HOOKER FURNISHINGS Corp Q4 FY26 Results

We are encouraged to report net income of $536,000 for the quarter. Fiscal 2026 was incredibly transformative as we successfully navigated significant, disruptive tariffs on our imports, opened a successful fulfillment warehouse in Asia and exited two unprofitable divisions, all while reducing fixed costs by about $26.3 million, or 25%, of which approximately $17.5 million in fixed cost savings is related to the continuing operations. At the same time, we delivered slight market share growth, with strength in key businesses offsetting isolated softness, and launched our Margaritaville line, which is delivering on our expectation to be the most impactful product launch in company history.

Today, we move forward as a leaner, higher-margin business with a much lower break-even point and the potential for significant profitability as demand returns. We believe we are positioned for a significant improvement in earnings in fiscal 2027 with our expectations bolstered by the early indications of strength within our Margaritaville product line, and we see a clear path to sustained profitable growth by focusing on our core expertise of better-to-best home furnishings.

Fourth quarter net income of $536,000 includes a $338,000 net loss from discontinued ops, related to the Pulaski Furniture and Samuel Lawrence Furniture businesses in the quarter. Other items affecting the quarter included one fewer week of sales as compared to the prior year quarter, and lower revenue due to disruptive winter storms in our largest markets and continued lower overall demand due to macroeconomic factors affecting our industry. We estimate the severe winter weather in January 2026 reduced net sales by approximately $3 to 4 million.

For Fiscal 2026, we reported a consolidated net loss of approximately $27 million. $15.6 million ($11.7 million net of tax) of that net loss was driven by goodwill and tradename impairment charges under the continuing operations, and $14.2 million was driven by a net loss from discontinued operations. Additionally, we recorded approximately $2 million ($1.5 million net of tax) in restructuring charges in continuing operations.

Despite significant headwinds, we are encouraged to report that the Hooker Branded segment reported $1.9 million in operating income for the year compared to a prior year operating loss of $433,000. Additionally, despite a significant impairment charge in the third quarter, the Domestic Upholstery segment showed improvements in the fourth quarter reducing its operating loss by more than 50% as compared to the prior year quarter, due to cost reduction initiatives and operational improvements.

In the Hooker Branded and Domestic Upholstery segments, incoming orders have increased year-over-year for three consecutive quarters, adjusted for the extra week in last year’s fourth quarter.

Housing activity and consumer confidence remain weak, and the Department of Commerce’s February advance monthly estimates reflect that reality, showing that retail sales for furniture and home furnishings decreased by 5.6% as compared to the prior year and lower than January 2026. We don’t anticipate near-term meaningful improvement in conditions; however, with a more efficient cost structure and a streamlined portfolio, we believe we are positioned to report much improved results if current market conditions persist.

Our advantage is a clear focus on our core businesses, with the organization fully aligned to drive organic growth and deliver more consistent, sustainable earnings over time. Margaritaville product and gallery commitments continue to scale, with shipments expected to begin in the second half of fiscal 2027.