Hooker 1Q sales rise 8.9%, net income leaps 32.2%
By Furniture Today Staff -- Furniture Today, April 7, 2002
MARTINSVILLE, Va. — Case goods and occasional manufacturer and importer Hooker Furniture said net sales in the first quarter rose 8.9% to $60.9 million while net income leaped 32.2% to $3.2 million.
Chairman and Chief Executive Officer Paul B. Toms Jr. attributed the increases to improved business conditions at retail and higher incoming order rates that began in the fall of last year.
Increased unit volume, principally in imports, accounted for most of the sales improvement, the company said.
Michael Spece, senior vice president of imports, said imports generated 31% of net sales last year and 33% year-to-date, compared with 28% in 2000. He said Hooker is planning to boost the imported component of its mix by 20% this year.
Still, Hooker is committed to U.S. production because there is a "tremendous opportunity for domestic manufacturers as other companies move offshore," Toms said. He said Hooker's U.S. plants have operated on full schedules for the past six months, with some recent overtime.
Operating income as a percent of net sales improved to 9.1% in the latest quarter, compared to 7.4% in the 2001 period, mostly due to a decrease in the delivered cost of imported furniture. Also, Hooker said it shipped more higher-margin goods, principally imports, as a percentage of total volume.
While business is strengthening, Toms believes it is "too early to say" the furniture industry is in economic recovery. "There is still a fair amount of uncertainty, and some mixed economic signals such as the vacillations of the stock market and relatively high unemployment," he said.
Toms expects a strong April market following an upbeat premarket. "Retailers have seen business trending upward over the last two months, and their inventories are lean," he said.
One of Hooker's main priorities is shortening delivery times on domestic products. From December 2000 to November 2001, the company said it shipped nearly 78% of orders within 30 days of receipt, up from 69% during March to November 2000. During those periods, the 30-day shipping rates for imports were 59.7% and 57.9%, respectively.
Hooker said it will continue to focus on specialization at plants in Martinsville (bedroom and higher-end wall units), Kernersville, N.C. (starting-price walls and entertainment centers), Roanoke, Va. (executive home office), Pleasant Garden, N.C. (computer cabinets and entertainment centers), and Maiden, N.C. (modular home office).
| Quarter ended 2/28 | 2002 | 2001 | Change |
|---|---|---|---|
| Sales | $60,929,000 | $55,924,000 | 8.9% |
| Operating income | 5,552,000 | 4,139,000 | 34.1% |
| Net income | 3,229,000 | 2,443,000 | 32.2% |
| Earnings per share | 0.57 | 0.42 | 35.7% |
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