Hooker Furnishings Corp (NASDAQ:HOFT) stock rose 1.68% (As on June 13, 11:22:53 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the first quarter of FY26. The Company lowered its operating loss by $1.6 million, or 31%, from the prior year first quarter to $3.6 million, driven by cost-saving initiatives launched in the second half of last year and despite reduced net sales in the quarter. The Company reduced operating expenses by $2.2 million versus the prior year first quarter. This reduction occurred despite the first quarter fiscal 2026 results including $523,000 in restructuring costs, primarily severance. Hooker’s legacy brands sales were stable, with Hooker Branded net sales increasing slightly by 0.8%, driven by higher unit volume, while the Domestic Upholstery Segment saw a slight 3.7% sales decrease, compared to the prior year first quarter, respectively. Hooker Branded achieved breakeven profitability for the quarter, while Domestic Upholstery and Home Meridian significantly narrowed operating losses by $713,000 (55%) and $584,000 (17%), respectively, from the prior year period.

Moreover, the gross margin improved by 180 bps, maintaining overall gross profit levels despite lower net sales. The Company recorded a net loss of $3.1 million, or ($0.29) per diluted share, an improvement from a $4.1 million loss, or ($0.39) per diluted share in the prior year first quarter. Hooker Furnishings began stocking inventory in a leased warehouse in Vietnam during the quarter. This facility allows retail customers to mix product collections in containers, improving product flow, inventory turns, and margin potential. Cash and cash equivalents stood at $18 million, an increase of $11.7 million from the year-end, due primarily to accounts receivable collections. Inventory levels decreased from $70.8 million at year-end to $64.3 million at quarter-end.

HOFT in the first quarter of FY26 has reported the adjusted loss per share of 29 cents, beating the analysts’ estimates for the adjusted loss per share of 9 cents. The company had reported the adjusted revenue decline of 8.8 percent to $85.3 million in the first quarter of FY26, missing the analysts’ estimates for revenue of $92.85 million. The overall decrease in consolidated sales was primarily driven by a double-digit sales decrease at HMI, which is positioned in the mid-price segment where import tariffs have more sharply curtailed demand.

In fiscal 2026, Hooker expects to realize about $14 million in cost savings net of offsets and special charges. By fiscal 2027, Hooker Furnishings expects to realize $25 million in net annualized savings through these phased initiatives, enhancing profitability, operational efficiency, and long-term shareholder value.