Hooker Furnishings Corp (NASDAQ:HOFT) stock fell 0.33% (As on April 17, 11:20:32 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the fourth quarter of FY 23. HOFT in the fourth quarter of FY 23 has reported the adjusted earnings per share of -$1.60, beating the analysts’ estimates for the adjusted earnings per share by $1.33. The company had reported 2.6 percent fall in the adjusted revenue to $131.3 million in the fourth quarter of FY 23, beating the analysts’ estimates for revenue by $5.49 billion. This is due to a $16.3 million reduction in net sales in the Home Meridian segment. The decrease was partially offset by $6.5 million and $5.3 million net sales increases versus the prior year period in the Hooker Branded and Domestic Upholstery segments, respectively. The Company reported a fourth-quarter operating loss of $23.7 million and net loss of $17.9 million driven by the $24.4 million inventory valuation charge recorded in the fourth quarter of fiscal 2023.

Moreover, for the fiscal year, the Hooker Branded segment’s net sales decreased slightly by $1.1 million, or 0.5%, compared to the peak sales in the prior year after the initial COVID crisis. This segment experienced abnormally low inventory levels in the first quarter of fiscal 2023, due to the COVID-related temporary factory closures in Vietnam in late calendar 2021. Net sales at HMI decreased by $62.6 million, or 22.4%, compared to the prior year. Additionally, this segment recorded an operating loss of $37.2 million, driven by lower sales volume and the $24.4 million inventory valuation charges related to the exit of the ACH business unit, the repositioning of the PRI business, and on excess SLF inventories.

Meanwhile, the company is restructuring and repositioning the Home Meridian business to prioritize the most profitable and stable channels and product categories. As part of this restructuring, the company plans to reduce the physical footprints at the Savannah, GA. Warehouse and High Point, NC administrative office over the course of the current fiscal year. This will reduce the lease, warehousing, and related expenses. By the end of fiscal 2024, the company expects to reduce the working capital requirement by about 60%, which will greatly improve the cash flow return on investment while lowering the overhead at HMI by over $12 million over a 2-year period from the beginning of fiscal 2023.