Teleconferência de Resultados do 2º Trimestre Fiscal de 2027 da Hooker Furnishings (HOFT): Lucratividade e Margens Melhoram

Principais Destaques

• A Hooker Furnishings reportou um lucro líquido consolidado no 2º trimestre fiscal de 2027 de US$ 1,7 milhão, uma melhoria de US$ 4,9 milhões em relação ao mesmo período do ano anterior e marcando seu terceiro trimestre lucrativo consecutivo.
• As vendas líquidas diminuíram US$ 6 milhões, ou aproximadamente 9%, à medida que a receita caiu em todos os segmentos operacionais. Apesar das vendas menores, a margem bruta expandiu 690 pontos-base para 31,8%.
• O lucro operacional melhorou para US$ 1,3 milhão, ante um prejuízo operacional de US$ 0,5 milhão no mesmo trimestre do ano anterior, impulsionado pela recuperação de tarifas, reduções de custos anteriores e maior rentabilidade nos segmentos.
• A margem bruta do segmento Hooker Branded subiu 1.050 pontos-base para quase 40%, enquanto o segmento Domestic Upholstery passou a registrar um lucro operacional de US$ 833.000, ante um prejuízo de US$ 408.000.
• O backlog consolidado aumentou 6,2% em relação ao ano anterior e 8,4% na comparação sequencial. A administração espera que as remessas da linha Margaritaville aumentem ao longo do segundo semestre do ano fiscal de 2027 e até o ano fiscal de 2028.
• A administração não espera uma melhoria significativa no curto prazo na rotatividade do mercado imobiliário ou na demanda por produtos discricionários de alto valor, mas acredita que a base de custos mais baixa pode dar suporte a resultados melhores no segundo semestre em comparação ao ano anterior.

Principais Dados Financeiros

A empresa informou que os resultados do 2º trimestre fiscal se beneficiaram significativamente da recuperação de tarifas. Também destacou que o ano fiscal de 2026 incluiu um valor estimado de US$ 10,3 milhões em custos cumulativos de tarifas da IEEPA antes dos impostos, superando as recuperações registradas no trimestre atual. As reduções de custos fixos anualizados implementadas no ano anterior somaram US$ 17,5 milhões nas operações continuadas.

Desempenho Operacional e dos Negócios

Hooker Branded

As vendas líquidas caíram US$ 1,6 milhão, ou 4,5%, devido ao menor volume de unidades, descontos promocionais e escassez de SKUs estratégicos causados por prazos de entrega mais longos na Ásia. Preços médios de venda mais altos compensaram parcialmente essas pressões, enquanto as restrições de estoque de estofados importados haviam diminuído significativamente até o final do trimestre.

O lucro bruto aumentou US$ 3,2 milhões, e a margem bruta expandiu 1.050 pontos-base para quase 40%. O segmento gerou um lucro operacional de US$ 870.000, em comparação com resultados próximos do ponto de equilíbrio um ano antes. O backlog aumentou quase 35% em relação ao ano anterior.

Domestic Upholstery

As vendas líquidas caíram US$ 1,5 milhão, ou 5,3%, com a queda nas vendas de estofados em couro de alto padrão e tecidos personalizados superando o crescimento de dois dígitos em móveis para áreas externas e marcas próprias.

A margem bruta aumentou 450 pontos-base para 23%, impulsionada pela recuperação de tarifas sobre materiais importados, menores custos de materiais e melhor absorção de custos fixos indiretos. O lucro operacional atingiu US$ 833.000, em comparação a um prejuízo de US$ 408.000 no mesmo trimestre do ano anterior. O backlog subiu quase 5%, impulsionado principalmente pelo aumento de pedidos de marcas próprias.

Outras Operações e Operações Descontinuadas

As vendas líquidas do segmento Outras Operações caíram US$ 2,8 milhões, ou aproximadamente 66%, devido principalmente ao cronograma de projetos de hotelaria. O negócio registrou prejuízo operacional no segundo trimestre, mas manteve-se lucrativo nos primeiros seis meses do ano fiscal de 2027.

As operações descontinuadas geraram US$ 587.000 em lucro antes dos impostos. Isso incluiu aproximadamente US$ 1,6 milhão em recuperação de tarifas, parcialmente compensados por cerca de US$ 0,6 milhão em créditos a clientes e US$ 0,5 milhão em despesas adicionais de liquidação relacionadas a desinvestimentos.

Liquidez e Alocação de Capital

Durante o primeiro semestre, a Hooker Furnishings quitou US$ 3,6 milhões de sua linha de crédito, pagou US$ 2,5 milhões em dividendos em dinheiro, recomprou US$ 1,3 milhão em ações ordinárias e financiou US$ 1,1 milhão em despesas de capital.

A empresa recomprou 92.357 ações a um preço médio de US$ 13,68. Restavam aproximadamente US$ 3,7 milhões sob sua autorização de recompra de US$ 5 milhões ao final do trimestre.

Perspectivas da Administração

A administração afirmou que os gastos do consumidor continuam seletivos, enquanto a rotatividade no mercado imobiliário e a demanda por produtos discricionários de alto valor permanecem fracas. A empresa não espera uma melhoria significativa nas condições de mercado no curto prazo.

No entanto, a administração espera que as ações anteriores de custos e portfólio deem suporte a resultados melhores na segunda metade do ano fiscal de 2027 em comparação com o mesmo período do ano anterior, mesmo se as condições atuais de mercado persistirem. Espera-se que a atividade promocional se normalize durante o segundo semestre, após ter pressionado o mix de vendas e as margens no segundo trimestre fiscal.

A linha Margaritaville tinha compromissos para aproximadamente 100 galerias em lojas e 10 lojas de varejo físicas independentes. As remessas começaram durante o 2º trimestre fiscal e a administração espera que aumentem ao longo da segunda metade do ano fiscal de 2027 e no ano fiscal de 2028.

Riscos e Pontos de Atenção

• A atividade imobiliária fraca, a baixa confiança do consumidor e a demanda morna por móveis e artigos de decoração continuam a pressionar as vendas.
• Prazos de entrega mais longos e imprevisíveis na Ásia causaram escassez de SKUs estratégicos durante o trimestre, embora a administração tenha afirmado que essas restrições haviam diminuído significativamente até o final do trimestre.
• Descontos promocionais e um mix de vendas mais elevado no e-commerce pressionaram as margens da Hooker Branded.
• A recuperação de tarifas impulsionou os resultados atuais, mas a administração afirmou que não compensou totalmente os pagamentos de tarifas e os custos administrativos, financeiros, profissionais e de cadeia de suprimentos relacionados incorridos no ano fiscal de 2026.
• A receita do setor de hotelaria permanece sensível ao cronograma dos projetos, conforme demonstrado pela forte queda no segundo trimestre das vendas no segmento Outras Operações.

Destaques das Perguntas e Respostas dos Analistas

A administração afirmou que a escassez de SKUs da Hooker Branded foi um vento contrário significativo, mas os resultados de julho indicaram que a empresa começou a superar as restrições de oferta. Isso contribuiu para a confiança da administração no segundo semestre.

Para o segmento Domestic Upholstery, os executivos destacaram a força contínua nos negócios de móveis para áreas externas e marcas próprias. A administração também observou que a Sunset West está operando sem as interrupções de relocalização de armazém e conversão de ERP experimentadas anteriormente.

Os executivos expressaram alta confiança de que as promoções elevadas não persistirão, citando a melhora das tendências em julho e o desequilíbrio sazonal habitual durante o verão. A administração também descreveu o feedback dos varejistas em relação ao Labor Day como razoavelmente positivo.

Em relação à Margaritaville, a administração declarou que os compromissos dos varejistas representam espaço de vendas que a empresa não possuía anteriormente e não estão substituindo a posição de mercado existente da Hooker. Não se espera que os gastos relacionados às galerias sejam significativos para a alocação de capital.

Transcrição Completa da Teleconferência de Resultados

Transcrição completa da teleconferência de resultados

Comentários da administração

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.

Perguntas e respostas

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.