MARTINSVILLE, VA — Hooker Furniture posted net sales of $222.5 million and a net income of $5.1 million, for the fiscal year ending Jan. 29, 2012. The residential furniture company said its annual net sales increased by $7.1 million, or 3.3%, and net income increased 56.1% compared to last year.
Gross profit increased $2.0 million to $48.9 million, compared to $46.9 million in the same period a year ago. Hooker’s case goods and upholstery divisions both posted sales increases of slightly over 3% for the year. The company noted Bradington-Young's imported leather sales rose nearly 9.4%, though domestic-produced shipments fell approximately 7% compared to the prior year. Shipments of Sam Moore's domestically produced upholstery line however, increased by almost 13.6%.
"All things considered, we had a very good year," Paul B. Toms Jr., chairman and CEO said in a statement. "Progress in many areas of our operations this year enabled us to grow profits over 50% on a 3.3% sales increase. As the year moved forward, we reduced excess inventory, improved our cash flow and cut operating losses in our upholstery division substantially."
For the fourth quarter, despite a net sales decrease of 1.1%, to $54.36 million, Hooker posted a net profit of $628,000. The company’s gross profit increased to $12.9 million, or 23.8% of net sales, compared to $10.9 million, or 19.8% of net sales the prior year. This was due in part to lower freight costs on imported furniture and higher upholstery average selling prices. "As we work through some vendor shifts from China to Vietnam and Indonesia, initial shipments of several well-placed new collections were delayed a few months, which impacted the fourth quarter," Toms said.
For 2012, Toms said, “We expect the sourcing transition from some of our vendors in China to vendors in Vietnam and Indonesia will continue to result in somewhat longer lead times and shipping delays, which will likely impact sales throughout the first quarter and to a diminishing degree in the second quarter. We'll have a lot of help in getting our arms around these sourcing challenges from our new Vice President of Asian Operations, Bill Reece, an industry veteran who recently joined Hooker. Bill is highly respected and has over 20 years of experience in Asia. We believe his expertise will help us improve our vendor performance and vendor alignment, matching our product line with those sources that best fit our customers' expectations for quality, on-time delivery, and value."
Toms continued, "While most macroeconomic indicators are continuing the long thaw that began a year or so ago, certain concerns still exist, such as the slow rebound of the housing market, global economic instability and, most recently, rising fuel costs. We expect consumer confidence and furniture retail demand to improve as we progress through the year. On the sales side, we're going up against a nearly 14% sales increase in the comparable quarter a year ago that was driven by our heavy discounting at the time. Yet due to our operational improvements, reduced discounting activity and more favorable freight rates, we're hopeful we can deliver better profitability, even on reduced sales, in the first quarter this year."
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