Hooker Furniture's profits nearly double despite sales dip
Larry Thomas -- Furniture Today, December 7, 2011
MARTINSVILLE, Va. — Hooker Furniture said profits nearly doubled in the quarter ended Oct. 30, despite a 2.8% drop in sales.
The case goods and upholstery manufacturer and importer credited the improved bottom line to a variety of cost controls, particularly selling and administrative expenses, which decreased as a percentage of sales and in absolute terms compared with the same quarter in 2010.
Net income for the latest quarter, the third quarter of Hooker's fiscal year, totaled $2.26 million or 21 cents per share. That compares with $1.17 million or 11 cents per share in the same quarter last year.
Sales totaled $54.2 million, down from $55.7 million in the comparable period last year.
"While we're disappointed we weren't able to post positive year-over-year sales growth for the quarter, we're pleased ... to have achieved the best overall profitability performance in the last seven quarters, despite the slight sales dip," said Paul Toms, chairman and CEO.
Toms attributed the sales decline to soft consumer demand, lower unit volume and higher product discounting. That was partially offset by higher average selling prices due to the mix of products that were shipped.
For the nine months ended Oct. 30, sales totaled $168.1 million, an increase of 4.8% from the same period in 2010.
Nine-month net income was $4.43 million or 41 cents per share. That's up 29.4% from $3.42 million or 32 cents per share in the comparable period last year.
The most recent net income figures include a pre-tax charge of $233,000 to write down leasehold improvements related to the relocation and consolidation of its showroom space at the International Home Furnishings Center in High Point.
Toms said consumer demand softened noticeably between April and September, but said there has been an improvement in incoming orders during the past 60 days. He said products introduced at the April High Point Market are now hitting retail floors, and that should have a positive impact on sales in the fourth quarter and beyond.
"While we're not bullish about the overall economy in the near term, we are bullish about our opportunity to further improve profitability and our competitive position in the industry," he said.