Hooker profits off 10.4% as 2Q sales decline 9.7%

Larry Thomas -- Furniture Today, September 10, 2012

MARTINSVILLE, Va. - Hooker Furniture said profits fell 10.4% in the second fiscal quarter on lower sales in its case goods and upholstery businesses.
     The company said it recorded a profit of $1.47 million or 14 cents per share in the quarter ended July 29. That was down from $1.65 million or 15 cents per share in the same quarter in 2011.
     Sales totaled $50.2 million, a drop of 9.7% from $55.6 million in last year's second fiscal quarter.
     "We're disappointed in our sales performance so far this year, but pleased that we have been able to achieve comparable to higher profitability on lower sales for both case goods and upholstery," said Paul Toms Jr., chairman and CEO. "We've maintained profitability by improving our domestic upholstery manufacturing operations and by managing costs. In addition, we believe we are now positioned to stabilize and grow sales again."
     Toms said the company is almost re-stocked on its bestselling products, and is preparing to ship several new, well-received collections that will be debuting on retail floors during the historically strong fall selling season.
     "Demand for case goods remains subdued, with incoming orders decreasing in the high single digit range during the second quarter compared to the same period last year, but we are encouraged that incoming order rates for upholstery were up 12% year over-year in the second quarter," he said.
     For the first six months of the fiscal year, sales totaled $101.9 million, a drop of 10.6% from $114 million in the first half of the previous fiscal year.
     Six-month net income was $2.49 million or 23 cents per share. That was up 15% from $2.17 million or 20 cents per share in the first half of the previous year.
     Toms said the company is closely monitoring labor negotiations involving East Coast dockworkers, who could go on strike when their contract expires Sept. 30. He said Hooker increased orders from its Asian suppliers five months ago in order to mitigate the impact of a strike, and said the company expects to receive twice the normal amount of inventory prior to the contract expiration date.