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Hooker Furnishings' Q2 Loss Wider Than Expected, Sales Top
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Hooker Furnishings Corporation (HOFT - Free Report) reported mixed results for the second quarter of fiscal 2025 (ended July 28, 2024). Its adjusted loss was wider than the Zacks Consensus Estimate while net sales surpassed the same. On a year-over-year basis, the bottom and the top line declined.
The quarterly results were hurt by the ongoing sluggish demand in the home furnishings retail industry attributable to the high interest rates and subdued housing activity, along with other macroeconomic uncertainties. Furthermore, the absence of the ACH product line, which the company exited during fiscal 2024, accounted for approximately 35% of the consolidated sales decrease.
The bottom line was hurt mainly because of low sales volume and under-absorbed expenses.
Nonetheless, going forward, HOFT aims to focus on reducing non-strategic costs while continuing to invest in revenue and profit-generating initiatives.
HOFT’s Q2 in Detail
Hooker Furnishings reported an adjusted loss of 19 cents per share, wider than the Zacks Consensus Estimate of loss of 13 cents per share. In the prior-year quarter, it reported adjusted earnings per share of 7 cents.
Net sales of $95.1 million topped the consensus mark of $94 million by 1.7%. The metric declined 2.8% from the prior-year quarter’s level of $97.8 million.
Hooker Furnishings Corp. Price, Consensus and EPS Surprise
Consolidated order backlog value declined to $77.9 million at the end of July 28, 2024, from $88.2 million reported a year ago. That said, the value sequentially improved 8.5%.
Hooker Furnishings’ Segmental Details
Hooker Branded (36.6% of net sales): The segment’s net sales declined year over year to $34.8 million from $36.4 million. The decline was due to lower average selling prices following price reductions implemented in the second half of the previous year, attributed to reduced ocean freight costs.
The operating margin was (1.2)% against 10.7% in the year-ago period.
Home Meridian (32.1% of net sales): The segmental net sales grew 5.6% year over year to $30.5 million. The uptrend was backed by strong performance in its hospitality division, along with increased sales through major furniture chains and mass merchants.
The operating margin expanded to (2.9)% from (11.5)% in the year-ago period.
Domestic Upholstery (30% of net sales): Net sales of this segment declined to $28.6 million from $30.9 million reported a year ago. The decline was due to lower unit volume at Bradington-Young and HF Custom.
The operating margin was (4.5)% against 2.3% in the prior year.
Operating Highlights of HOFT
HOFT’s gross profit declined to $20.9 million during the quarter from $23.3 million in the year-ago period. The gross margin contracted 190 basis points year over year to 22%.
Selling and administrative expenses increased to $23.1 million from $21.1 million in the prior-year quarter.
Hooker Furnishings reported an operating loss of $3.1 million against operating income of $1.3 million in the year-ago period. The consolidated operating margin contracted to (3.3)% from 1.3% in the previous year.
HOFT’s Financials
As of July 28, 2024, Hooker Furnishings’ cash and cash equivalents were $42.1 million, down from $43.2 million at fiscal 2024-end.
There was no long-term debt outstanding at the end of the fiscal second quarter. The current portion of long-term debt increased to $22.2 million from $1.4 million at fiscal 2024-end.
As of the end of the first half of fiscal 2025, net cash provided by operating activities was $5.3 million compared with $51.4 million in the comparable period a year ago.
Malibu Boats, Inc. (MBUU - Free Report) reported mixed fourth-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same. However, both the bottom and top lines declined on a year-over-year basis.
The decline in net sales was mainly caused by a drop in wholesale shipments. This was influenced by reduced retail activity during the period. Higher promotional expenses and increased inventory levels in dealer channels also contributed to the decrease. For fiscal 2025, management expects net sales to increase in the low single-digits year over year. It forecasts adjusted EBITDA margin to be in the range of 10-12%.
La-Z-Boy Incorporated (LZB - Free Report) posted decent first-quarter fiscal 2025 (ended July 27, 2024) results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The top line increased on a year-over-year basis, driven by increased volume in the Wholesale segment.
LZB is committed to long-term investment despite near-term challenges in the furniture industry. Owing to the industry headwinds, it expects a modest improvement in second-quarter fiscal 2025 sales compared with the first-quarter tally, supported by seasonality.
PENN Entertainment, Inc. (PENN - Free Report) reported a narrower-than-expected loss in second-quarter 2024. The company’s bottom and top lines surpassed the Zacks Consensus Estimate but declined on a year-over-year basis. PENN's quarterly results were hampered by disappointing performances of its South and Interactive segments.
However, top-of-funnel growth improvement, better risk management and enhanced promotional strategies led to stronger-than-expected revenues and adjusted EBITDA in the Interactive segment. It continues to focus on database growth and enhancing engagement through the latest technology, ongoing investments in gaming and non-gaming areas, and partnerships in food and beverage.
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Hooker Furnishings' Q2 Loss Wider Than Expected, Sales Top
Hooker Furnishings Corporation (HOFT - Free Report) reported mixed results for the second quarter of fiscal 2025 (ended July 28, 2024). Its adjusted loss was wider than the Zacks Consensus Estimate while net sales surpassed the same. On a year-over-year basis, the bottom and the top line declined.
The quarterly results were hurt by the ongoing sluggish demand in the home furnishings retail industry attributable to the high interest rates and subdued housing activity, along with other macroeconomic uncertainties. Furthermore, the absence of the ACH product line, which the company exited during fiscal 2024, accounted for approximately 35% of the consolidated sales decrease.
The bottom line was hurt mainly because of low sales volume and under-absorbed expenses.
Nonetheless, going forward, HOFT aims to focus on reducing non-strategic costs while continuing to invest in revenue and profit-generating initiatives.
HOFT’s Q2 in Detail
Hooker Furnishings reported an adjusted loss of 19 cents per share, wider than the Zacks Consensus Estimate of loss of 13 cents per share. In the prior-year quarter, it reported adjusted earnings per share of 7 cents.
Net sales of $95.1 million topped the consensus mark of $94 million by 1.7%. The metric declined 2.8% from the prior-year quarter’s level of $97.8 million.
Hooker Furnishings Corp. Price, Consensus and EPS Surprise
Hooker Furnishings Corp. price-consensus-eps-surprise-chart | Hooker Furnishings Corp. Quote
Consolidated order backlog value declined to $77.9 million at the end of July 28, 2024, from $88.2 million reported a year ago. That said, the value sequentially improved 8.5%.
Hooker Furnishings’ Segmental Details
Hooker Branded (36.6% of net sales): The segment’s net sales declined year over year to $34.8 million from $36.4 million. The decline was due to lower average selling prices following price reductions implemented in the second half of the previous year, attributed to reduced ocean freight costs.
The operating margin was (1.2)% against 10.7% in the year-ago period.
Home Meridian (32.1% of net sales): The segmental net sales grew 5.6% year over year to $30.5 million. The uptrend was backed by strong performance in its hospitality division, along with increased sales through major furniture chains and mass merchants.
The operating margin expanded to (2.9)% from (11.5)% in the year-ago period.
Domestic Upholstery (30% of net sales): Net sales of this segment declined to $28.6 million from $30.9 million reported a year ago. The decline was due to lower unit volume at Bradington-Young and HF Custom.
The operating margin was (4.5)% against 2.3% in the prior year.
Operating Highlights of HOFT
HOFT’s gross profit declined to $20.9 million during the quarter from $23.3 million in the year-ago period. The gross margin contracted 190 basis points year over year to 22%.
Selling and administrative expenses increased to $23.1 million from $21.1 million in the prior-year quarter.
Hooker Furnishings reported an operating loss of $3.1 million against operating income of $1.3 million in the year-ago period. The consolidated operating margin contracted to (3.3)% from 1.3% in the previous year.
HOFT’s Financials
As of July 28, 2024, Hooker Furnishings’ cash and cash equivalents were $42.1 million, down from $43.2 million at fiscal 2024-end.
There was no long-term debt outstanding at the end of the fiscal second quarter. The current portion of long-term debt increased to $22.2 million from $1.4 million at fiscal 2024-end.
As of the end of the first half of fiscal 2025, net cash provided by operating activities was $5.3 million compared with $51.4 million in the comparable period a year ago.
HOFT’s Zacks Rank & Recent Consumer Discretionary Releases
Hooker Furnishings currently carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Malibu Boats, Inc. (MBUU - Free Report) reported mixed fourth-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same. However, both the bottom and top lines declined on a year-over-year basis.
The decline in net sales was mainly caused by a drop in wholesale shipments. This was influenced by reduced retail activity during the period. Higher promotional expenses and increased inventory levels in dealer channels also contributed to the decrease. For fiscal 2025, management expects net sales to increase in the low single-digits year over year. It forecasts adjusted EBITDA margin to be in the range of 10-12%.
La-Z-Boy Incorporated (LZB - Free Report) posted decent first-quarter fiscal 2025 (ended July 27, 2024) results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The top line increased on a year-over-year basis, driven by increased volume in the Wholesale segment.
LZB is committed to long-term investment despite near-term challenges in the furniture industry. Owing to the industry headwinds, it expects a modest improvement in second-quarter fiscal 2025 sales compared with the first-quarter tally, supported by seasonality.
PENN Entertainment, Inc. (PENN - Free Report) reported a narrower-than-expected loss in second-quarter 2024. The company’s bottom and top lines surpassed the Zacks Consensus Estimate but declined on a year-over-year basis. PENN's quarterly results were hampered by disappointing performances of its South and Interactive segments.
However, top-of-funnel growth improvement, better risk management and enhanced promotional strategies led to stronger-than-expected revenues and adjusted EBITDA in the Interactive segment. It continues to focus on database growth and enhancing engagement through the latest technology, ongoing investments in gaming and non-gaming areas, and partnerships in food and beverage.