Hooker Furniture profit rises 7.7% on 4.8% sales gain
Larry Thomas -- Furniture Today, December 4, 2012
MARTINSVILLE, Va. — Hooker Furniture said profits jumped 7.7% in the quarter ended Oct. 28 on a 4.8% increase in sales.
The case goods and upholstery resource said both of its business segments recorded increases in orders and shipments during the quarter, with the biggest gains in its Sam Moore and Bradington-Young upholstery lines.
Sam Moore was helped by brisk demand for its new line of fully upholstered sofas, while the import division of leather upholstery resource Bradington-Young also had a noteworthy increase.
The company said the improved profitability was driven by reduced discounting, lower costs and greater domestic manufacturing efficiency.
Sales for the quarter, the third quarter of Hooker's fiscal year, totaled $56.8 million. That was up from $54.2 million in the same quarter last year.
Net income totaled $2.43 million or 23 cents per share. That was up from $2.26 million or 21 cents per share in last year's third fiscal quarter.
Paul Toms, chairman and CEO, said the company's in-stock position and service levels improved during the quarter, which should provide additional top-line benefits in the coming months.
"Our improved in-stock position should also drive higher sales from special orders at retail," he said. "We've also been gratified that the Rhapsody Collection we introduced last spring has been performing well at retail since it began shipping in September, and other collections also are retailing well."
For the nine months ended Oct. 28, sales fell 5.6% to $156.7 million, but net income rose 11.3% to $4.93 million or 46 cents per share.
"We were able to increase net income over 11% for the first nine months of the year on lower sales, which indicates greater efficiency, particularly in upholstery manufacturing," said Toms. "We believe there's room for further improvement."
Toms said that while he has short-term concerns that consumers may postpone big-ticket purchases until the "fiscal cliff" is resolved in Washington, his long-term outlook is more bullish.
"Longer term, there are many positive signs for the housing sector, with increased housing activity, prices stabilizing and the highest homebuilder sentiment in six years," he said. "Consumer confidence is improving to more historically healthy levels driven by improvements in housing and gains in the stock market this year. All this bodes well for our industry longer term."