Hooker Furnishings (HOFT) investor relations material

Executive summary

• Achieved third consecutive profitable quarter with $1.7 million net income, a $4.9 million year-over-year improvement, despite an 8.7% decline in net sales due to weak housing and retail demand.

• Results were significantly aided by $7.9 million in tariff recoveries following the Supreme Court's invalidation of IEEPA tariffs, offsetting prior year losses and supporting profitability.

• Sustained benefits from $17.5 million in annualized fixed cost reductions and improved segment profitability contributed to positive results.

• Cash and cash equivalents rose to $18.7 million at quarter end, with no outstanding term loan balance, reflecting improved liquidity and financial flexibility.

• Backlog increased 6.2% year-over-year and 8.4% sequentially, led by Hooker Branded and Domestic Upholstery.

Financial highlights

• Q2 net sales: $63.3 million (down 8.7% year-over-year); first half net sales: $132.7 million (down 5.5% year-over-year).

• Gross profit increased by $2.9 million and gross margin improved 690 basis points to 31.8%.

• Q2 operating income: $1.3 million (vs. $0.5 million loss prior year); Q2 net income: $1.7 million (vs. $3.3 million loss prior year); diluted EPS: $0.15 for Q2.

• Cash from operations for six months: $24.0 million; inventory decreased by $5.3 million to $43.4 million since year-end.

• $51.8 million in available borrowing capacity at quarter end.

Outlook and guidance

• Market conditions remain challenging with weak housing turnover, flat furniture retail sales, and low consumer confidence; no near-term improvement expected.

• Cost structure changes and portfolio adjustments are expected to drive improved results even if current conditions persist.

• Consolidated backlog increased, and Margaritaville shipments began in Q2, expected to build through the second half and into fiscal 2028.