Stonegate Updates Coverage on Hooker Furniture Corporation (HOFT) 2Q27

Stonegate highlights HOFT’s 2Q27 EPS and margin beats, tariff-boosted but with underlying gross margin and backlog also improving year over year.

Rhea-AI Summary

Hooker Furniture (HOFT) delivered 2Q27 revenue of $63.3M, operating income of $1.3M and EPS of $0.16 versus Stonegate/consensus EPS estimates of $0.01/($0.02).

Revenue compared with Stonegate/consensus forecasts of $65.2M/$62.3M and operating income with $0.1M/($0.7)M. Consolidated gross margin expanded 690 bps year over year to 31.8%, largely from tariff-related cost of goods sold recoveries. Excluding approximately $4.3M of COGS recoveries and $0.5M of customer credits, Stonegate calculates a normalized gross margin of about 25.6%, still roughly 70 bps higher year over year. Tariff-adjusted gross margin improved about 340 bps at Hooker Branded and 150 bps at Domestic Upholstery.

Backlog rose 6.2% year over year, with Hooker Branded up 34.7% and Domestic Upholstery up 4.8%. Combined Hooker Branded and Domestic backlog reached about $41.4M, up roughly 18% year over year, while All Other backlog declined on hospitality-project timing. Margaritaville has entered shipment conversion with about 100 in-store galleries and 10 freestanding stores committed. Management does not expect a near-term industry recovery but still anticipates better 2H27 results than last year.

Positive

• EPS $0.16 vs Stonegate/consensus estimates of $0.01/($0.02) in 2Q27
• Operating income $1.3M vs Stonegate/consensus estimates of $0.1M/($0.7)M
• Gross margin 31.8%, up 690 bps y/y, with normalized margin ~25.6% (+~70 bps)
• Backlog +6.2% y/y; Hooker Branded +34.7%, Domestic Upholstery +4.8%
• Combined Hooker Branded and Domestic backlog ~$41.4M, up about 18% y/y

Negative

• Revenue $63.3M below Stonegate estimate of $65.2M for 2Q27
• Margin expansion heavily aided by ~$4.3M COGS recoveries and $0.5M credits
• Management does not expect a near-term recovery in the broader industry

Key Figures

Revenue: $63.3M Operating Income: $1.3M EPS: $0.16 +5 more

Revenue

$63.3M

2Q27 reported result

Operating Income

$1.3M

2Q27 reported result

EPS

$0.16

2Q27 reported result

Gross Margin

31.8%

Expanded 690 bps year over year

COGS Recoveries

$4.3M

Excluded from normalized gross-margin calculation

Customer Credits

$0.5M

Excluded from normalized gross-margin calculation

Consolidated Backlog Growth

6.2%

Year over year

Combined Hooker Branded and Domestic Backlog

$41.4M

Up about 18% year over year

Historical Context

2 past events · Latest: Sep 11

2 events

1. Sep 11

   Q2 profitability report

   24h Move

   +2.1%

   Q2 profitability improved despite lower sales, supported largely by tariff recoveries.

2. Jun 11

   Q1 profitability report

   24h Move

   +26.1%

   Q1 operating income turned positive while gross margin improved amid soft demand.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

gross margin, cogs, backlog

3 terms

gross margin financial

"Consolidated gross margin expanded 690 bps y/y to 31.8%"

Gross margin is the difference between how much money a company makes from selling its products and how much it costs to produce them, expressed as a percentage of sales. It shows how efficiently a company is turning sales into profit before other expenses like marketing or salaries. Higher gross margin means the company keeps more money from each sale, which is a good sign of financial health.

View in glossary

cogs financial

"Excluding $4.3M of COGS recoveries and $0.5M of customer credits"

Cost of goods sold (COGS) is the direct cost a company incurs to produce or purchase the products it sells, including raw materials, production labor, and factory overhead tied to making the items. Investors track COGS because it directly affects gross profit and shows how efficiently a business converts inputs into saleable products — like how much a baker spends to make a loaf versus the price it sells for; rising COGS without higher selling prices can squeeze profit margins and valuation.

View in glossary

backlog financial

"Backlog improved 6.2% y/y overall"

A backlog is the amount of work or orders that a company has received but hasn't completed yet. It’s like a restaurant with many dishes to serve; the backlog shows how many orders are still waiting to be finished. It matters because a large backlog can indicate strong demand or potential delays in delivering products or services.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Dallas, Texas--(Newsfile Corp. - September 15, 2026) - Hooker Furniture Corporation (NASDAQ: HOFT): Stonegate Capital Partners updates their coverage on Hooker Furniture Corporation (NASDAQ: HOFT). HOFT reported revenue, operating income, and EPS of $63.3M, $1.3M, and $0.16, respectively. This compares to our/consensus estimates of $65.2M/$62.3M, $0.1M/($0.7)M, and $0.01/($0.02). Consolidated gross margin expanded 690 bps y/y to 31.8%, with tariff recoveries accounting for most of the increase. Excluding $4.3M of COGS recoveries and $0.5M of customer credits, we calculate gross margin still improved roughly 70 bps y/y to ~25.6%. More importantly, the core businesses showed better underlying core margin performance, with tariff-adjusted gross margin improving approximately 340 bps y/y at Hooker Branded and 150 bps at Domestic Upholstery. With material additional tariff recoveries not expected, 2H27 should provide investors with a cleaner read on normalized profitability.

To view the full announcement, including downloadable images, bios, and more, click here.

Key Takeaways:

• Reported gross margin expanded to 31.8% from a recast 24.9% a year ago, with tariff recoveries providing much of the increase. After removing approximately $4.3M of COGS recoveries and $0.5M of customer credits, the report's estimate of roughly 25.6% normalized gross margin is reasonable, implying approximately 70 bps of underlying y/y improvement. The Hooker Branded and Domestic Upholstery adjusted-margin calculations also check.
• Backlog improved 6.2% y/y overall, with Hooker Branded up 34.7% and Domestic Upholstery up 4.8%. Combined Hooker Branded and Domestic backlog was approximately $41.4M, up about 18% y/y, while All Other declined on hospitality-project timing. Margaritaville has moved into shipment conversion, with approximately 100 in-store galleries and 10 freestanding stores committed.
• Management does not expect a near-term industry recovery but continues to expect improved 2H results versus last year even if current conditions persist. July core results improved materially y/y without tariff recoveries, promotions are expected to normalize, and the report's FY27 model assumes stronger second-half sales and profitability rather than another major restructuring benefit.

Click image above to view full announcement.

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About Stonegate
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking services for public and private companies.

Contacts:

Stonegate Capital Partners
(214) 987-4121
info@stonegateinc.com

Source: Stonegate, Inc.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/314408

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How did normalized gross margin look after removing tariff-related recoveries and credits?

After excluding approximately $4.3M of cost of goods sold recoveries and $0.5M of customer credits, Stonegate estimates Hooker Furniture’s normalized gross margin at about 25.6% in 2Q27, which it views as implying roughly 70 bps of underlying year-over-year improvement.

What were the key backlog trends by segment in 2Q27?

Overall backlog improved 6.2% year over year. Hooker Branded backlog increased 34.7% and Domestic Upholstery backlog rose 4.8%. Combined Hooker Branded and Domestic backlog was approximately $41.4M, up about 18% year over year, while All Other backlog declined due to hospitality-project timing.

What is the status of the Margaritaville business for Hooker Furniture?

Margaritaville has moved into shipment conversion, with approximately 100 in-store galleries and 10 freestanding stores committed.

What does management expect for the second half of FY27?

Management does not expect a near-term industry recovery but continues to expect improved 2H27 results versus last year even if current conditions persist. Stonegate notes that its FY27 model assumes stronger second-half sales and profitability rather than another major restructuring benefit.