Hooker Furniture earns $3 million despite sales dip

Sales decline 6.7% in fourth quarter to $52.7 million

Larry Thomas -- Kids Today, 4/26/2010 10:30:00 AM

MARTINSVILLE, Va. — Case goods and upholstery resource Hooker Furniture earned a profit of $3 million in the quarter ended Jan. 31 as sales slid 6.7%.

 

The quarterly profit, which equals 28 cents per share, reversed a net loss of $719,000 or 7 cents per share for the quarter ended Jan. 31, 2009.

 

The company attributed the turnaround to cost reductions, better capacity utilization at its upholstery factories, and lower warehousing and distribution costs.

 

Sales for the quarter, the fourth quarter of Hooker’s fiscal year, totaled $52.7 million, down from $56.5 million in the fourth quarter of the previous fiscal year.

 

“Given the inconsistent demand at retail, we're pleased that we were able to post a respectable profit in the fourth quarter and that sales seem to have stabilized,” said Paul Toms Jr., chairman and CEO. “Consistent with overall industry trends, our upholstery shipments have rebounded earlier and stronger than wood furniture shipments.”

 

The strong fourth quarter allowed the company to show a profit of $3 million or 28 cents per share for the fiscal year. In the previous fiscal year, net income was $6.9 million or 62 cents per share.

 

The most recent fiscal year included asset impairment and restructuring charges of $1.3 million, while the previous year included asset impairment and restructuring charges of $4 million.

 

Toms said the upcoming year may still be challenging because deferrable purchases such as furniture will be among the last products to benefit from an improved economy.

 

“Although orders picked up in late summer and early fall, most retailers we talk with report continued sporadic traffic and sales,” Toms said. “The uptick in orders last fall was as much a function of retailers restocking lean inventories as it was increased demand, because consumers have not returned to retail stores in large numbers or gone back to historical spending patterns.”

 

He said he has been especially encouraged by the new Envision product line, which targets younger consumers. The line contributed $9 million in sales in just three quarters last year.

 

“Now that the Envision products are established at retail, we believe Envision will have a significant impact on our ability to grow revenues,” said Toms.