Hooker Furniture doubles quarterly profit as sales grow 8.8%
Jay McIntosh -- Furniture Today, June 4, 2013
MARTINSVILLE, Va. — An 8.8% sales gain helped propel case goods and upholstery source Hooker Furniture to sharply higher income in the fiscal first quarter ended May 5.
The company reported a profit of $2.1 million or 20 cents per share, a little more than double the $1 million or 9 cents per share posted in the same quarter a year ago.
Officials attributed the earnings gain to higher sales across all operating units, decreased product discounting for case goods, and lower product costs and higher operating profitability for the domestic upholstery operations of Bradington-Young and Sam Moore.
Average selling prices increased in all categories, partially offset by lower unit volume in case goods, which the company said was a result of a reduction in promotional discounting compared with the 2012 quarter.
"The improvements we saw in the second half of last year continued into this quarter with year-over-year increases in orders, shipments and profits for both the case goods and upholstery segments," said Paul Toms Jr., chairman and CEO. "We're trending in the right direction on multiple levels. Our upholstery segment had the best performance in the last several years this quarter and our case goods segment is beginning to grow again. We believe our inventory levels are in the optimum range and retail conditions are stronger than in recent years."
He added that the company achieved a higher profit while absorbing start-up costs of two new business ventures.
"Our new Homeware product line, which is set to launch on two ecommerce websites in late summer, targets young Millennials in the early stages of their careers. The Homeware line features fresh, fashionable furnishings that are parcel delivery shippable and easily assembled in the home with an innovative, patented connector system requiring no tools," Toms said.
"On the other end of the age spectrum, our new H Contract brand, launched in April, caters to retirees moving into senior living facilities, whose ranks are projected to triple in the next 20 years," he said.
He said startup costs in the quarter were about $294,000 after tax or 3 cents per share. For the full year, the company projects startup costs in the range of 12 to 15 cents per share.