Hooker Furnishings (HOFT) Q2 2026 earnings summary

Executive summary

• Q2 FY26 consolidated net sales were $82.1M, down 13.6% year-over-year, mainly due to a 44.5% decline at Home Meridian from macro pressures, tariffs, and a major customer bankruptcy.

• Consolidated net loss for Q2 was $3.3M ($0.31 per share); six-month net loss was $6.3M ($0.60 per share).

• Multi-phase cost reduction plan targets $25M in annualized savings by FY27, with $3.7M realized in H1 FY26 and $2M in restructuring costs in Q2.

• Hooker Branded achieved breakeven, and Domestic Upholstery reduced operating loss by nearly 70% year-over-year, reflecting efficiency gains.

• Order momentum: Q2 orders up 11% at Hooker Branded and 2% at Domestic Upholstery; backlog up 7% year-over-year.

Financial highlights

• Q2 gross profit was $16.8M (20.5% margin), down from $20.9M (22.0%) year-over-year; six-month gross profit was $35.8M (21.4% margin).

• Q2 operating loss was $4.4M, up from $3.1M last year; six-month operating loss was $8.0M.

• Cash flow from operations was $18.1M in H1 FY26; cash and equivalents at $821K, with $5.6M in outstanding loans and $57.7M in credit availability.

• Inventory reduced from $70.8M at year-end to $58.5M at quarter-end.

• Dividend maintained at $0.23 per share in Q2.

Outlook and guidance

• Cost reduction initiatives are expected to yield $25M in annualized savings by FY27, with $15M in FY26; further $2M in restructuring charges anticipated in H2 FY26.

• HMI's fixed cost structure expected to be aligned for sustainable business by end of Q3 2026, with most cost reductions in place.

• Management expects improved performance at Home Meridian by year-end, barring new tariffs or disruptive events.

• Focus remains on cost control, new product launches (Margaritaville), and leveraging the Vietnam warehouse for growth and efficiency.