Hooker Furnishings Corp HOFT reported a third-quarter FY24 sales decline of 22.9% year-on-year to $116.83 million, beating the analyst consensus estimate of $116.26 million.
The company attributed the revenue decrease to continued soft demand for home furnishings, as well as the company's exit from the Accentrics Home product line.
Net sales declined in each of the three segments versus the prior year period. Hooker Branded segment sales decreased 31%, Home Meridian declined 13.6%, and Domestic Upholstery plunged 25%.
EPS of $0.65 beat the analyst consensus of $0.26.
The gross margin expanded by 780 basis points Y/Y to 28.9%. Selling and administrative expenses declined 2.8% Y/Y to $24 million. The company reported an operating income of $8.8 million in the quarter with an operating margin of 7.5%.
The company held $39.8 million in cash and equivalents as of October 29, 2023. Net cash provided by operating activities for nine months totaled $48.8 million.
On December 5, 2023, the company's board declared a quarterly cash dividend of $0.23 per share, an increase of 4.5%, over the most recent dividend, payable on December 29, 2023, to shareholders of record on December 15, 2023.
"While the housing market slowdown driven by high interest rates, and a shift in consumer discretionary spending away from home furnishings continue to challenge, we're encouraged by positive indicators like the normalization of ocean freight rates, eased supply chain constraints, more stable raw material costs and increased labor availability," said CEO Jeremy Hoff.
"As we look to the next quarter, we see flat sales for our higher-priced Hooker Legacy brands as compared to the prior year fourth quarter."
Price Action: HOFT shares closed lower by 1.08% at $20.09 on Wednesday.
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