Stonegate Updates Coverage on Hooker Furniture Corporation (HOFT) Q3 FY25

Rhea-AI Summary

Hooker Furniture (NASDAQ: HOFT) reported Q3 FY25 results with revenue of $104.4M, operating income of ($7.3M), and adjusted EPS of ($0.39). While revenue slightly exceeded consensus estimates, consolidated revenues decreased 10.7% from 3Q24 due to macro headwinds and a major HMI customer bankruptcy. Despite challenges, the company achieved a consolidated gross profit margin of 23.0%, up 100bps quarter-over-quarter.

The company maintains its goal of reducing fixed costs by 10% (approximately $10.0M) in FY26. HOFT also announced a global licensing agreement with Margaritaville to boost future revenues. The company faces ongoing challenges from varying interest rates, housing shortage, and elevated home prices.

Positive

• Gross profit margin increased 100bps q/q to 23.0%
• Revenue of $104.4M exceeded consensus estimates
• On track for $10.0M fixed cost reduction target in FY26
• New global licensing agreement with Margaritaville secured

Negative

• Operating loss of $7.3M
• Negative adjusted EPS of $0.39
• 10.7% decrease in consolidated revenues from 3Q24
• Major HMI customer bankruptcy impacting sales
• Challenging macroeconomic conditions affecting furniture retail environment

News Market Reaction

+2.29%

1 alert

+2.29% News Effect

On the day this news was published, HOFT gained 2.29%, reflecting a moderate positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Dallas, Texas--(Newsfile Corp. - December 6, 2024) - 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 $104.4M, ($7.3)M, and ($0.39), respectively. This compares to our/consensus estimates of $102.8M/$101.4M, $6.8M/$3.3M, and $0.53/$0.28. It is noted that revenues were slightly above consensus estimates this quarter, despite consolidated revenues decreasing 10.7% from 3Q24. The declines were due to the current headwinds seen in the macro environment leading to decreased volumes along with a bankruptcy filing by a major HMI customer. Despite the headwinds, HOFT reported consolidated GPM of 23.0%, an increase of 100bps q/q. The macroeconomic and furniture retail environment remains challenging, with varying interest rates, maintained housing shortage, and elevated home prices contributing to a prolonged downturn. Despite this, the company is focusing on controllable factors to position itself for future growth. As HOFT looks through the current market turbulence it has retained the goal of reducing fixed costs by 10%, or approximately $10.0M in FY26 and is still on pace to reach this goal. Lastly, the Company announced a global licensing agreement with Margaritaville, which is expected to boost revenues as demand normalizes. This strategic partnership aligns well with HOFT's growth initiatives.

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

Key Takeaways:

• Strategic inventory build to capitalize on high margin SKU's.
• Macro indicators such as housing, rates, and consumer sentiment all point in positive direction.
• Cost savings still expected to reduce costs by $10.0M in FY26.

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/232866

FAQ

What was Hooker Furniture's (HOFT) revenue in Q3 FY25?

Hooker Furniture reported revenue of $104.4M in Q3 FY25, slightly above consensus estimates but down 10.7% from the previous year.

What was HOFT's gross profit margin in Q3 FY25?

HOFT reported a consolidated gross profit margin of 23.0%, representing a 100 basis points increase quarter-over-quarter.

What cost reduction target has HOFT set for FY26?

HOFT aims to reduce fixed costs by 10%, approximately $10.0M, in FY26 and reports being on track to achieve this goal.

What new strategic partnership did HOFT announce in Q3 FY25?

HOFT announced a global licensing agreement with Margaritaville, expected to boost revenues as demand normalizes.