Hooker Furnishings Corporation

Good day, and thank you for standing by. Welcome to the Hooker Furnishings Fourth Quarter 2026 earnings webcast. At this time, all participants are in 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're willing to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Earl Armstrong, Senior Vice President and Chief Financial Officer. Please go ahead.

Thank you, Tanya, and good morning, everyone.

Welcome to our quarterly conference call to review financial results for the fiscal 2026 fourth quarter and full year. Our 2026 fiscal year began on February 3rd, 2025, and the fourth quarter began on November 3rd, 2025. both periods ending on February 1st, 2026. Joining me today 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. A discussion of the factors that could cause our actual results to differ materially from our expectations is contained in our press release and SEC filing announcing our fiscal 2026 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. During the fourth quarter, we completed the previously announced sale of the Pulaski Furniture and Samuel Lawrence Furniture case goods brands, part of our former Home Meridian segment. Consolidated net sales from continuing operations were $67 million, a decrease of 17.2 million or about 21% compared to the prior year period. The decline was partially attributable to the current fourth quarter being one week shorter than the prior year period, which reduced net sales by approximately 5.5 million based on average daily sales. The decrease also reflects lower sales in our hospitality business due to its project-based nature, as several large projects shipped in the prior year did not recur in the current year. Additionally, we estimate severe winter weather experienced in January 26 in a significant part of the United States and in most of our largest markets reduced net sales for the quarter by $3 to $4 million. Despite lower net sales, we reported operating income of $629,000 for the quarter. This was driven by operating income of $1.2 million in hooker branded and $617,000 in all other, partially offset by an operating loss of $1.2 million in domestic upholstery. Notably, despite one week less of sales in severe winter weather, domestic upholstery reduced its operating loss by more than half, compared to a $2.5 million loss in the prior year fourth quarter. Hooker branded operating income was consistent with the prior year period, despite fewer selling days and the weather disruptions. Net income from continuing operations for the fourth quarter was $874,008 per diluted share. Following the divestiture of Pulaski and Samuel Lawrence on December 12th of last year, results of these businesses are reported through that date. Discontinued operations incurred a net loss of $338,000 in the quarter. Consolidated net income for the fourth quarter was $536,000, or 5 cents per diluted share. For the full fiscal year of 2026, net sales from continuing ops were $278.1 million, a decrease of $39.2 million, or 12.4% compared to the prior year. This decline was primarily driven by lower sales in the hospitality business within all other, and to a lesser extent, a shorter fiscal year and the severe winter weather we mentioned earlier. Gross profit declined in absolute dollars due to lower sales. However, gross margin improved by 180 basis points, reflecting margin improvements in the hooker-branded and domestic upholstery segments. Continuing operations reported an operating loss of $16.5 million for fiscal 26, primarily due to $15.6 million in non-cash intangible asset impairment charges recorded in the third quarter, triggered by our stock price as of the end of the third quarter. These included $14.5 million related to Goodwill and the Sunset West Division, and $556,000 related to the Braddington Young trade name, both within domestic upholstery, as well as $558,000 related to the remaining HMI business and all others. Additionally, continuing operations incurred approximately $2 million in restructuring costs, primarily related to severance, to a lesser extent warehouse consolidation, all as part of our completed cost reduction initiatives. Net loss when continuing operations was $12.8 million, or $1.20, per diluted share. Discontinued operations included approximately 10 months of activity in fiscal 26, Sales declined due to ongoing macro pressures and tariff-related purchasing hesitancy among its customers, particularly large furniture retailers. Discontinued ops incurred a pre-tax loss of $19 million, including $3.9 million in restructuring costs, of which $2.4 million related to the Savannah warehouse exit. A $6.9 million loss from classification is held for sale, which included $2.6 million of trade name impairment, $3.5 million in fair value write-downs, and $735,000 in selling costs. Discontinued operations also incurred $1 million in bad debt expense related to a customer bankruptcy. Consolidated net loss for fiscal 26 was $27 million or $254 per diluted share. Now I'll turn the call over to Jeremy for his comments on our fiscal 26 fourth quarter and full year results.