Hooker Furnishings Corporation

Good day and thank you for standing by. Welcome to the Hooker Furnishings First Quarter 2025 Earnings Webcast. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I would like to end the conference over to your speaker today. Paul Huckfeldt, please go ahead.

Thank you, Kevin. Good morning and welcome to our quarterly conference call to review our financial results for the fiscal 2025 first quarter, which ended April 28, 2024. Joining me this morning is Jeremy Hoff, our Chief Executive Officer. We appreciate your participation today. During our call, we may make forward-looking statements which are subject to risks and uncertainties. The discussion of factors that could cause our actual results to differ materially from management's expectations is contained in our press release and SEC filing announcing our fiscal 2025 first quarter results. Any forward-looking statement speaks only as of today, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after today's call. This morning, we reported consolidated net sales of $93.6 million for the fiscal 2025 first quarter, a decrease of $28 million, or 23%, as compared to last year's first quarter. All three reporting segments experienced sales decreases due to lower demand for home furnishings, which is adversely affecting much of the homes furnishings industry. Notably, the absence of $7.5 million in revenue from the Eccentrics Home product line, which we exited during fiscal 2024, accounted for approximately 25% of the consolidated sales decrease. For the quarter, we recorded a consolidated operating loss of $5.2 million and a net loss of $4.1 million, or 39 cents per diluted share. Given the current macroeconomic uncertainty, while we expect to be profitable for the current fiscal year and beyond, We're taking a hard look at our spending and our fixed cost structure, and we expect to finalize and implement cost reduction plans in the fiscal 2025 second quarter. We expect to realize a 10% reduction in fixed costs beginning in the second half of fiscal 2025. The cost savings are expected to come from a combination of the consolidation of certain operations and other fixed cost reductions. Now I'll turn the call over to Jeremy to comment on the fiscal 2025 first quarter results.

Thank you, Paul and good morning everyone year over year industry wide us furniture store sales compared to the prior year same months have fallen for 14 consecutive months. As reported by the US Census Bureau our first quarter was disappointing as the industry wide week demand which began last year persisted. While we are disappointed to report a rare operating losses quarter the loss was almost entirely driven by the sales reductions in each segment. and we strongly believe we'll return to profitability once demand and revenue rebound, although there may be some short-term volatility in earnings. We remain confident that the strategies we are pursuing in operations, marketing, and merchandising are transformative. Times like these present an opportunity to recalibrate and even reinvent aspects of our business. Despite the current environment, we believe our investments in new showrooms and expanding our addressable customer base and our focus on our strategic initiatives will help us gain market share. Already, we've seen a nearly 400% increase in traffic and visibility through our expanded showroom footprints. We see tremendous upside potential to take our flagship Hooker Legacy brand's product lines from good to great. The addition of Caroline Hippel to the new position of Chief Creative Officer was extremely well received by our retailers, designers, and sales representatives at the recent High Point Market. Her credibility in the industry is significant and her ability to pull people together for collaboration is powerful. As part of the executive leadership team, she will direct a collaborative merchandising approach across our brands that integrates case goods, upholstery, and outdoor furnishings, as well as lighting accessories and accents. She leads the most talented team I've worked with in my 28-year career in this industry. People always make the difference, which is why we're so confident in our future growth. As we bring our divisions into full alignment and move forward in the same creative direction inspired by consumer trends and style, materials, color, and aesthetics, we can become a whole home resource offering a more forward-facing product line and presentation. As Paul mentioned earlier, the current environment has also necessitated adjustments to our cost footprint to align with current and expected medium-term demand through a strategic realignment of operations. While we're still finalizing those plans and expect to have more information sometime in the next quarter, our current projections show a 10% reduction in overall fixed costs, the largest cut in our history. Planned actions include consolidating Bobo into Hooker Branded, further reducing our Georgia warehouse footprint, consolidating certain other operations, and additional fixed cost reductions. We're intensely focused on creating an appropriate expense structure while not jeopardizing the pace and impact of our strategic initiatives, which we believe will have a significant positive impact on Hooker once demand normalizes. We expect to be profitable in the current fiscal year and beyond. Now I want to turn the discussion over to Paul, who will discuss highlights in each of our segments.