Hooker Furnishings Reports Mixed Q3 Results, Warns On Supply Chain Issues, Cost Inflation

Hooker Furnishings Corp HOFT reported a third-quarter FY22 sales decline of 11% year-on-year, to $133.4 million, beating the analyst consensus of $130.03 million.

• The company attributed the revenue decrease to significantly reduced shipments in the Home Meridian segment (HMI) due to COVID-related factory closures in Vietnam and Malaysia.
• Hooker Branded segment sales rose 18.5%, Home Meridian declined 37.3%, and Domestic Upholstery climbed 10.3%.
• EPS loss of $(0.10) missed the analyst consensus of $0.30.
• The gross margin contracted by 736 basis points Y/Y to 15%.
• Selling and administrative expenses rose 6.5% Y/Y to $21.1 million. The company reported an operating loss of $(1.7) million in the quarter.
• The company held $57.2 million in cash and equivalents as of October 31, 2021. Net cash provided by operating activities for nine months totaled $4.9 million.
• On December 7, 2021, the company's board declared a quarterly cash dividend of $0.20 per share, an increase of 11%, over the most recent dividend, payable on December 31, 2021, to shareholders of record on December 17, 2021.
• "Despite favorable demand for home furnishings and a historically strong order backlog triple typical levels for Hooker Furnishings, we were challenged by ongoing supply chain disruptions, especially the slower-than-expected reopening of Vietnam and Malaysia factories," said CEO Jeremy Hoff.
• Hooker Furnishings expects some level of continued supply chain turbulence and product and raw materials cost inflation to impact its net sales and income in the short term, at least through the Q2 of next fiscal year.
• Price Action: HOFT shares closed higher by 2.26% at $25.36 on Wednesday.