MARTINSVILLE, Va. — Hooker Furnishings Corporation eported its operating results for its fiscal 2026 first quarter ended May 4, 2025.

According to the company, it lowered its operating loss by $1.6 million, or 31%, from the prior year first quarter to $3.6 million, driven by "cost-saving initiatives launched in the second half of last year," and despite reduced net sales in the quarter.

In addition, Hooker reduced operating expenses by $2.2 million versus the prior year first quarter. This reduction occurred despite the first quarter fiscal 2026 results including $523,000 in restructuring costs, primarily severance.

Hooker Furnishings is executing a multi-phase cost reduction strategy aimed at achieving approximately $25 million in annualized savings by next year (fiscal year 2027). The plan will occur in several phases:

Phase 1: Initial Cost Reductions (last year - fiscal year 2025)

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

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

Savings: Achieved over $3 million in fiscal 2025 and expect to realize over $10 million annually this year (fiscal year 2026).

Phase 2: Logistics & Operations Consolidation (current year – fiscal year 2026)

Actions:
Savannah Exit: We initiated and expect full closure and formal release from our lease of Savannah warehouse by October 31, 2025, previously used for the discontinued Accentrics Home product line.

Vietnam Warehouse: Opened new facility in May 2025 to enhance supply chain efficiency, reducing lead times from about 6 months to 4–6 weeks.

Further cost-saving opportunities through operational streamlining and potential outsourcing.

Financial Impact: Expecting $2-$3 million in net charges in fiscal 2026.

Savings: Anticipate net savings of $3.4 million in fiscal 2026, net of expected charges and other offsets; projecting net savings of over $14 million annually from fiscal 2027.

In total, the company expects to eliminate approximately $25 million or roughly 25% of its fixed costs, with about $11 million in warehousing and distribution expenses under cost of goods sold and $14 million in selling and administrative expenses. In fiscal 2026, Hooker expects to realize about $14 million in cost savings net of offsets and special charges. By fiscal 2027, Hooker Furnishings expects to realize $25 million in net annualized savings through these phased initiatives, enhancing profitability, operational efficiency, and long-term shareholder value.

“Importantly, our cost reductions should not impact our strategic growth priorities, including our collected living merchandising platform, the Vietnam warehouse advantage, and our upcoming Margaritaville licensed collection,” Hoff said.

The company reported consolidated net sales of $85.3 million for the first quarter, a decrease of $8.3 million, or 8.8%, compared to the same period last year.

Hooker’s legacy brands sales were stable, with Hooker Branded net sales increasing slightly by 0.8%, driven by higher unit volume, while the Domestic Upholstery Segment saw a slight 3.7% sales decrease, compared to the prior year first quarter, respectively.

The overall decrease in consolidated sales was primarily driven by a double-digit sales decrease at HMI, which is positioned in the mid-price segment where import tariffs have more sharply curtailed demand.

Hooker Branded achieved breakeven profitability for the quarter, while Domestic Upholstery and Home Meridian significantly narrowed operating losses by $713,000 (55%) and $584,000 (17%), respectively, from the prior year period.