Hooker Furnishings Corporation

Good day and thank you for standing by. Welcome to the Hooker Furnishings Corp first quarter 2027 earnings conference call. 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'll need to press star 11 on your telephone. You will then hear an automated message advising 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 speaker today, Earl Armstrong, Senior Vice President and Chief Financial Officer. Sir, please go ahead.

Thank you, Michelle, and good morning, everyone. Welcome to our quarterly conference call to review financial results for the fiscal 2027 first quarter. Our 2027 first quarter began on February 2nd, 2026, and ended on May 3rd, 2026. Joining me today is Jeremy Hoff, our Chief Executive Officer. We appreciate your participation. During our call, we may make forward-looking statements which are subject to risks and uncertainties. A 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 2027 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. Despite continued weakness in the housing market, soft retail demand for furniture and home furnishings, and persistent macroeconomic challenges, we delivered net income of $1.1 million for the quarter, reflecting the benefits of our cost reduction initiatives, improved gross margin performance, and ongoing progress toward a leaner, higher margin operating model. Consolidated net sales decreased 1.7 million, or 2.4%, compared to the prior year period. The decrease was primarily driven by lower sales in the hooker branded and domestic upholstery segments, partially offset by higher shipments in the all other components hospitality business. Despite the sales decrease, profitability improved significantly. The consolidated gross profit increased by $2.7 million, while gross margin improved 440 basis points compared to the prior year period. This improvement was primarily driven by stronger profitability in Hooker Branden. For the quarter, the company generated operating income of $1.6 million compared to an operating loss of $498,000 in the prior year period, representing a $2.1 million improvement. Consolidated net income was $1.1 million or $0.10 per diluted share. These results reflect the benefit of improved gross margin, prior cost reduction initiatives, and our continued focus on building a more efficient and profitable business model. Now I'll turn the call over to Jeremy for his comments on our fiscal 2027 first quarter results.

Thank you, Earl, and good morning, everyone. We are encouraged to report $1.1 million in consolidated net income for the quarter, marking a $4.1 million improvement over the prior year first quarter. These results were achieved despite a challenging demand environment characterized by depressed housing activity and low consumer confidence. The improvement reflects the benefit of the $17.5 million reduction in fixed costs related to continuing operations that we achieved in the prior year, as well as continued progress toward a more efficient operating model. From a segment perspective, Hooker Branded performed exceptionally well despite lower sales compared to the prior year, supported by stronger gross margin performance. Domestic upholstery's results continue to be impacted by lower sales volume, but were supported by operational efficiencies implemented late last year. Looking forward, Retailer commitments to Margaritaville products, galleries, and freestanding stores continue to exceed our expectations with meaningful shipments expected to begin in the second half of fiscal 27. We are also encouraged by the positive retailer response and commitments to products debuted at the April 26 High Point Market. During market, we introduced Hooker Custom Upholstery, bringing together the Sam Moore and Bradenton Young brands under a unified platform. This updated market approach combines these upscale product lines under a unified premium hooker custom upholstery identity supported by a refreshed showroom presentation, enhanced marketing efforts, and a mix of new introductions and established products. The initiative is further supported by the capabilities of our new website launched in February 26. Once market conditions improve, We believe this strategy will ultimately drive higher sales by creating a more cohesive brand narrative and presenting all offerings under the Hooker name, which carries the strongest brand recognition across our portfolio. Now I want to turn the discussion back over to Earl, who will discuss highlights in each of our segments, along with our cash, debt, inventory, and capital allocation strategy.