financial Officer. Please go ahead.

Earl Armstrong

Thank you, Tanya, and good morning, everyone. Welcome to our quarterly conference call to review financial results for the fiscal 2027 second quarter, which began on May 4, 2026, and ended on August 2, 2026. Joining me today is Jeremy Hoff, our Chief Executive Officer. We appreciate your participation. During our call, we may make forward-looking statements, which are subject to risks and uncertainties. A discussion of factors that could cause our actual results to differ materially from management's expectations is contained in our press release and SEC filing announcing our fiscal 2027 second quarter results. Any forward-looking statement speaks only as of today, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after today's call.

Before we jump into results, we want to discuss tariffs. We've included a table in our earnings release showing the impacts of this quarter's tariff recoveries by operating segment and for the total company. Obviously, tariff recoveries significantly and favorably impacted our Q2 results. However, it's important to note that tariff costs significantly and adversely affected our prior year results, too. Prior to the U.S. Supreme Court's February 2026 decision invalidating IEEPA tariffs, we incurred an estimated $10.3 million of cumulative pre-tax costs related to tariffs in our fiscal year 2026 results, which significantly exceeded the tariff recoveries we are reporting today.

In fiscal '26, we reported a net loss of nearly $27 million. Following the imposition of IEEPA tariffs beginning in April '25, we elected to honor pricing on existing customer backlog and for competitive and administrative reasons, did not immediately adjust pricing on certain other products. Our pricing reflects our total cost structure and the competitive and macroeconomic environment in which we operate, with tariffs being only one of many factors considered.

On to results. Despite continued weaknesses in the housing market, soft retail demand for furniture and home furnishings, and persistent macroeconomic challenges, we delivered a consolidated net income of $1.7 million, marking our third consecutive profitable quarter. Results benefited from tariff recoveries received during the quarter, the sustained impact of our prior cost reduction initiatives, and improved profitability in our reportable segments.

Consolidated net sales decreased $6 million, or about 9%, compared to the prior year period, reflecting lower sales across each of our operating segments. Despite the sales decline, gross profit increased $2.9 million and gross margin improved 690 basis points to 31.8%, while operating income improved to $1.3 million compared to an operating loss of $0.5 million in the prior year period. Now I'll turn the call over to Jeremy for his comments on fiscal 2027 second quarter results.

Jeremy Hoff

Thank you, Earl. Good morning, everyone. The significant costs we incurred due to the IEEPA tariffs significantly and adversely affected our prior year results, and we are grateful to have recovered some of those costs in our fiscal '27 second quarter. The substantial administrative burden these tariffs placed on our team over many months cannot be recovered. In addition to the tariffs paid, we incurred incremental costs associated with the IEEPA tariffs, including increased customs bond costs, legal and professional fees, financing and working capital costs, and other administrative and supply chain related expenses.

Although we do not believe that the tariff recoveries make us whole for the significant cost incurred by us in fiscal '26, I am grateful to the Hooker team for their persistence and extraordinary effort in navigating an unprecedented and highly complex environment and ultimately securing these recoveries for our shareholders. We are also deeply appreciative of the commitment and partnership of our suppliers and customers as we navigated this period of extraordinary uncertainty for our industry. We are encouraged to report $1.7 million in consolidated net income for the quarter, marking our third consecutive quarter of profitability and a $4.9 million improvement over the prior year's second quarter.

These results were achieved despite continued weakness in the housing activity, low consumer confidence, and the seasonally softer demand environment we typically experience in the first half of our fiscal year. The improvement reflects the benefit of tariff recoveries received during the quarter, as well as the sustained impact of the $17.5 million in annualized fixed cost reductions implemented across continuing operations in the prior year. These actions have helped position us to remain profitable despite continued pressure on sales. From a segment perspective, Hooker Branded and Domestic Upholstery both delivered improved profitability compared to the prior year quarter.

Hooker Branded benefited from tariff recoveries and higher selling prices, while Domestic Upholstery benefited from tariff recoveries, lower imported material costs, and improved overhead absorption. In addition to tariff recoveries, Hooker Branded profitability was impacted by shifts in channel and sales mix dynamics during the quarter. Seasonally softer summer shipments to brick-and-mortar retailers resulted in a greater mix of e-commerce sales along with targeted promotional activity designed to support consumer engagement.

The combination of channel mix and elevated promotional activity pressured margins during the quarter. We expect promotional activity to normalize during the second half of the fiscal year, much like we saw in July, the last month of our fiscal second quarter. It's important to note that our core fiscal July results, absent any tariff recoveries, showed significant improvement over prior year as we had mitigated many of the supply challenges referenced earlier. We believe that positive momentum will continue into the second half of the fiscal year. Now I want to turn the discussion back over to Earl, who will discuss highlights in each of our segments, along with our cash, debt, inventory, and capital allocation strategies.

Earl Armstrong

Thank you, Jeremy. Starting with Hooker Branded, net sales decreased $1.6 million, or 4.5%, in the second quarter, primarily due to lower unit volume, higher promotional discounts, and key SKU out-of-stocks due to significantly longer lead times out of Asia. These headwinds were partially offset by higher average selling prices. Inventory constraints in imported upholstery that began in the first quarter had largely eased by quarter end. Despite the decrease in sales, Hooker Branded gross profit increased $3.2 million and gross margin improved 1,050 basis points to nearly 40%. The improvement primarily reflected tariff recoveries and higher selling prices, partially offset by promotional discounting and higher warehousing and distribution costs. The segment generated $870,000 of operating income for the quarter, compared with approximately break-even results in the prior year period. The backlog increased nearly 35% compared to the prior year second quarter.

Turning now to Domestic Upholstery, net sales decreased $1.5 million, or 5.3%, in the second quarter as lower sales of upscale leather and custom fabric upholstery were partially offset by double digit growth in private label and outdoor furnishings. Gross profit increased $928,000 and gross margin improved 450 basis points to 23%, supported by tariff recoveries on imported materials, lower imported material costs, and improved overhead absorption. The segment generated operating income of $833,000 compared with an operating loss of $408,000 in the prior year quarter, reflecting the improved gross margin as well as the benefit of previously implemented cost reduction actions. The Domestic Upholstery's backlog increased nearly 5% compared to the prior year quarter, primarily reflecting higher private label orders.

In All Other, net sales decreased $2.8 million or about 66% in the second quarter, primarily due to project timing in its hospitality business, with approximately 80% of first half shipments occurring during the first quarter. Lower second quarter shipments resulted in an operating loss for the quarter. However, the business remained profitable for the first 6 months of fiscal 2027.

Turning to Disc Ops, although the divestiture was completed in the prior fiscal year, Disc Ops generated second quarter pre-tax income of $587,000, reflecting tariff recoveries, customer-related adjustments, and other post-divestiture activity. Results included approximately $1.6 million of tariff recoveries recognized as a reduction of cost of sales, partially offset by approximately $0.6 million of customer credits recorded as a reduction of revenue. Current period activity also included approximately $0.5 million of additional charges, arising from the net settlement of various divestiture-related balances with the buyer.

Turning now to cash, debt, and inventory. Cash and cash equivalents stood at $18.7 million at quarter end, an increase of $8.1 million from the end of the first quarter, and $17.5 million from the fiscal 2026 year end. Cash generated from operations during the first 6 months was $24 million. Cash was used to repay $3.6 million on our credit facility, distribute $2.5 million in cash dividends, repurchase $1.3 million of our common shares, and fund $1.1 million in CapEx. Inventory levels decreased by $5.3 million from $48.7 million at fiscal 2026 year end to $43.4 million at the end of the second quarter. We maintained our financial flexibility with $51.8 million in available borrowing capacity under our Amended and Restated Loan Agreement as of quarter end, net of standby letters of credit, and no outstanding balances on the facility. As of yesterday, we had approximately $21 million in cash on hand.

Finally, I'll discuss our capital allocation strategy. During the first 6 months of fiscal '27, we repurchased 92,357 shares of our common stock for approximately $1.3 million at an average price of $13.68 per share. At quarter end, approximately $3.7 million remained available for future purchases under our $5 million share repurchase authorization. As we position the company for sustainable growth, the share repurchase program and adjusted dividend continue to provide a balanced framework for returning capital to shareholders while preserving flexibility to invest in strategic priorities. We believe this approach supports both near-term returns and long-term shareholder value.

Now I'll turn the discussion back to Jeremy for his outlook.

Jeremy Hoff

Thank you, Earl. Looking to the second half of fiscal '27, consumer spending remains selective. Housing turnover and big-ticket discretionary demand remain weak, and we do not expect meaningful near-term improvement in market conditions. At the same time, the changes we have made to our cost structure and portfolio are delivering tangible benefits and should help position us to deliver improved results compared with the prior year period, even if current conditions persist. With the major cost reduction initiatives behind us, our focus is on disciplined execution across our core businesses.

Consolidated backlog increased 6.2% compared to prior year second quarter and 8.4% sequentially, led by Hooker Branded and Domestic Upholstery. We are also encouraged by the continued retail response to Margaritaville. We now have commitments for approximately 100 in-store galleries and 10 freestanding retail stores. Shipments began in the second quarter and are expected to build through the second half of fiscal '27 and into fiscal '28. We believe we are well positioned to capitalize on opportunities as demand recovers. This ends the formal part of our discussion, and at this time I will turn the call back over to our operator, Tanya, for questions.

Operator

[Operator Instructions] And our first question will be coming from the line of Anthony Lebiedzinski of Sidoti.

Fragen und Antworten

Anthony Lebiedzinski

Certainly nice to see the improved profitability in the quarter. First, just wanted to ask as far as the impact of the key SKU out-of-stocks at Hooker Branded. How significant was this? I mean, it sounds like it's no longer an issue, but just wanted to see if you could comment further on that topic, please.

Jeremy Hoff

I can't comment further specifically, but it was definitely a headwind for us, and it had a lot to do with lead times overseas, which extended, kind of, unpredictably. So as I mentioned in the script, the July, we feel like we started to get through that once we reached July. And our results in that month of the quarter gave us pretty positive view of where we can be in the second half.

Anthony Lebiedzinski

Okay. And then as far as Domestic Upholstery, just curious, what's the mix of business nowadays between private label and outdoor products and custom upholstery? I mean, kind of, where is that business nowadays and how do you see that going forward?

Earl Armstrong

We tend to look at it at the segment level, Anthony. And I think that's basically all we can say at this point. I think we're seeing strength in outdoor furnishings, especially given the seasonality. And like we mentioned, private label too is doing well.

Jeremy Hoff

Yes, I'll mention too with outdoor, this year, we don't have a warehouse move from Savannah, for example, for Sunset West. We don't have -- earlier in the game they had an ERP conversion with D365. So they've got as clear of a path as they've had due to us not having those type of movements going on. So it's really good business for us, and the category is strong. So we're excited about the opportunity.

Anthony Lebiedzinski

That's good to hear. Okay. And then just curious, you mentioned that shipments of Margaritaville started late in the quarter. Just wondering if you could comment on the revenue from Margaritaville and how do we think about the second half of the year as it relates to Margaritaville?

Jeremy Hoff

We can't get specific on that, but I will tell you that a big part of it is going to be in the second half, which we're in now. And many of those galleries are opening throughout the country, so that's probably all I can say on that.

Anthony Lebiedzinski

Okay. And just to follow up on the galleries, as far as those are concerned, I know you talked about 100 of those being open, but as far as the cost to do those galleries is that being done by you guys or by the retailers and, like, just wondering about if you could comment on that and if you could share more details?

Jeremy Hoff

That won't be significant to our capital allocation.

Anthony Lebiedzinski

Okay, got you. Okay. And lastly for me, I mean, so we just had Labor Day, which is an important holiday for the home furnishings industry. I know it's only been a few days since the holiday, but can you share any comments as to what you've heard from your retail customers about Labor Day? Even small anecdotes would be helpful.

Jeremy Hoff

I think that, I mean, the feedback that we've received has been fairly positive. I've been in this, I think, 30 years, and I think every one of those 30 years, retailers, our partners, are always grateful to be to the end of summer and actually to a point where you can start the fall. So I think there's a lot of optimism for just getting into that fall selling season. And I think Labor Day was reasonably good.

Operator

And our next question will be coming from the line of Dave Storms of Stonegate.

David Storms

Just wanted to maybe start with your comments around promotions expected to come down in the second half here, in light of the challenging macro environment, how should we be thinking about maybe your confidence to bring down promotions despite the macro environment?

Jeremy Hoff

High confidence because we already -- we mentioned July. And you do that in the summer months. You just simply don't balance it enough with enough regular business. We're confident that that's not going to be a trend moving forward.

David Storms

Understood. So then looking into the second half here, should that follow pretty regular seasonality with maybe a little bit of Margarita input, or I guess maybe said a different way, how should we think about price and mix and volume discount in the second half?

Jeremy Hoff

I think you should think about it as where we would normalize more and we're pretty optimistic on the second half.

David Storms

Understood. And I got to imagine the strong backlog that you have gives you a healthy dose of confidence there. Is there anything more you can tell us about the backlog? Maybe the texture of the margins, how much that is Margaritaville, anything in that vein?

Jeremy Hoff

Can't get that specific, but we're encouraged by our backlog, and we feel good about the second half.

David Storms

Understood. Appreciate that. And then maybe just one more on Margaritaville. I know you've mentioned it a couple times here, very excited to see how that develops over the next 6 to 12 months, but how should we be thinking about the sales funnel evolving from last quarter to this quarter? Are you seeing more firm commitments? I know you started shipping a little bit. Just anything more there would be great.

Jeremy Hoff

Overall, with Margaritaville, we just continue to be really encouraged by the amount of support, participation that our partners are giving us. They're as excited about the brand as we are. And there's going to be a significant amount of -- if you think about 100 gallery commitments and 10 retail stores, that's real estate that we didn't have before. So we feel really good about our position in that, and our ability to gain some market share in a different way than Hooker. One thing that is encouraging for us is that that's not taking Hooker's position in the marketplace. So it's real. It has a chance to be really accretive to our business and give us a real chance of growth in those categories.

Operator

And I would now like to turn the call back to Jeremy for closing remarks.

Jeremy Hoff

Thank you. I would like to thank everyone on the call for their interest in Hooker Furnishings. We look forward to sharing our fiscal '27 third quarter results in December. Take care.

Operator

And this concludes today's conference call. Thank you for participating. You may now disconnect.