Q1 2025 Hooker Furnishings Corporation Earnings Call
Okay.
Operator: Good day, and thank you for standing by. Welcome to the Hooker Furnishings First Quarter 2025 Earnings Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message device when your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would like to end the conference over to you speaker today, Paul Huckfeldt, please go ahead.
Speaker Change: Good day, and thank for standing by and welcome to the Hooker furnishings first quarter 2025 earnings webcast. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question during the session I need to press star one on your telephone you all didn't hear an automated message device in your hand. This race to withdraw your question. Please press star one.
Again, please be advised today's conference is being recorded I would like to turn the conference over to speaker today, Paul hooks up. Please go ahead.
Paul A. Huckfeldt: Thanks, Kevin. Good morning, and welcome to our quarterly conference call to review our financial results for the fiscal 2025 first quarter, which ended April 28th, 2024. Joining me this morning is Jeremy Hoff, our chief executive officer. We appreciate your participation.
Speaker Change: Thanks, Kevin.
Speaker Change: And welcome to our quarterly conference call to review our financial results for the fiscal 2025 first quarter, which ended April 28, 2020 for joining me. This morning is Jeremy Hoff, our Chief Executive Officer, We appreciate your participation today.
Paul A. Huckfeldt: During our call, we may make forward-looking statements that are subject to risks and uncertainties. Discussion of factors that could cause our actual results to differ materially from management's expectations is contained in our press release and SEC filing announcing our fiscal 2025 first quarter results. Any forward-looking statement speaks only as of today, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after today's call. This morning, we reported consolidated net sales of $93.6 million for the fiscal 2025 first quarter, a decrease of $28 million, or 23 percent, as compared to last year's first quarter.
Speaker Change: During our call we may make forward looking statements, which are subject to risks and uncertainties a discussion of factors that could cause our actual results to differ materially from management's expectations is contained in our press release and SEC filing announcing our fiscal 2025 first quarter results.
Paul A. Huckfeldt: All three reporting segments experienced sales decreases due to lower demand for home furnishings, which is adversely affecting much of the home furnishings industry. Notably, the absence of $7.5 million in revenue from the Eccentrics Home product line, which we exited during fiscal 2024, accounted for approximately 25% of the consolidated sales. For the quarter, we recorded a consolidated operating loss of $5.2 million and a net loss of $4.1 million, or $0.39 per diluted share.
Paul A. Huckfeldt: Given the current macroeconomic uncertainty, while we expect to be profitable for the current fiscal year and beyond, we're taking a hard look at our spending and our fixed cost structure, and we expect to finalize and implement cost reduction plans in the fiscal 2025 second quarter. We expect to realize a 10% reduction in fixed costs beginning in the second half of fiscal 2025. The cost savings are expected to come from a combination of the consolidation of certain operations and other fixed cost reductions. Now, I'll turn the call over to Jeremy to comment on the fiscal 2025 first quarter results.
Speaker Change: Any forward looking statement speaks only as of today and we undertake no obligation to update or revise any forward looking statements to reflect events or circumstances after today's call.
Speaker Change: This morning, we reported consolidated net sales of $93 6 million for fiscal 'twenty 25, first quarter, a decrease of $28 million or 23% as compared to last year's first quarter.
Speaker Change: All three reporting segments experienced sales decrease was due to lower demand for home furnishings, which is adversely affecting much of the homes person's industry.
Speaker Change: Notably the absence of $7 5 million in revenue from the Eccentrics home product line, which we exited during fiscal 2024 accounted for approximately 25% of the consolidated sales decrease.
Speaker Change: The quarter, we recorded a consolidated operating loss of $5 $2 million and a net loss of $4 1 million or <unk> 39.
Speaker Change: Per diluted share.
Speaker Change: Given the current macroeconomic uncertainty, while we expect to be profitable for the current fiscal year and beyond we are taking a hard look at our spending and our fixed cost structure, and we expect to finalize and implement cost reduction plans in the fiscal 2025 second quarter we.
Speaker Change: We expect to realize a 10% reduction in fixed costs beginning in the second half of fiscal 2025. The cost savings are expected to come from a combination of the consolidation of certain operations at other fixed cost reductions.
Speaker Change: Now I will turn the call over to Jeremy to comment on the fiscal 'twenty 75 first quarter results. Thank you Paul and good morning, everyone year over year industry wide U S furniture store sales compared to the prior year same months have fallen for 14 consecutive months as reported by the U S Census Bureau, our first quarter was disappointing as the industry wide weak demand.
Jeremy R. Hoff: Thank you, Paul, and good morning, everyone. Year over year, industry-wide U.S. furniture store sales compared to the prior year's same months have fallen for 14 consecutive months, as reported by the U.S. Census Bureau. Our first quarter was disappointing as the industry-wide weak demand, which began last year, persisted. While we are disappointed to report a rare operating loss this quarter, the loss was almost entirely driven by sales reductions in each segment, and we strongly believe we'll return to profitability once demand and revenue rebound, although there may be some short-term volatility in earnings.
Speaker Change: <unk>, which began last year persisted, while we are disappointed to report a rare operating loss. This quarter. The loss was almost entirely driven by the sales reductions in each segment and we strongly believe will return to profitability once demand and revenue rebound, although there may be some short term volatility in earnings we remain confident.
Jeremy R. Hoff: We remain confident that the strategies we are pursuing in operations, marketing, and merchandising are transformative. Times like these present an opportunity to recalibrate and even reinvent aspects of our business. Despite the current environment, we believe our investments in new showrooms and expanding our addressable customer base and our focus on our strategic initiatives will help us gain market share. Already, we've seen a nearly 400% increase in traffic and visibility through our expanded showroom footprint.
Speaker Change: That the strategies, we are pursuing in operations marketing and merchandising our transformative times like these present, an opportunity to recalibrate and even reinvent aspects of our business. Despite the current environment, we believe our investments in new showrooms and expanding our addressable customer base and our focus on our strategic initiatives will help us.
Speaker Change: Gained market share.
Speaker Change: Already we've seen a nearly 400% increase in traffic and visibility through our expanded chevron footprints, we see tremendous upside potential to take our flagship Hooker legacy brands product lines from good to great.
Jeremy R. Hoff: We see tremendous upside potential to take our flagship Hooker Legacy brand's product lines from good to great. The addition of Caroline Hippel to the new position of Chief Creative Officer was extremely well received by our retailers, designers, and sales representatives at the recent High Point Market. Her credibility in the industry is significant, and her ability to pull people together for collaboration is powerful. As part of the executive leadership team, she will direct a collaborative merchandising approach across our brands that integrates case goods, upholstery, and outdoor furnishings as well as lighting accessories and accessories. She leads the most talented team I've worked with in my 28-year career in this industry. People always make the difference, which is why we're so confident in our future growth.
Speaker Change: The addition of Carolina Hippo to the new position of Chief Creative Officer was extremely well received by our retailers designers and sales representatives at the recent high point market.
Speaker Change: Her credibility in the industry is significant and her ability to pull people together for collaboration as powerful as part of the executive leadership team. She will directed collaborative merchandising approach across our brands that integrates case goods upholstery and outdoor furnishings as well as lighting accessories and access she leads the most talented team.
Speaker Change: I've worked with in my 28 years 28 year career in this industry people always make the difference which is why we're so confident in our future growth as.
Jeremy R. Hoff: As we bring our divisions into full alignment and move forward in the same creative direction inspired by consumer trends in style, materials, color, and aesthetics, we can become a whole home resource offering a more forward-facing product line and presentation. As Paul mentioned earlier, the current environment has also necessitated adjustments to our cost footprint to align with current and expected medium-term demand through a strategic realignment of operations. While we are still finalizing those plans and expect to have more information sometime in the next quarter, our current projections show a 10% reduction in overall fixed costs, the largest cut in our history.
Speaker Change: As we bring our divisions into full alignment and move forward in the same creative direction inspired by consumer trends and style materials Keller anesthetics, we can become a whole home resource offering a more forward facing product line in presentation.
Speaker Change: As Paul mentioned earlier, the current environment has also necessitated adjustments to our cost footprint to align with current and expected medium term demand through a strategic realignment of operations.
Speaker Change: While we're still finalizing those plans and expect to have more information sometime in the next quarter. Our current projections show a 10% reduction in overall fixed costs the largest cut in our history.
Jeremy R. Hoff: Planned actions include consolidating BOBO into Hooker Branded, further reducing our Georgia warehouse footprint, consolidating certain other operations, and additional fixed cost reductions. We are intensely focused on creating an appropriate expense structure while not jeopardizing the pace and impact of our strategic initiatives, which we believe will have a significant positive impact on Hooker once demand normalizes. We expect to be profitable in the current fiscal year and beyond. Now, I want to turn the discussion over to Paul, who will discuss highlights in each of our segments.
Speaker Change: Planned actions include consolidating bobo into hooker branded further reducing our Georgia warehouse footprint consolidated certain other operations and additional fixed cost reductions were intensely focused on creating an appropriate expense structure, while not jeopardizing the pace and impact of our strategic initiatives, which we believe.
Paul: We will have a significant positive impact on hooker once demand normalizes, we expect to be profitable in the current fiscal year and beyond now I want to turn the discussion over to Paul who will discuss highlights in each of our segments.
Paul A. Huckfeldt: Beginning with the Hooker branded segment, net sales decreased $8 million, or 18%, compared to the prior year first quarter. This decrease was primarily due to decreased unit volume and, to a lesser extent, lower average selling prices, resulting from price reductions implemented late last year in response to lower ocean freight costs. The soft demand across the home furnishings industry led to a 13% decrease in incoming orders during the quarter, with a corresponding 14% decline in backlog compared to the prior year quarter end. However, quarter-end backlog remains 40% higher than pre-pandemic levels at the end of fiscal 2020-2020 first quarter.
Speaker Change: Thanks, Jeremy.
Paul: Beginning with the Hooker branded segment net sales decreased $8 million or 18% compared to the prior year first quarter. This decrease was primarily due to decreased unit volume and to a lesser extent lower average selling prices, resulting from prices reductions implemented late last year in response to lower ocean freight costs.
Paul: The soft demand across the whole pricing against industry led to a 13% decrease in incoming orders during the quarter with a corresponding 14% decline in backlog compared to the prior year quarter end.
Quarter end backlog remains 40% higher than pre pandemic levels at the end of fiscal 2000 22021st quarter.
Paul A. Huckfeldt: At Home Meridian, segment net sales decreased by $15 million, or 37%, in the first quarter. Nearly half of the revenue decline was attributed to the absence of Eccentric's home liquidation sales after exiting that business last year. Excluding liquidation sales, core sales declined about 17 percent.
Paul: At home Meridian segment, net sales decreased by $15 million or 37% in the first quarter.
Paul: Half of the revenue decline was attributed to the absence of eccentrics home liquidation sales after exiting that business last year.
Paul: Excluding the liquidation sales core sales declined about 17% in the quarter.
Paul A. Huckfeldt: The remaining decreases were due to lower sales through major furniture chains and independent furniture stores, driven by anemic industry demand and lower hospitality sales due to the timing of shipping. On a more positive note, fixed overhead costs were reduced by $2 million from business restructuring and reorganization, which included redeploying space at our Georgia warehouse to support Sunset West's East Coast expansion. Incoming orders decreased by 6% during the first quarter, with Samuel Lawrence Hospitality incoming orders more than tripled.
Paul: The remaining decreases.
Paul: Due to lower sales through major furniture chains, and independent furniture stores, driven by anemic industry demand and lower hospitality sales due to timing of shipments.
Paul: On a more positive note fixed overhead costs were reduced by $2 million from business restructuring and reorganization, which included redeploying space at our Georgia warehouse to support Sunset West East Coast expansion.
Paul: Incoming orders decreased by 6% during the first quarter with Samuel Lawrence hospitality incoming orders more than tripling.
Paul A. Huckfeldt: The quarter-end backlog was 22% higher than the same period last year and 37% higher than the fiscal 2024 year-end backlog in January. However, the domestic upholstery segment net sales decreased by 5 million, or 14 percent, in the first quarter due to decreased volume at Braddington Young, HF Customs, and Shenandoah.
Paul: The quarter end backlog was 22% higher than the same period last year and 37% higher than the fiscal 2024 year earn back in January.
Paul: The domestic upholstery segment net sales decreased by $5 million or 14%.
Paul: In the first quarter due to decreased volume at <unk> Young H F customer Shenandoah and contrast.
Paul A. Huckfeldt: In contrast, Sunset West experienced a 20 percent sales increase compared to the previous year's first quarter, attributed to its expansion to the East Coast distribution and the stabilization of its new ERP system over the past year. Additionally, Sunset West saw a 9% increase in incoming orders during the quarter and 31% in May. For much of the last year, Sunset West experienced some speed bumps related to the onboarding of a new computer system and building out the resources and personnel needed to expand its distribution. We think Sunset West is now beginning to hit its stride for a positive trajectory going forward.
Paul: At West experienced a 20% sales increase compared to the previous year first quarter attributed to its expansion to the east coast distribution and the stabilization of its new ERP system over the past year.
Paul: Additionally sets at West saw a 9% increase in incoming orders during the quarter at 31% 31% in May.
Paul: For much of the last year since that west experienced some speed bumps related to the onboarding of a new computer system and building out the resources and personnel needed to expand its distribution. We think sense at west is now beginning to hit its stride for positive trajectory going forward.
Paul A. Huckfeldt: While incoming orders increased by 2.8% for the quarter, quarter-end backlog for this segment decreased compared to the prior year quarter end, but it increased from the fiscal 2024 year; excluding Sunset West, order backlog was 38% higher than pre-pandemic. Reviewing our cash debt and inventory positions, cash and cash equivalents stood at $41 million at the end of the first quarter, a decrease of $2.3 from the end of fiscal 2024. During the first quarter, we used cash on hand and $1.5 million generated from operating activities to fund $2.5 million in cash dividends, $1.3 million to further develop our cloud ERP system, and $800,000 in capital expenditures.
Paul: While incoming orders increased by two 8% for the quarter quarter end backlog for this segment decreased compared to the prior year quarter, and but increased from the fiscal 2020 for year end.
Paul: Excluding sense that west order backlog was 38% higher than pre pandemic levels.
Paul: Reviewing our cash debt and inventory positions with cash and cash equivalents stood at $41 million at the end of the first quarter a decrease of $2 three from the end of fiscal 2024.
Paul: During the first quarter, we used cash on hand, and the $1 $5 million generated from operating activities to fund $2 $5 million in cash dividends $1 3 million to further develop our cloud ERP system at $8 800000 and capital expenditures.
Paul A. Huckfeldt: In addition to the cash balance, we have an aggregate $28.3 million under our existing revolver and $28.7 million in cash surrender value of a company-owned life insurance policy outstanding at the end of the year. Given the uncertainty in the furniture industry and the general economy, our short-term capital allocation strategy is focused on preserving capital until we begin to see an industry turnaround, while also protecting our 50-year-plus history of quarterly dividends and continuing to invest in our organic growth economy.
Paul: In addition to the cash balance we have an aggregate $28 3 million under our existing revolver and $28 7 million in cash surrender value of company owned life insurance policies outstanding at the end of the year.
Paul: Given the uncertainty in the furniture industry in the general economy, our short term capital allocation strategy is focused on preserving capital until we begin to see an industry turnaround. While also protecting our 50 year plus history of quarterly dividend and continuing to invest in our organic growth initiatives.
Paul A. Huckfeldt: We believe we have a conservative balance sheet that can help us weather the current demand environment, but we understand the need for caution in a cyclical industry like ours. Now, I'll turn the call back to Jeremy for his outlook.
Paul: We believe we have a conservative balance sheet, which can help us weather the current demand environment, but we understand the need for caution in a cyclical industry like ours.
Speaker Change: Now I will turn the call back to Jeremy for his outlook. Thank you Paul.
Jeremy R. Hoff: Economic indicators remain mixed, with unemployment continuing under 4% and inflation easing slightly in April, leading to record stock market performance in mid-May. However, the Consumer Sentiment Index fell 10% in May after holding steady for months, indicating a deterioration in optimism across age, income, and education levels. Additionally, in both March and April, existing home sales decreased year over year. We believe stagnant home sales are driven by ongoing interest rates and a low supply of housing, as housing inventories are well below pre-COVID levels. Until the Federal Reserve moves to cut interest rates, we believe the housing industry and, therefore, home furnishings demand will remain subdued.
Jeremy R. Hoff: Economic indicators remained mixed with unemployment continuing under 4% and inflation easing slightly in April leading to a record stock market performance in mid May However, the consumer sentiment index fell 10% in may after holding steady for months, indicating a deterioration and optimism across age income and edge.
Speaker Change: Location levels. Additionally, in both March and April existing home sales decreased year over year. We believe the stagnant home sales are driven by ongoing interest rates and low supply of housing is housing inventories are well below pre COVID-19 levels until the federal reserve moves to cut interest rates, we believe the housing industry and therefore home furnishings demand will remain.
Jeremy R. Hoff: We continue to believe the investments and process improvements we made in the past year will be a springboard to higher sales and profitability. Examples of these investments and improvements include the comprehensive repositioning of Home Redient with the ultimate goal of sustainable profitability when demand returns to normal levels, along with the continued refinement of our strategy, as well as the transformative approach to merchandising we plan to launch across Hooker Legacy brands. Since many fundamentals of the economy are solid and our company is well positioned, we believe we will benefit from an upturn in consumer confidence and industry-wide demand when it occurs. Compared to fiscal year-end in late January, our consolidated backlog is up approximately 19% through the first quarter, and consolidated orders increased by 11%, with orders up across every segment as compared to the previous quarter.
Speaker Change: Subdued we continue to believe the investments and process improvements we made in the past year will be a springboard to higher sales and profitability. Examples of these investments and improvements include the comprehensive repositioning home meridian with the ultimate goal of sustainable profitability when demand returns to normal levels along with the continued re.
<unk> of our strategy as well as the transformative approach to merchandising we plan to launch across Hooker legacy brands. Since many fundamentals of the economy are solid and our company is well positioned we believe we will benefit from an upturn in consumer confidence and industry wide demand when it occurs compared to fiscal year end and.
Speaker Change: January our consolidated backlog is up approximately 19% through the first quarter and consolidated orders increased by 11% with orders up across every segment as compared to the previous quarter. We are encouraged by these increases. This ends the formal part of our discussion and at this time I will turn the call back over to our opt.
Operator: We are encouraged by these increases. This ends the formal part of our discussion, and at this time, I will turn the call back over to our operator, Kevin, for questions. Thank you, ladies and gentlemen. If you have a question or a comment at this time, please use the Q&A function.
Operator: Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 11 on your telephone. If your question has been answered and you find yourself in the queue, please press star 11 again. We'll pause for a moment while we compile our Q&A list. Our first question comes from Anthony Lebiedzinski with Sidonian Company. Your line is open.
Greater Kevin: Greater Kevin for questions. Thank you, ladies and gentlemen, if you have a question or a comment at this time. Please press star one on your telephone. If your question has been answered yourself from queue. Please press star one again, we will pause for a moment, while we compile the Q&A roster.
Operator: Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Speaker Change: Our first question comes from Anthony <unk> with Sidoti <unk> Company. Your line is open.
Anthony Chester Lebiedzinski: Good morning, and thank you for taking the questions. So first, just coming off of, I'll ask more of a forward-looking question, I guess, first, given the timing of your call. So Memorial Day just happened not that long ago. Just curious as to what you're seeing from or hearing from your retail partners in terms of Memorial Day sales, which traditionally has been a big holiday for furniture buying.
Speaker Change: Good morning, and thank you for taking the questions.
Anthony: So firstly just coming off of.
Anthony: I'll ask more of a forward looking question I guess first so given the timing of your call. So.
Speaker Change: Memorial Day just happened.
Speaker Change: Long ago, just curious as to what you're seeing from or hearing from your retail partners in terms of memorial day sales, which traditionally has been a big holiday for a furniture buying.
Jeremy R. Hoff: Yeah, good morning, Anthony. Fairly positive comments from our retail partners. I wouldn't call it a back to normal type of sentiment, but it seems like it's, you know, a little better than what it has been, which has been tough. That's how I would describe it.
Speaker Change: Yes, good morning Anthony.
Speaker Change: Okay fairly positive comments from our retail partners.
Speaker Change: I wouldn't call it back to normal type of <unk>.
Speaker Change: Sentiment, but it seems like it's.
Speaker Change: A little better than what it's been which has been tough as how I would describe it.
Jeremy R. Hoff: Okay, that's good to hear. All right. And so, and I guess, you know, also, in terms of the previously announced growth initiatives, now with the addition of Caroline Hippel, has your thinking, Jeremy, changed in terms of the magnitude of some of those growth initiatives or the timing of those? I know you've previously talked about expanding the interior design sales, e-commerce, and Sunset West, which looks like that particular brand is doing well, but just overall, maybe help us understand as far as, obviously, we know it's a difficult environment now, but as you added some new talent at the top, how are you thinking about the trajectory of some of these growth plans going forward?
Speaker Change: Yes.
Speaker Change: Okay.
Good to hear alright, so I guess.
Speaker Change: Also.
Speaker Change: In terms of the previously announced growth initiatives.
Speaker Change: Now with the addition of Carolina Hippo.
Speaker Change: Yes.
Speaker Change: Thinking Jeremy change in terms of the magnitude of some of those growth initiatives are the timing of those.
Speaker Change: Previously you talked about expanding the interior design sales e-commerce.
Sunset West, which looks like that's that particular brand is doing well, but just overall, but maybe help us understand as far as obviously, we know it's a difficult environment now but.
Speaker Change: As you added some new talent at the top how are you thinking about the trajectory of some of these growth plans going forward.
Jeremy R. Hoff: Well, I'll be in a position to answer that a little more specifically in the coming weeks, but for now, I will tell you that any type of slowdown like we're in right now changes the trajectory of some of those initiatives, and we're working on exactly what that means.
Speaker Change: Well I'll be in position to answer that a little more specifically in the coming weeks, but for now I will tell you that any type of slowdown like we're in right now.
Speaker Change: Changes the trajectory on on some of those initiatives and more working on exactly what that means.
Paul A. Huckfeldt: Okay, gotcha. Okay. And then I guess, you know, in terms of the cost reduction plans that you talked about, how should we think about the quarterly progression of these cost reductions, you know, by quarter in the second half? Is there a specific dollar amount that you can speak to, as far as those costs are involved, as we looked up at our financial models?
Speaker Change: Okay got you, Okay, and then I guess in terms of the cost reduction plans that you talked about.
Speaker Change: How should we think about the <unk>.
Speaker Change: Early progression of these cost reductions by quarter in the second half is there a specific dollar amount that you can speak to as far as.
Speaker Change: Those costs are involved as we look to update our financial models.
Paul A. Huckfeldt: On a run rate basis, you know, we're looking at about 10% of our... Our fixed overhead is around $100 million. And on a run rate basis, we expect that to be about $10 million. Cost Reduction, it's timing wise. I would say... Some will happen in the second quarter, but the third and fourth quarter... We should realize, the better the better part of that, I think. $5 million for the remainder of the year, probably split mostly evenly between the third and fourth quarters.
Speaker Change: On a run rate basis, we're looking at about 10% of our.
Speaker Change: Our fixed overhead is around $100 million.
Speaker Change: And on a run rate basis, we expect that to be about a $10 million.
Cost reduction.
Speaker Change: Timing wise.
Speaker Change: I would say.
Speaker Change: They will be.
Speaker Change: Some will happen in the second quarter, but the third and fourth quarter.
Speaker Change: We should realize.
Speaker Change: The better the better part of that I think.
Speaker Change: $5 million for the remainder of the year, probably split mostly evenly between the third and fourth quarters.
Paul A. Huckfeldt: Okay, that's very helpful, Paul. Thanks for that. I guess, you know, two other quick questions here, I guess, for me before I pass on to others. So, you know, Jeremy, I know you've done a lot to improve HMI, certainly, but, you know, strategically, you know, what are you thinking longer term with this segment?
Speaker Change: Okay, that's very helpful. Paul.
Paul: Thanks for that and then.
Speaker Change: I guess.
Speaker Change: Two other quick questions here I guess for me before I pass on to others. So yes.
Jeremy R. Hoff: Jeremy I know you've done a lot to improve <unk>.
Speaker Change: Certainly.
Speaker Change: But strategically.
Speaker Change: What are you thinking longer term with this segment.
Jeremy R. Hoff: Well, you know. First of all, you're right.
Speaker Change: Well.
Jeremy R. Hoff: We've been trying to do a lot of things to create a structure for the current business and what we feel that business should be from a support stand, you know, overseas, whether that be warehousing. We're very focused, as I've said, on the core brands, being Pulaski, Samuel Lawrence, PRI, and then, of course, our hospitality division. And we believe, and as Paul mentioned, we were down, I think, 17% if you take all the closeouts out of our number in the first quarter, and that's more in line with, I believe, where the industry is.
Speaker Change: <unk>.
Speaker Change: First of all you're right we've been trying to do a lot of things to create a structure for the current business and what we feel that business should be.
Speaker Change: From a support staff overseas, whether that'd be warehousing.
Speaker Change: We've got we're really very focused as I've said on the core brands being Pulaski Samuel Lawrence PRA, and then of course, our hospitality Division and we believe and as Paul mentioned, we were down I think 17%. If you take all the closeouts out of our number in the first quarter and Thats more in line.
Speaker Change: With I believe where the industry is.
Jeremy R. Hoff: So, we're really optimistic about the placements we've been able to get with new products, and we think it's really headed in the right direction, and we think we have a cost structure that is really going to be correct for that growth and give us a chance to really be successful on the bottom line.
Speaker Change: So.
Speaker Change: We're really optimistic on the placements, we've been able to get with new products and we think it's really headed in the right direction and we think we have a cost structure.
Speaker Change: That is.
Speaker Change: Really going to be correct for that growth and give us a chance to really be successful on the bottom line.
Jeremy R. Hoff: Got you. Okay.
Speaker Change: Gotcha, Okay, Alright, and then last question just looking at the balance sheet you guys.
Speaker Change: $22 $5 million of your debt.
Speaker Change: Debt.
Speaker Change: The current portion of your debt. So how are you thinking about this.
Speaker Change: But to refinance that or.
Speaker Change: What are you what are your thoughts there.
Paul A. Huckfeldt: And last question, just looking at the balance sheet, you guys have $22.5 million of your debt in the current portion of your debt. So how are you thinking about this? Do you expect to refinance that? Or what are your thoughts there?
Speaker Change: Well.
Speaker Change: That's correct.
Paul A. Huckfeldt: Well, the debt's current, I mean, I'll... It's going to come out in a few anyway, but because of the operating loss, we missed one of our covenants.
Speaker Change: It's going to come out anyway, but we.
Speaker Change: We missed it because of the operating loss, we witnessed one of our covenants. So while we're working with the bank technically that's accounting rules require us to report that is current.
Paul A. Huckfeldt: So while we're working with the bank, technically accounting rules require us to report that as current. We fully expect, and the bank is working with us, we fully expect to... Revise that credit agreement. We're not sure exactly how we're going to do that yet, We've got several options that we're looking at, and so we expect to be back in compliance, and we'll shift back to the former presentation of about a million, a little over a million dollars in current and the remainder back in non-current starting next quarter. Got it, okay?
Speaker Change: We fully expect and the bank is working with US we fully expect to.
Speaker Change: Revise that credit agreement, we're not sure exactly how we're going to do that yet we've got several options that we're looking at and so we expect to be back in compliance and and will shift back to the former presentation of about $1 million a little over million dollars incurred and the remainder back in non current starting next quarter.
Anthony Chester Lebiedzinski: Got it. Okay. Well, thanks very much, guys, and I appreciate it and best of luck. Thanks, Anthony.
Speaker Change: Got it okay, well, thanks, very much guys I appreciate it and best of luck.
Anthony: Thanks Anthony.
David Joseph Storms: Our next question comes from Dave Storms with Stonegate. Your line is open.
Speaker Change: Our next question comes from Dave stores with Stonegate. Your line is open.
Good morning.
Dave: Good morning, guys good morning.
David Joseph Storms: Just wanted to touch on volumes and pricing. It looks like it's kind of the same story as last quarter, with volumes being the driver and pricing still holding up. How comfortable are you with the pricing overall, given the macro backdrop? Is there any pressure to capitulate on pricing a little bit?
Dave: Just wanted to touch on volumes and pricing it looks like it's kind of the same story as last quarter.
Dave: Volumes.
Speaker Change: The driver.
Speaker Change: Pricing still holding up.
Speaker Change: Comfortable are you with the pricing overall, given the macro backdrop is there any pressure to capitulating on pricing a little bit.
Jeremy R. Hoff: Now, we really don't believe we're in a position where our pricing is an issue across our brands. In fact, we believe we're at a pretty significant value; it's just we need consumer demand to normalize in order for that to happen.
Speaker Change: No we really don't believe we're in a position.
Speaker Change: And where our pricing is an issue across our brands.
Speaker Change: In fact, we believe we're at a pretty significant value. It's just we need the consumer demand to normalize in order for that to happen and discounting typically.
Jeremy R. Hoff: And discounting typically, we do normal discounting, but we don't think that discounting is necessarily the way to drive significant demand without just pulling demand forward.
Speaker Change: We do normal discounting, but we don't think that discounting is necessarily the way to drive significant demand without just pulling demand forward correct.
David Joseph Storms: And then, with the current macro backdrop, should we still expect typical seasonal trends for the year, or are you seeing anything that may throw a wrench into those typical trends?
Speaker Change: Understood very helpful and then.
Speaker Change: With the current macro backdrop should we still expect typical seasonal trends for the year or are you seeing anything that may.
Speaker Change: Zero erection and Theres typical trends.
Jeremy R. Hoff: Right now, I would say that we're expecting some normal seasonal trends throughout the year until, you know, the industry or the economic environment shows us otherwise.
Speaker Change: Yes.
Speaker Change: Right now I would say that we're expecting some normal seasonal trends throughout the year until.
Speaker Change: The industry or the economic environment shows us differently.
David Joseph Storms: Thank you. And then just last one, on the showrooms, it's great to see that foot traffic is consistently increasing. How are you tracking the transition from foot traffic to orders, or is it still too early of an ending to really be thinking about it? That's a really good question, because step one was getting the exposure or visibility we've talked about. Our entire focus right now is on conversion, and that's what you're asking about.
Speaker Change: Very helpful. Thank you and then just last one on the showrooms.
Speaker Change: Great to see that foot traffic CSP consistently increasing how are you tracking the transition from from foot traffic to order.
Speaker Change: Or is it still kind of too early inning.
Speaker Change: To really be thinking.
Speaker Change: So really good question because step one was getting the exposure visibility like we've talked about.
David Joseph Storms: So there's a lot of ways we are trying to do that. But we believe, you know, seeing as many customers or potential customers that we've seen, our execution on the conversion is going to be a big key to our growth. And that's what we have; we're highly focused on that initiative. Very helpful. Thank you for taking my questions and good luck.
Speaker Change: <unk>.
Speaker Change: Our entire focus right now is on conversion and it's what you are asking about so.
Speaker Change: There's a lot of ways, we are trying to do that but we believe.
Speaker Change: <unk> seen as many customers or potential customers that we've seen.
Speaker Change: Our execution on the conversion is going to be a big key to our growth and that's what we're we're highly focused on that initiative.
Speaker Change: That's very helpful. Thank you for taking my questions and good luck in the second quarter.
Speaker Change: Welcome. Thank you.
Budd Bugatch: Our next question comes from Budd Bugatch with Bentley Blue WTR. Your line is open.
Speaker Change: Our next question comes from Budd progressed with <unk>. Your line is open.
Budd Bugatch: Good morning, Jeremy. Good morning, Paul. Thank you for taking my question.
Speaker Change: Good morning, Jeremy Good morning, Paul Thanks for taking my questions.
Jeremy R. Hoff: I just want to make sure I hadn't misinterpreted the language in the release. The backlog at the end of the first quarter, if I calculated looking at 19% above the end of the year, that gets to be about an $85.5 million overall backlog. Is that the right way to read it? That's correct.
Speaker Change: Yes, Sir good morning, good morning, just want to make sure I had misinterpreted.
Speaker Change: Language in the release.
Speaker Change: Backlog at the end of the first quarter, if I calculated looking at 19% above the end of the year that gets to be about $85 $5 million overall backlog is that the way to wait wait wait.
Speaker Change: That's correct.
Jeremy R. Hoff: Okay, and we'll get the segment numbers when you release the cue. Yes.
Speaker Change: Okay, and we'll get the we'll get the segment numbers when you released the Q.
Budd Bugatch: And you said, and again, I want to make sure I understand the order of comparisons versus last year because the numbers that I'm looking at don't necessarily comport with what I heard. How was the order book for the first quarter versus the order book for last year's first quarter? What was the percentage change?
Speaker Change: Yes.
Speaker Change: And you said and again I want to make sure I understand the order comparison versus last year, because the numbers that I'm looking at don't necessarily comport with what I heard how is the auto order book for the first quarter versus the order book for last year's first quarter, what was the percentage change.
Speaker Change: Okay.
Speaker Change: Yes.
Jeremy R. Hoff: Incoming orders are down 6%. 6%.
Speaker Change: Order orders incoming orders were down 6%.
Speaker Change: 6%.
Budd Bugatch: Okay. All right. Thank you. And you said you were regularly profitable for the year and for the obviously years afterwards, and I certainly hope that's correct. Were you at any hazard when that profitability returns to the operating line or to...
Speaker Change: Yes.
Okay Alright. Thank you Andy you said, you expect to be profitable for the year.
Speaker Change: And for the.
Speaker Change: For the obviously the years afterwards, and I certainly hope that's correct.
Speaker Change: Any hazard on when that profitability returns to the operating line or two.
Speaker Change: To us.
Jeremy R. Hoff: You know, there's some volatility, as I mentioned in my, you know, part of the call, in the shorter term, so we feel better definitely right now about our second half than we do about the first half.
Speaker Change: Second.
Speaker Change: There is some volatility as I mentioned in my.
Speaker Change: Part of the call.
Speaker Change: In the shorter term so we.
Speaker Change: We feel better definitely right now about our second half than we do the first half.
Jeremy R. Hoff: Yeah, and the second quarter last year was $97.8 million in overall revenue, right? That's correct. Sounds right. That's correct. Do you think you'll be up year-over-year if you had incoming orders?
Speaker Change: Yes.
Speaker Change: The second quarter last year was $97 $8 million overall revenue right.
Speaker Change: Correct.
Speaker Change: That's correct that's correct.
Speaker Change: Do you think you'll be up year over year. If you had incoming orders are up.
Jeremy R. Hoff: I don't think we're in a position to say that at this point.
Speaker Change: And I don't think we're in a position to say that at this point.
Speaker Change: Little early in the quarter yeah.
Budd Bugatch: So, okay, so, okay, so I understand. I appreciate that, and good luck for the year. And I understand the industry is challenged right now.
Speaker Change: So okay. So okay.
Speaker Change: Okay. So.
Speaker Change: I understand I appreciate that and good luck on the on the year and I understand the industry is.
Budd Bugatch: I appreciate that. Thank you, Bud. Thank you, sir.
Speaker Change: Is challenged right now so.
Brian: Thank you Brian.
Speaker Change: Thank you Sir.
Operator: Again, ladies and gentlemen, if you have a question or a comment at this time, please press star 1-1 on your telephone.
Speaker Change: Again, ladies and gentlemen, if you have a question or comment at this time. Please press star one on your telephone.
Operator: Thank you.
Speaker Change: Two Q4.
Jeremy R. Hoff: And I'm not showing any further questions at this time. I'd like to turn the call back over to Jeremy Hoff for any closing remarks.
Speaker Change: And I'm not showing any further question at this time I'd like to turn the call back over to Jeremy Hall for any closing remarks.
Jeremy R. Hoff: I would like to thank everyone on the call for their interest in Hooker Furnishings. We look forward to sharing our fiscal 25 second quarter results in September. Take care.
I would like to thank everyone on the call for their interest in Hooker furnishings, we look forward to sharing our fiscal 'twenty five second quarter results in September take care, ladies and gentlemen. This does conclude today's presentation. You may now disconnect and have a wonderful day.
Operator: Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Sure.