MARTINSVILLE, Va. — Hooker Furnishings Corporation has reported operating results for its fiscal 2026 second quarter ended August 3, 2025.

As per the company's Q2 Earnings Call, Hooker broke even in the quarter despite weak demand and $655,000 in restructuring charges, and Domestic Upholstery reduced its operating loss nearly 70% even including $152,000 of restructuring costs. 

The company notes on their website: 

"At HMI, we have de-risked significantly over the last several years and continue to further that effort. These actions have been obscured by weak demand in the home furnishings industry due to an extremely weak housing environment, and tariff buying hesitancy in the market segment in which HMI competes. By the end of fiscal 2026 third quarter, HMI’s fixed cost structure will be aligned to support what we believe to be a sustainable business and one in which its sales can be significantly scaled from current levels when demand returns. Barring additional tariffs or other significant, disruptive events, we expect HMI’s performance to be significantly enhanced by the end of the current fiscal year."

“Hooker Furnishings is taking decisive steps to return the business to profitability. Our cost-reduction initiatives and focus on growth initiatives have positioned the company to maintain resilience in today’s challenging environment, and to strategically capture growth when demand returns,” said Jeremy Hoff, CEO.

"We're well into our multiphase cost-reduction plan to eliminate roughly $25 million or 25% of our fixed cost," states Earl Armstrong, CFO, on the 2026 Q2 call, held on Septmber 11. "This includes an estimated $11 million in warehousing and distribution expenses, which is reported in cost of sales and $14 million in selling and administrative expenses."

The company has executed a multi-phase cost reduction strategy aimed at achieving approximately $25 million in annualized savings by fiscal year 2027. In fiscal 2025, Hooker Furnishings identified $10 million in expense reductions and were able to achieve $3 million in savings in that fiscal year. In Fiscal 2026, an additional $15 million in expense reductions was identified. In the first half of fiscal 2026, $3.7 million in expense reductions was achieved, despite having recorded $1.7 million in restructuring charges. The company expects to achieve additional savings in the second half of the year from both initiatives and believe they are on track to achieving approximately $25 million in annualized savings beginning in fiscal 2027.

These phased initiatives are designed to enhance profitability, improve operational efficiency, and drive long-term shareholder value. Importantly, cost-reduction efforts are not expected to impact strategic growth priorities, which include advancing the Collected Living merchandising platform, leveraging the Vietnam warehouse advantage, and launching an upcoming Margaritaville licensed collection.

Phase 1: Initial Cost Reductions (Fiscal 2025)

Actions: Reduced fixed costs by over $10 million through facility downsizing, workforce reductions, and other fixed cost reductions.

Financial Impact: Incurred $4.9 million in restructuring charges, including $3.6 million in severance.

Phase 2: Logistics & Operations Consolidation (Fiscal 2026)

Actions:

Savannah Warehouse: Entered into an agreement for full closure and lease termination effective October 31, 2025. This facility was primarily utilized for the discontinued Accentrics Home product line.

Vietnam Warehouse: Opened in May 2025 and has reached approximately two-thirds capacity. This transition has reduced direct container lead times from six months to four to six weeks, improving customer service, optimizing U.S. inventory levels, and enabling greater container customization while reducing reliance on domestic warehousing.

Operational streamlining: Pursuing additional cost-saving opportunities through supply chain optimization, organizational simplification in the Domestic Upholstery segment, and expansion of outsourced services.

Financial impact: Incurred $2.5 million in restructuring costs during the first half of fiscal 2026, including $1.7 million in severance and warehouse consolidation costs and $0.8 million from inventory liquidation at the Savannah warehouse. Expecting approximately $2 million in additional charges in the second half of fiscal 2026, primarily related to fixed asset write-offs and severance costs associated with the Savannah warehouse exit in October.

“We are confident that the actions we’ve taken, scaling fixed costs, reducing debt, and launching compelling new product lines, provide the foundation for long-term value creation," concludes Hoff. "Importantly, we are on track to have our new expense structure largely in place by the end of the third quarter, supporting a path to profitability at even current revenue levels.”

To read the full report, visit investors.hookerfurnishings.com.