Shares of Hooker Furnishings Corp. (HOFT) plunged 18% in light premarket trading Friday, marking their worst one-day performance since June 2019. The renowned maker of furniture and home decor products cited downbeat fiscal second-quarter results as the reason for the decline.
According to Chief Executive Jeremy Hoff, the overall soft demand in the industry can be attributed to retailers continuing to sell excessive inventory and a temporary oversupply of heavily discounted home furnishings in the market.
In the quarter ending July 30, the company’s net income drastically dropped to $785,000, or 7 cents per share, from $5.5 million, or 46 cents per share, during the same period last year. Furthermore, sales witnessed a significant decline of 36.0%, amounting to $97.8 million.
The average estimates of two analysts surveyed by FactSet projected earnings per share of 18 cents and sales of $127.2 million, which the company could not meet.
Despite these underwhelming results, Hooker Furnishings Corp. remains optimistic about the future. The company expects demand to pick back up in the second half of the year, as orders have been on an upward trend for the past few months.
Over the past three months leading up to Thursday, the company’s stock has shown a promising increase of 25.3%. In comparison, the S&P 500 has only gained 3.7%.
Stay tuned for updates on Hooker Furnishings Corp.’s progress in the coming months.