MARTINSVILLE, VA - Hooker Furniture more than doubled net income for the first quarter of its fiscal year despite experiencing an 11.4% drop in sales.
Hooker Furniture recorded a Q1 profit of $1.3 million on $52.7 million in net sales compared to a $523,000 profit on $58.4 million in sales a year ago. The company attributed the earnings increase to a $750,000 bottom-line improvement in its upholstery segment, aided by decreased discounting and lower selling and administrative costs. Last year, Hooker Furniture's upholstery program ran up a $3 million Q1 loss created in part by the transfer of Bradington-Young's manufacturing and corporate headquarters from an older, inefficient plant in Cherryville, NC, to a newer and more efficient factory in Hickory, NC.
"This quarter's sales results are disappointing because stock-outs on key items and groups offset the progress we have made in so many other facets of our business," said Paul Toms Jr., chairman and chief executive officer. "We're extremely pleased to have recorded a small operating profit in the upholstery segment this quarter. In addition, we have successfully worked through the heavy product discounting that impacted the first three quarters of last year, and ocean freight rates have stabilized at more favorable levels. The freshening of our product line has been rewarded with strong retailer acceptance of recent product introductions."
Toms said Hooker Furniture experienced a 20 percent increase to its new showroom during the Spring High Point Market in April. "We had great reaction to many of our introductions, especially our Rhapsody casegoods and upholstery collection and our new Sam Moore fabric sofa program. However, retailers reported a marked slowing of business in March and April, which was reflected in weaker incoming orders during our first quarter. In the second quarter, we'll still be working through the temporary impact of not being able to convert our backlog into shipments, although we expect to begin shipping key collections in June."
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