Stonegate Updates Coverage on Hooker Furniture Corporation (HOFT) Q2 FY26

Rhea-AI Summary

Hooker Furniture (NASDAQ: HOFT) reported Q2 FY26 results below expectations, with revenue of $82.1M (down 13.6% year-over-year), operating loss of $4.4M, and adjusted EPS of ($0.31).

The revenue decline was primarily driven by a 44.5% decrease in HMI segment due to weak demand, tariff concerns, and a major customer bankruptcy. However, Hooker Branded segment showed resilience with 1.3% growth, while Domestic Upholstery remained flat. The company maintained a 20.5% consolidated gross margin through cost savings and improved labor efficiency.

Management is focused on navigating macro challenges while implementing cost-saving initiatives, targeting $25M in annualized savings by FY27. The company has reduced debt by $16.5M year-to-date and optimized inventory to $58.5M.

Positive

• None.

Negative

• Revenue declined 13.6% year-over-year to $82.1M
• HMI segment sales dropped 44.5% year-over-year
• Operating loss of $4.4M and negative EPS of ($0.31)
• Impact from major customer bankruptcy
• Facing ongoing macro headwinds including housing market weakness

Dallas, Texas--(Newsfile Corp. - September 12, 2025) - Hooker Furniture Corporation (NASDAQ: HOFT): Stonegate Capital Partners updates their coverage on Hooker Furniture Corporation (NASDAQ: HOFT). HOFT reported revenue, operating income, and adj EPS of $82.1M, ($4.4)M, and ($0.31), respectively. This compares to our/consensus estimates of $93.7M/$91.2M, ($0.8)M/($1.5)M, and ($0.08)/($0.16). Revenues came in below expectations, declining 13.6% y/y, driven primarily by a 44.5% y/y decline at HMI from weak demand, tariff-driven buying hesitancy, and the impact of a major customer bankruptcy. In contrast, Hooker Branded net sales grew 1.3% y/y and Domestic Upholstery was flat, underscoring continued resilience in the Legacy brands. Despite soft sales, consolidated gross margin of 20.5% showed sequential stability supported by cost savings and improved labor efficiency. However, mix headwinds and restructuring costs pressured overall profitability. Management reaffirmed its focus on navigating macro headwinds such as housing market weakness, high mortgage rates, and subdued consumer demand, while positioning the company to return to profitability.

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

Key Takeaways:

• Despite a 13.6% y/y sales decline, HOFT maintained a consolidated gross margin of 20.5%, supported by labor efficiency and cost savings.
• HOFT achieved $3.7M in expense savings in 1H26, advancing toward its goal of $25M in annualized savings by FY27.
• HOFT repaid $16.5M of debt YTD and reduced inventory to $58.5M, enhancing liquidity while transitioning to its new Vietnam warehouse.
  
  

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/266280

FAQ

What were Hooker Furniture's (HOFT) Q2 FY26 earnings results?

HOFT reported revenue of $82.1M (down 13.6% y/y), operating loss of $4.4M, and adjusted EPS of ($0.31), all below analyst expectations.

How much cost savings is HOFT targeting and what has been achieved?

HOFT is targeting $25M in annualized savings by FY27 and has already achieved $3.7M in expense savings in 1H26.

What caused the significant decline in HOFT's HMI segment?

HMI segment declined 44.5% due to weak demand, tariff-driven buying hesitancy, and the impact of a major customer bankruptcy.

How is HOFT improving its financial position?

HOFT has repaid $16.5M of debt year-to-date and reduced inventory to $58.5M, while maintaining a 20.5% gross margin through cost savings and improved labor efficiency.

Which segments of HOFT showed resilience in Q2 FY26?

The Hooker Branded segment grew 1.3% year-over-year, while Domestic Upholstery remained flat, demonstrating resilience in Legacy brands.