DALLAS, TX -- April 20th, 2026 --Hooker Furniture Corporation (NASDAQ: HOFT): Stonegate Capital Partners updates their coverage on Hooker Furniture Corporation (NASDAQ: HOFT). HOFT reported revenue, operating income, and adj EPS of $67.0M, $0.6M, and $0.05, respectively. This compares to our/consensus estimates of $77.1M/$74.1M, $1.6M/$1.0M, and $0.09/$0.05. For the quarter, HOFT reported revenue of $67.0M, down 20.5% y/y, driven by a one-week shorter period, lower hospitality shipments, and an estimated $3M-$4M of January weather disruption. Despite the weaker top line, profitability improved, with gross margin up 380bps y/y to 30.0% and continuing ops operating income improving to $0.6M from a loss last year. Within the quarter, Hooker Branded held operating income essentially flat y/y at $1.2M, while Domestic Upholstery reduced its operating loss by more than 50% y/y to $(1.2)M. For the full year, net sales declined 12.4% to $278.1M, while gross margin improved 180bps to 26.4% and SG&A fell $11.9M. Full-year results remained pressured by $15.6M of non-cash impairment charges, contributing to an operating loss of $16.5M and net loss of $27.0M. Overall, we believe continuing operations are showing improved earnings power despite still-soft demand with HOFT well positioned for what we expect to be a strong second half.
Growth Strategy: HOFT spent FY26 simplifying the portfolio and improving profitability at lower revenue levels. The company divested Pulaski Furniture and Samuel Lawrence Furniture, exited lower-margin operations, opened its Asia fulfillment warehouse, and reduced fixed costs by approximately $26.3M, including roughly $17.5M tied to continuing operations. Looking forward, management’s main organic growth lever is Margaritaville, with gallery commitments continuing to build and shipments expected to begin in 2H FY27. In our view, HOFT is emerging as a cleaner, more focused platform where incremental demand should convert more efficiently to earnings.
Outlook/Catalyst: We continue to view the story as an earnings recovery through self-help, rather than a call on a near-term macro rebound. HOFT exited FY26 with consolidated backlog of $43.9M, up from $36.6M a year ago, and management noted orders in Hooker Branded and Domestic Upholstery have increased y/y for three consecutive quarters, adjusted for the extra week in last year’s fourth quarter. From here, we see the key catalysts as: (1) sustained profitability on the lower cost base, (2) conversion of stronger orders/backlog into cleaner sales stabilization, (3) continued improvement in Domestic Upholstery, and (4) the 2H FY27 Margaritaville shipment ramp. While housing and furniture demand remain soft, HOFT appears better positioned to improve earnings even without a sharp recovery in the broader environment.
Balance Sheet & Liquidity: HOFT improved liquidity in FY26, reducing revolver borrowings by $18.5M to $3.6M at year-end and lowering inventory to $48.7M from $66.2M. While reported year-end cash was $1.1M, liquidity improved materially post-quarter, with management noting approximately $12M of cash, $64.1M of borrowing capacity, and no revolver balance as of April 15, 2026. We view the balance sheet as meaningfully cleaner exiting the year.
Valuation: We use a DCF and a EV/EBIT comp analysis to guide our valuation. Our DCF analysis produces a valuation range of $15.87 to $17.93 with a mid-point of $16.81. Our EV/EBIT valuation results in a range of $14.89 to $18.01 with a mid-point of $16.45. Lastly, HOFT pays one of the highest dividend yield of the comp set.
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking services for public and private companies.
SOURCE: Stonegate, Inc.
