Q4 2025 Hooker Furnishings Corp Earnings Call
To ask a question. During this session you will need to press star one one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question Press Star. One one again please be advised that today's conference is being recorded I would now like the conference over to your Speaker, Mr. Earl Armstrong.
Speaker Change: Senior Vice President and Chief Financial Officer. Please go ahead.
Earl Armstrong: Thank you Sherry and good morning, everyone welcome to our quarterly conference call to review financial results for the fiscal 2025 fourth quarter and full year.
Earl Armstrong: Of which ended February 2025, joining me. This morning is Jeremy Hoff, our Chief Executive Officer, We appreciate your participation today.
Earl Armstrong: 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 'twenty five results any forward looking statement speaks only as of today and we undertake no.
Earl Armstrong: <unk> to update or revise any forward looking statement to reflect events or circumstances after today's call.
Earl Armstrong: Consolidated net sales for the fourth quarter increased by $7 7 million, an approximate 8% gain over the previous year's fourth quarter. The current quarter included 14 weeks compared to 13 weeks of the prior year's fourth quarter.
Earl Armstrong: On a consolidated basis the additional week in the current period drove the increase contributing approximately $7 7 million to consolidated net sales, however, hooker branded and home Meridian sales increased by 2% and 13% respectively based on average net sales per shipping day.
Earl Armstrong: These gains were partially offset by a $2 million or 7% decrease in sales at domestic upholstery.
Earl Armstrong: Significant charges in the fourth quarter included $1 3 million in end of life inventory write downs related to the planned exit of our Savannah facility 878000, and noncash trade name impairment charges 718000, and bad debt expense related to a large customer bankruptcy. That's in addition to two.
Earl Armstrong: 4 million recorded in the third quarter and about 200000 related to our previously announced cost reduction plan.
Earl Armstrong: These $3 1 million in charges drove a consolidated operating loss of $2 7 million and a net loss of $2 3 million or about 22 per diluted share for the fourth quarter.
Earl Armstrong: For fiscal 'twenty five consolidated net sales were $397 5 million, a decrease of $35 8 million or eight 3% compared to the previous fiscal year. All three reportable segments experienced sales decreases driven by continued weak demand a depressed housing market and broader macroeconomic concern.
Earl Armstrong: Certainties impacting nearly the entire home furnishings industry consolidated operating loss was $18 1 million for the year, primarily due to $10 eight two due to lower sales volumes and $10 8 million in charges, including four not in restructuring costs related to our cost reduction plan $3 $1 million.
Earl Armstrong: Bad debt expense from our major customers bankruptcy and $2 8 million in noncash trade name impairment charges.
Earl Armstrong: Validated net loss amounted to $12 5 million or $1 19 per share.
Earl Armstrong: We expect fiscal 'twenty six cost savings of about $1 million from the Savannah warehouse exit announced last month net of associated transition cost, we expect annualized cost savings of four to $5 7 million beginning in fiscal 'twenty seven.
Earl Armstrong: Exact amount of savings is dependent upon the ultimate timing of the exit at the same time, we are finalizing the estimates of the potential financial impact of the Savannah warehouse exit currently we expect to record net charges of between 3 million to $4 million in fiscal 'twenty. Six in addition to the $10 million in annual.
Earl Armstrong: <unk> cost savings in fiscal 'twenty, five and expected to be realized in fiscal 'twenty. Six we expect additional annualized cost savings of between $8 million to $10 million, which we anticipate will be realized over the next fiscal year with full benefits being felt in fiscal 'twenty seven.
Earl Armstrong: The completion of our cost reduction plans as expected by the second half of fiscal 'twenty six the total of these two initiatives are expected to save the company between 18% and $20 million now I'll turn the call over to Jeremy to comment on our fiscal 'twenty five fourth quarter and full year results. Thank you Earl and good morning, everyone Hooker furnishing demonstrated.
To withdraw your question Press Star one one again, please be advised that today's conference is being recorded I would now like thinking of the conference over to your Speaker, Mr. Earl Armstrong Senior Vice President and Chief Financial Officer. Please go ahead.
Jeremy Hoff: Resilience this year with important accomplishments despite extremely difficult conditions in the home furnishing space that persist with few signs of improvement in the near impossible and medium term, we are focused on gaining market share and creating a pathway for profitability, regardless of how long the furniture retail downturn persist.
Thank you Sherry and good morning, everyone welcome to our quarterly conference call to review financial results for the fiscal 2025 fourth quarter and full year, both of which ended February <unk> 2025. Joining me. This morning is Jeremy Hoff, our Chief Executive Officer, We appreciate your participation today.
Jeremy Hoff: Despite the operating loss our milestones in fiscal 'twenty five included the Margaritaville licensing agreement the launch of Hooker branded new merchandising strategy Sunset West East Coast expansion key inventory investments and share gains amid a tough market.
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 'twenty five results any forward looking statement speaks only as of today and we undertake no.
Jeremy Hoff: We were encouraged to report improved sales in the fourth quarter, even considering the extra week Hooker branded and home Meridian sales increased according to an independent industry analysis, we had year over year market share growth of 3% to 15 basis points in each of the first three quarters of fiscal 'twenty, five and hookers legacy divisions.
<unk> to update or revise any forward looking statement to reflect events or circumstances after today's call.
Jeremy Hoff: With fourth quarter data is still pending these gains built on a consistent trend of sequential market share gains in every quarter of fiscal 'twenty four.
So holiday to net sales for the fourth quarter increased by $7 7 million, an approximate 8% gain over the previous year's fourth quarter. The current quarter included 14 weeks compared to 13 weeks of the prior year's fourth quarter.
Jeremy Hoff: This consistent share growth. Despite a contracting high end segment reinforces the competitive advantages, we've built and our readiness to capitalize when demand rebounds, while macroeconomic headwinds, including the weakest housing market in 50 years, lower consumer confidence and tariff uncertainties persist we remain.
On a consolidated basis the additional week in the current period drove the increase contributing approximately $7 7 million to consolidated net sales, however, hooker branded and home Meridian sales increased by 2% and 13% respectively based on average net sales per shipping day.
Earl Armstrong: Focused on what we can control excluding the charges Earl just mentioned our financial performance improved sequentially each quarter of the year.
These gains were partially offset by a $2 million or 7% decrease in sales at domestic upholstery.
Earl Armstrong: Due to the continued economic environment, we've accelerated cost reduction initiatives, which we believe will improve operating income and cash flow.
Significant charges in the fourth quarter included $1 3 million in end of life inventory write downs related to the planned exit of our Savannah facility 878000, and noncash trade name impairment charges 718000, and bad debt expense related to a large customer bankruptcy. That's in addition to two.
Earl Armstrong: These include our planned exit of the Savannah warehouse, which is expected to say four to $5 7 million annually beginning in fiscal 2007, and the opening of a new leased facility in Vietnam. This may when fully operational the Vietnam warehouse were reduced domestic safety stock needs improved product flow enabled <unk>.
4 million recorded in the third quarter and about 200000 related to our previously announced cost reduction plan.
Earl Armstrong: <unk> mixing support margin expansion and enable a speeder speedier return on investment combined with other efforts. We expect expect to begin to realize a portion of the $18 million to $20 million in total annual operating expense savings in fiscal 'twenty six with full annualized expected cost savings beginning in fiscal 'twenty seven.
These $3 1 million in charges drove a consolidated operating loss of $2 7 million and a net loss of $2 3 million or about 22 per diluted share for the fourth quarter.
For fiscal 'twenty five consolidated net sales were $397 5 million.
Now I want to turn the discussion back over to Earl who will discuss highlights in each of our segments. Thank you Jeremy Hooker branded fourth quarter net sales rose $3 8 million or 10% from the prior quarter driven by a 14% increase in unit volume operating income was $1 1 million down from $3 5 million a year ago, but.
Earl Armstrong: Improved from losses.
Earl Armstrong: In the first three quarters of fiscal 'twenty five for fiscal 'twenty five net sales decreased $10 1 million or six 5% due to a five 7% drop in average selling prices and increased discounting partially offset by a nearly 3% rise in volume.
Earl Armstrong: Fourth quarter orders rose, 15% year over year reversing the trend of three quarters of decreases yearend backlog fell 22% driven mostly by a significantly improved in stock position, which should help to ship goods faster.
Earl Armstrong: Turning to home Meridian fourth quarter net sales increased $6 3 million or 21, 7% year over year, driven by strong hospitality sales offsetting softness.
Earl Armstrong: And traditional channels gross profit for the quarter Rose $2 4 million to $8 1 million with gross margin, reaching nearly 23% the highest 620 since 2016, despite the $618000 inventory write down tied to the Savannah exit.
Earl Armstrong: The segment reported a $500000 operating loss despite $2 2 million in charges recorded comprised of 618000 inventory write down we mentioned 718000 additional bad debt and 878000 and trade name impairment fiscal 'twenty five net sales decreased $12 7 million.
Earl Armstrong: Around 9% due to a nearly 30% drop in volume was 78% of the decrease tied to the exit of unprofitable lines.
Earl Armstrong: Orders in backlog also decreased amid continued pressure in mega in traditional channels.
Earl Armstrong: And the domestic upholstery segment.
Earl Armstrong: Fourth quarter, net sales decreased $2 million or about 7% year over year due to soft demand across HFF custom Robinson young and Shenandoah as well as seasonal softness at Sunset West fiscal 'twenty five net sales were down $12 6 million or about 10% with decreases across most divisions, partly offset.
Earl Armstrong: By a six 8% increase at Sunset West.
Earl Armstrong: The segment posted a $2 $5 million operating loss driven by lower volume under absorbed overhead and $80000 severance costs fourth quarter orders rose, 13% with double digit growth at brining to the young HFF customer Sunset West.
Earl Armstrong: Since it West has now posted four consecutive quarters of order growth driven by the expansion of its east coast distribution yearend backlog was 4% below last year, but 3% above pre pandemic levels when excluding sunset west since they were acquired after that time.
Earl Armstrong: Cash and cash equivalents stood at $6 3 million a decrease of $36 9 million from the previous year and this decrease was largely due to an increase in accounts receivable and a strategic increase in inventory levels with hooker branded accounting for most of that inventory increase.
Operator: There will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 1 1 again.
Consistent trend of sequential market share gains in every quarter of fiscal 'twenty for this.
This consistent share growth. Despite a contracting high end segment reinforces the competitive advantages, we've built and our readiness to capitalize when demand rebounds, while macroeconomic headwinds, including the weakest housing market in 50 years, lower consumer confidence and tariff uncertainty persist we remain.
Earl Armstrong: Italy, we utilized our cash reserves for several key expenditures during fiscal 'twenty five cash dividends to shareholders development of our cloud based ERP system and other capital expenditures as of yesterday, our cash stood at nearly $19 million with 41 million in available borrowing capacity under our new amended and restated loan agreement.
Operator: Please be advised that today's conference is being recorded.
Sherri: I would now like to hand the conference over to your speaker, Mr. Earl Armstrong, Senior Vice President and Chief Financial Officer. Please go ahead. Thank you, Sherri. Good morning, everyone.
Speaker Change: Focused on what we can control excluding the charges Earl just mentioned our financial performance improved sequentially each quarter of the year due to the continued economic environment, we've accelerated cost reduction initiatives, which we believe will improve operating income and cash flow.
Earl Armstrong: Welcome to our quarterly conference call to review financial results for the fiscal 2025 fourth quarter and full year, both of which ended February 2, 2025.
Earl Armstrong: We strategically increased inventory in the fourth quarter to support three major new case goods collections and replenish our most profitable high velocity items.
Earl Armstrong: Joining me this morning is Jeremy Hoff, our Chief Executive Officer. We appreciate your participation. 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 25 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.
Earl Armstrong: This positioned us to improve product availability and speed to market.
Speaker Change: These include our planned exit of the Savannah warehouse, which is expected to say four to $5 7 million annually beginning in fiscal 2007, and the opening of a new leased facility in Vietnam. This may when fully operational the Vietnam warehouse were reduced domestic safety stock needs improved product flow enabled <unk>.
Earl Armstrong: In the second half of fiscal 'twenty five in early fiscal 'twenty six while also mitigating expected supply disruptions from potential port strikes in the United States and an extended lunar new year in Vietnam.
Jeremy Hoff: We also refinanced our credit facility in the fourth quarter, which increased our borrowing capacity in March we announced a regularly regular quarterly dividend, reflecting our ongoing confidence in the company's outlook and extending our over 50 year track record of uninterrupted dividend payments now I will turn the discussion back to Jeremy for his outlook.
Speaker Change: <unk> mixing support margin expansion and enable a speeder speedier return on investment combined with other efforts. We expect expect to begin to realize a portion of the $18 million to $20 million in total annual operating expense savings in fiscal 'twenty six with full annualized expected cost savings beginning in fiscal 2007.
Earl Armstrong: Consolidated net sales for the fourth quarter increased by $7.7 million, an approximate 8% gain over the previous year's fourth quarter. The current quarter included 14 weeks, compared to 13 weeks of the prior year. On a consolidated basis, the additional week and the current period drove the increase, contributing approximately $7.7 million to consolidated net sales. However, Hooker Branded and Home Meridian sales increased by 2% and 13% respectively, based on average net sales per shipping. These gains were partially offset by a $2 million or 7% decrease in sales at domestic upholstery.
There is a lot of economic uncertainty and volatility right. Now we are currently evaluating a range of strategies to mitigate the current economic environment, including a 50 year low and existing home sales and the possible impact of potential additional reciprocal tariffs on our operations and profitability tariffs add tremendous complexity and <unk>.
Speaker Change: Now I want to turn the discussion back over to Earl who will discuss highlights in each of our segments. Thank you Jeremy Hooker branded fourth quarter net sales rose $3 8 million or 10% from the prior quarter driven by a 14% increase in unit volume operating income was $1 1 million down from $3 5 million a year ago, but.
Jeremy Hoff: Certainty they require us to look at our cost structure more aggressively, particularly on the lower margin direct container side of our business.
Speaker Change: Improved from losses.
Speaker Change: In the first three quarters of fiscal 'twenty five for fiscal 'twenty five net sales decreased $10 1 million or six 5% due to a five 7% drop in average selling prices and increased discounting partially offset by a nearly 3% rise in volume.
Jeremy Hoff: Sequentially. In addition to the cost savings, we previously announced and those we covered today, we continue to identify additional opportunities to gain efficiency by consolidating operations and we will provide more information in the coming weeks, while evaluation of our cost footprint and implementation of further cuts are both ongoing we continue to.
Earl Armstrong: Significant charges in the fourth quarter included $1.3 million in end-of-life inventory write-downs related to the planned exit of our Savannah facility, $878,000 in non-cash trade name impairment charges, $718,000 in bad debt expense related to a large customer bankruptcy. That's in addition to $2.4 million recorded in the third quarter and about $200,000 related to our previously announced cost reduction plan.
Speaker Change: Fourth quarter orders rose, 15% year over year reversing the trend of three quarters of decreases yearend backlog fell 22% driven mostly by a significantly improved in stock position, which should help to ship goods faster.
Jeremy Hoff: First in the highest growth potential areas of our business is growing profitable sales remains an intense focus on a positive note inflation cooled in February March falling to levels experienced last summer and fall before it rose from November 24th of January 25. Additionally, According to U S census Bureau year over year monthly furniture sales increase beginning in.
Speaker Change: Turning to home Meridian fourth quarter net sales increased $6 3 million or 21, 7% year over year, driven by strong hospitality sales offsetting softness.
Earl Armstrong: These $3.1 million in charges drove a consolidated operating loss of $2.7 million and a net loss of $2.3 million or about 22 cents per diluted share for the fourth quarter.
Speaker Change: September 24, while the current environment is challenging we believe we have positioned the company to continue gaining market share and maximizing revenues through our merchandising efforts speed to market initiatives and in stock position on top selling products. This ends the formal part of our discussion and at this time I will turn the call back over to our operator Sri for <unk>.
Speaker Change: And traditional channels gross profit for the quarter Rose $2 4 million to $8 1 million with gross margin, reaching nearly 23% the highest 620 since 2016, despite the $618000 inventory write down tied to the Savannah exit.
Earl Armstrong: For Fiscal 25, consolidated net sales were $397.5 million, a decrease of $35.8 million, or 8.3% compared to the previous fiscal year. All three reportable segments experienced sales decreases driven by continued weak demand, a depressed housing market and broader macro economic uncertain uncertainties impacting nearly the entire home furnishings Consolidated operating loss was $18.1 million for the year, primarily due to lower sales volumes and $10.8 million in charges, including $4.9 in restructuring costs related to our cost reduction plan, $3.1 million in bad debt expense from a major customer's bankruptcy. $3.8 million in non-cash trade name impairment charges.
Speaker Change: The segment reported a $500000 operating loss despite $2 2 million in charges recorded comprised of 618000 inventory write down we mentioned 718000 additional bad debt and 878000 and trade name impairment fiscal 'twenty five net sales decreased $12 7 million.
Jeremy Hoff: <unk>.
Speaker Change: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.
John: John Your question Press Star one again, one moment, while we compile the Q&A roster.
Speaker Change: Around 9% due to a nearly 30% drop in volume was 78% of the decrease tied to the exit of unprofitable lines.
Anthony: And our first question will come from the line of Anthony <unk> with Sidoti <unk> Co. Your line is now open.
Speaker Change: Orders in backlog also decreased amid continued pressure in mega in traditional channels.
Earl Armstrong: Consolidated net loss amounted to $12.5 million for $1.19 per share. We expect fiscal 26 cost savings of about $1 million from the Savannah Warehouse exit announced last month, net of associated transition cost. We expect annualized cost savings of $4 to $5.7 million beginning in fiscal 27. The exact amount of savings is dependent upon the ultimate timing of the exit. At the same time, we are finalizing the estimates of the potential financial impact of the Savannah Warehouse Exit. Currently we expect to record net charges of between $3 million to $4 million in fiscal 2020. In addition to the $10 million in annualized cost savings in FY 25 and expected to be realized We expect additional annualized cost savings of between $8 to $10 million, which we anticipate will be realized over the next year.
Speaker Change: Hey, good morning, Jeremy and good morning, Garo. Thank you for taking the questions.
Speaker Change: And the domestic upholstery segment.
Speaker Change: So it's certainly nice to see the sales improvements at Hooker branded <unk>.
Speaker Change: Fourth quarter, net sales decreased $2 million or about 7% year over year due to soft demand across HFF custom Robinson young and Shenandoah as well as seasonal softness at Sunset West fiscal 'twenty five net sales were down $12 6 million or about 10% with decreases across most divisions, partly offset.
Speaker Change: You guys talked about the HMA benefiting from strong hospitality sales just wondering if you could further comment on the HOKA brand, whether youre seeing any additional traction from some new collections, maybe just give some more insight into what drove the unit volume increase hooker branded and we'd love to get your.
Speaker Change: By a six 8% increase at Sunset West.
Speaker Change: The segment posted a $2 $5 million operating loss driven by lower volume under absorbed overhead and $80000 severance costs fourth quarter orders rose, 13% with double digit growth at brining to the young HFF customer Sunset West.
Speaker Change: Take on what Youre seeing so far in Q1.
Speaker Change: As we now have only about two weeks left in the first quarter.
Speaker Change: So far.
Speaker Change: First of all the part about hooker branded and what's driving some of the momentum.
Speaker Change: West has now posted four consecutive quarters of order growth driven by the expansion of its east coast distribution.
Speaker Change: Definitely October market had a significant.
Speaker Change: Positive impact, particularly on Hooker case goods, we brought out to.
Speaker Change: <unk> backlog was 4% below last year, but 3% above pre pandemic levels when excluding sunset west since they were acquired after that time.
Earl Armstrong: the full benefits being felt.
Earl Armstrong: Completion of our cost reduction plans is expected by the second half of Fiscal 26. The total of these two initiatives are expected to save the company between $18 and $20 million.
Speaker Change: Two new collections that.
Speaker Change: Really performed well in the in the early parts with placements in early orders and early sell through so we're very encouraged by that.
Speaker Change: Cash and cash equivalents stood at $6 3 million a decrease of $36 9 million from the previous year and this decrease was largely due to an increase in accounts receivable and a strategic increase in inventory levels with hooker branded accounting for most of that inventory increase.
Jeremy Hoff: Now I'll turn the call over to Jeremy to comment on our fiscal 25 fourth quarter and full year results. Thank you, Earl. And good morning, everyone. Hooker Furnishings demonstrated resilience this year with important accomplishments despite extremely difficult conditions in the home furnishing space that persist with few signs of improvement in the near and possibly medium term. We are focused on gaining market share and creating a pathway for profitability, regardless of how long the furniture retail downturn persists. Despite the operating loss, our milestones in Fiscal 25 included the Margaritaville licensing agreement, the launch of Hooker Branded's new merchandising strategy, Sunset West East Coast expansion, key inventory investments, and share gains amid a tough market.
Speaker Change: Especially in the environment, we've been in to to have that type of impact with two new collections, we were encouraged.
Speaker Change:
Speaker Change: I don't believe I can get into more and more of the first quarter, yet sorry Anthony.
Speaker Change: Additionally, we utilized our cash reserves for several key expenditures during fiscal 'twenty five cash dividends to shareholders development of our cloud based ERP system and other capital expenditures as of yesterday, our cash stood at nearly $19 million with $41 million in available borrowing capacity under our new amended and restated loan agreement.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Okay, and then as far as domestic upholstery.
Speaker Change: So.
Speaker Change: I know you guys.
Speaker Change: You said that that was down as far as.
Speaker Change: We strategically increased inventory in the fourth quarter to support three major new case goods collections and replenish our most profitable high velocity items.
Speaker Change: Given the tariff announcements two weeks ago, just wondering how you guys think about the opportunities there as some.
Speaker Change: This positioned us to improve product availability and speed to market.
Speaker Change: Retailers look to perhaps.
Jeremy Hoff: We were encouraged to report improved sales in the fourth quarter. Even considering the extra week, Hooker branded and home reading sales increased. According to an independent industry analysis, we had year-over-year market share growth of three to 15 basis points in each of the first three quarters of fiscal 25 in Hooker's legacy divisions, with fourth quarter data still pending. These gains build on a consistent trend of sequential market share gains in every quarter of fiscal 25. This consistent share growth, despite a contracting high-end segment, reinforces the competitive advantages we've built in our readiness to capitalize when demand reaches its peak.
In the second half of fiscal 'twenty five in early fiscal 'twenty six while also mitigating expected supply disruptions from potential port strikes in the United States and an extended lunar new year in Vietnam. We also refinanced our credit facility in the fourth quarter, which increased our borrowing capacity in March we announced our regularly.
Speaker Change: A shift there.
Speaker Change: Sources to the domestic manufacturing.
Speaker Change: So just wondering how you guys think about the potential opportunity for domestic upholstery.
Speaker Change: We think it's a tremendous opportunity on the domestic upholstery side.
Speaker Change: For obvious reasons that you pretty much just stated.
Speaker Change: We have really.
Speaker Change: Regular quarterly dividend, reflecting our ongoing confidence in the company's outlook and extending our over 50 year track record of uninterrupted dividend payments now I will turn the discussion back to Jeremy for his outlook.
Speaker Change: Quite a bit of capacity, if we need it in the B Y and we also in Bedford HFF customs. So.
Speaker Change: We're in a position that we could definitely.
Jeremy Hooker: There's a lot of economic uncertainty and volatility right. Now we are currently evaluating a range of strategies to mitigate the current economic environment, including a 50 year low and existing home sales and the possible impact of potential additional reciprocal tariffs on our operations and profitability tariffs add tremendous complexity and <unk>.
Speaker Change: We're in a position to grow and we're doing some things product wise program wise that I believe are going to be well timed with that.
Jeremy Hoff: While macroeconomic headwinds, including the weakest housing market in 50 years, lower consumer confidence and tariff uncertainty persist, we remain focused on what we can control. Excluding the charges Earl just mentioned, our financial performance improves sequentially each quarter of the year. Due to the continued economic environment, we've accelerated cost reduction initiatives, which we believe will improve operating income and cash flow. These include our planned exit of the Savanna Warehouse, which is expected to save $4 to $5.7 million annually beginning in Fiscal 27, and the opening of a new leased facility in Vietnam this May. When fully operational, the Vietnam Warehouse will reduce domestic safety.
Speaker Change: That momentum coming their way.
Speaker Change: Gotcha, Okay, and then as far as the <unk>.
Speaker Change: Obviously, you guys have done a nice job they're repositioning that.
Jeremy Hooker: Certainty they require us to look at our cost structure more aggressively, particularly on the lower margin direct container side of our business.
Speaker Change: Business gross margin was up nicely.
Jeremy Hooker: Consequently in addition to the cost savings, we previously announced and those we covered today, we continue to identify additional opportunities to gain efficiency by consolidating operations and we will provide more information in the coming weeks, while evaluation of our cost footprint and implementation of further cuts are both ongoing we continue to.
Speaker Change: Yeah I suppose.
Speaker Change: Tariffs now add it at a wrinkle, but just just just kind of thinking about how do you think the.
Speaker Change: Gross margins in that segment will go from here and then just a separate question on the backlog.
Speaker Change: For <unk> I know, there's been a lot of changes to that business.
Jeremy Hooker: First in the highest growth potential areas of our business is growing profitable sales remains an intense focus on a positive note inflation cooled in February March falling to levels experienced last summer and fall before it rose from November 24th of January 25. Additionally, According to U S census Bureau year over year monthly furniture sales increase beginning in.
Speaker Change: Over the last couple of years with.
Speaker Change: Product lines, changing and sales channels, so I guess on a like to like basis.
Jeremy Hoff: Please see the complete disclaimer at https://sites.google.com. Combined with other efforts, we expect to begin to realize a portion of the $18 to $20 million in total annual operating expense savings in Fiscal 26, with full annualized expected cost savings beginning in Fiscal 27.
Speaker Change: What would be the backlog if you strip out all the noise in terms of the changes how would that compare to pre pandemic levels for the backlog.
Jeremy Hooker: September 24, while the current environment is challenging we believe we have positioned the company to continue gaining market share and maximizing revenues through our merchandising efforts speed to market initiatives and in stock position on top selling products. This ends the formal part of our discussion and at this time I will turn the call back over to our operator Sri for <unk>.
Speaker Change: I don't believe we have that I can I can answer the first part of that which is.
Earl Armstrong: Now I want to turn the discussion back over to Earl, who will discuss highlights in each of our segments. Thank you, Jeremy. At Hooker branded, fourth quarter net sales rose $3.8 million, or 10% from the prior quarter, driven by a 14% increase in unit volume. Operating income was $1.1 million, down from $3.5 million a year ago, but improved from loss.
Speaker Change: There's a lot of focus on the right things at <unk>, which I think is showing through in the in the margin expansion.
Speaker Change: You know that there is an intense focus on growing Pulaski and on growing Samuel Lawrence furniture, we don't have any focus on you know like.
Jeremy Hooker: Questions.
Sri: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.
Speaker Change: The clubs, we got out of in the ACTH business Eccentrics home business that we got out of and it's we're not focused on loading up the warehouse with inexpensive low margin <unk> at this point. So there's a lot of really good focus and candidly thats why were able to save the between four and $5 7 million on getting out of Savannah because.
Earl Armstrong: in the first three quarters of fiscal 25. For fiscal 25, net sales decreased 10.1 million or 6.5% due to a 5.7% drop in average selling prices and increased discounting, partially offset by a nearly 3% rise in volume. Fourth quarter orders rose 15% year-over-year, reversing the trend of three-quarters of the year. Year-end backlog fell 22%, driven mostly by a significantly improved in-stock position, which helped us ship goods faster. Turning the whole meridian fourth quarter net sales increased 6.3 million or 21.7% year over year, driven by strong hospitality sales, offsetting softness. Introduce Gross profit for the quarter rose $2.4 million to $8.1 million, with gross margin reaching nearly 23 percent, the highest since 2016.
Sri: To withdraw your question Press Star one again, one moment, while we compile the Q&A roster.
Speaker Change: And our first question will come from the line of Anthony <unk> with Sidoti <unk> Co. Your line is now open.
Speaker Change: 80% of that need and Savannah was based on storing or warehousing inexpensive low margin accident. So so we're able to really more utilized CDC one CDC two in Marksville and we.
Anthony: Hey, good morning, Jeremy and good morning, Garo. Thank you for taking the questions.
Speaker Change: So it's certainly nice to see the sales improvements at Hooker branded <unk>.
Speaker Change: Talked about the Vietnam warehouse as well that we're working on so our logistics in our warehousing.
Speaker Change: I know you guys talked about the HMA benefiting from strong hospitality sales just wondering if you could further comment on that.
Speaker Change: We believe will substantially go down from a financial footprint, but serve us better than it has.
Speaker Change: Hooker branded whether youre seeing any additional traction from some new collections, maybe just give some more insight into what drove the unit volume increase.
Speaker Change: Understood. Okay, well, thank you very much and best of luck. Thank you Anthony we appreciate it.
Speaker Change: Brandon.
Speaker Change: Would love to get your take on what Youre seeing so far in Q1.
Speaker Change: Thank you one moment our next question.
Earl Armstrong: Despite the $618,000 inventory write-down tied to the Savannah XRP. The segment reported a $500,000 operating loss, despite $2.2 million in charges recorded, comprised of the $618,000 inventory write-down we mentioned, $718,000 in additional bad debt, and $878,000 in trade name appearances. Fiscal 25 net sales decreased $12.7 million, or around 9%, due to a nearly 30% drop in volume, with 78% of the decrease tied to the exit of unprofitable lines.
Speaker Change: And that will come from the line of David storms with Stonegate. Your line is open.
Speaker Change: As we now have only about two weeks left in the first quarter.
David Storms: Good morning, Thank you for taking my questions.
Speaker Change: So.
Jeremy Hooker: First of all the part about hooker branded and what's driving some of the momentum.
Speaker Change: Just wanted to start with the current 90 day tariff pause does this.
Jeremy Hooker: Definitely October market had a significant.
David Storms: <unk> ability or.
David Storms: Give me any.
David Storms: Desire to be maybe a little more nimble and continue to do strategic inventory build.
Jeremy Hooker: Positive impact, particularly on Hooker case goods, we brought out to.
Jeremy Hooker: Two new collections that.
David Storms: Good question, we were in because we had as we said we had taken our inventories, particularly up in hooker branded which is call. It an 85% to 90% warehouse domestic warehouse footprint, we had already strategically increased that inventory and that was it.
Jeremy Hooker: Really performed well in the in the early parts with placements in early orders and early sell through so we're very encouraged by that.
Earl Armstrong: Orders and backlog also decreased amid continued pressure in MEGA and traditional... of the Domestic Upholstery Segment. 4th quarter net sales decreased $2 million or about 7% year-over-year due to soft demand across HF Custom, Braddington Young, and Shenandoah, as well as seasonal softness at Sunset West. Fiscal 25 net sales were down $12.6 million or about $2.5 million. year-end backlog was 4% below last year, but 3% above pre-pandemic levels when excluding Sunset West since they were acquired after that Cash and cash equivalents stood at $6.3 million, a decrease of $36.9 million from the previous year end. This decrease was largely due to an increase in accounts receivable and a strategic increase in inventory levels, with Hooker Branded accounting for most of that inventory.
Jeremy Hooker: Especially in the environment, we've been in to to have that type of impact with two new collections, we were encouraged.
David Storms: That was a little bit lucky and well timed for the situation.
Jeremy Hooker:
Jeremy Hooker: I don't believe I can get into more and more of the first quarter, yet I'm sorry Anthony.
David Storms: But we also.
David Storms: Are able to manage this a little easier with the Vietnam footprint, we talked about because we can hold product there depending on where this goes and be ready to.
Jeremy Hooker: Okay.
Jeremy Hooker: Okay, and then as far as domestic upholstery.
Jeremy Hooker: So.
David Storms: Phil our warehouse and four to six weeks lead time versus a six month lead time once we're able to see what actually happens next.
Jeremy Hooker: I know you guys.
Jeremy Hooker: You said that that was down as far as.
Jeremy Hooker: Given the tariff announcements two weeks ago, just wondering how you guys think about the opportunities there as some.
Understood very helpful. And then I also just wanted to talk you mentioned a couple times in the prepared remarks, the press release mentioned it.
Jeremy Hooker: Retailers look to perhaps.
David Storms: The strong market share gains you've had over the last year.
Jeremy Hooker: A shift there.
Jeremy Hooker: Sources to domestic.
Jeremy Hooker: Domestic manufacturing.
David Storms: The main drivers really look at this and.
Jeremy Hooker: So just wondering how you guys think about the potential opportunity for domestic upholstery.
David Storms: Additionally, going forward the ability to kind of keep growing at this three to 15 basis points pace.
Jeremy Hooker: We think it's a tremendous opportunity on the domestic upholstery side.
David Storms: Well, we expect that we believe that will improve meaning those are fairly small numbers. They are improvement, but we believe it is.
Jeremy Hooker: For obvious reasons that you pretty much just stated.
Jeremy Hooker: We have really.
Jeremy Hooker: Quite a bit of capacity, if we need it in the B Y and we also in Bedford HFF customs. So.
David Storms: Can do better than that we were pleased that we werent going backwards in this environment, which is why we started tracking market share in the first place in an environment like this it's very difficult to know.
Jeremy Hooker: We're in a position that we could definitely.
Jeremy Hooker: We're in a position to grow and we're doing some things product wise program wise that I believe are going to be well timed with.
Earl Armstrong: Additionally, we utilized our cash reserves for several key expenditures during FY25, cash dividends to shareholders, development of our cloud-based ERP system, and other capital expenditures. As of yesterday, our cash stood at nearly $19 million, with $41 million in available borrowing capacity under our new amended and restated loan agreement. We strategically increased inventory in the fourth quarter to support three major new case goods collections and replenish our most profitable high-velocity items. This positioned us to improve product availability and speed to market. in the second half of Fiscal 25 and early Fiscal 26, while also mitigating expected supply disruptions from potential court strikes in the United States and an extended Lunar New Year in Vietnam.
David Storms: Are you doing well or not doing well where is your where is your business because when things are down like they are everything seems bad and you can't see what's actually going on so.
Jeremy Hooker: That momentum coming their way.
We're pleased to have that information so that we can address what we need to address.
Jeremy Hooker: Gotcha, Okay and then.
Jeremy Hooker: As far as the HMA so.
Jeremy Hooker: So.
David Storms: But I think we continue with the merchandising strategy. This collective living that we're doing which really just means our legacy companies working together with one powerful powerful presentation versus just a wood bedroom or a dining room shown by itself you have upholstery that goes with it occasionally.
Jeremy Hooker: Obviously, you guys have done a nice job, they're repositioning that business gross margin was up nicely.
Jeremy Hooker: Yeah.
Jeremy Hooker: I suppose that the tariffs now add it at a wrinkle, but just just just kind of thinking about how do you think.
Jeremy Hooker: The gross margins in that segment.
Jeremy Hooker: We will go from here and then just a separate question on the backlog.
David Storms: Goes with it and we have all of those capabilities, which is also what makes Margarita Bill that's upcoming October market. So powerful because that's really where our strengths are when you combine everything together and that really showed through I mentioned the two collections. We did very well in October well those were two of our first true collective living.
Jeremy Hooker: For <unk> I know, there's been a lot of changes to that business.
Jeremy Hooker: Over the last couple of years with.
Earl Armstrong: We also refinanced our credit facility in the fourth quarter, which increased our borrowing capacity. In March, we announced our regular quarterly dividend, reflecting our ongoing confidence in the company's outlook and extending our over 50-year track record of uninterrupted dividend repayment.
Jeremy Hooker: Product lines, changing and sales channels, so I guess on a like to like basis.
Jeremy Hooker: Okay.
David Storms: Launches, which showed that when you have I'll just give an example, when you have a sofa the perfectly goes with a collection. It makes it very easy for our retail partners to say, yes, I'll take that just like it is and I'll put it on my floor, whereas they don't have to figure out okay. What can I put this with and a lot of times, if you leave it up to.
Jeremy Hooker: What would be the backlog if you strip out all the noise in terms of the changes how would that compare to pre pandemic levels for the backlog.
Jeremy Hoff: Now I'll turn the discussion back to Jeremy for his outline. There's a lot of economic uncertainty and volatility right now. We're currently evaluating a range of strategies to mitigate the current economic environment, including a 50 year low in existing home sales, and the possible impact of potential additional reciprocal tariffs on our operations and profitability.
Jeremy Hooker: I don't believe we have that I can I can answer the first part of that which as you know theres a lot of focus on the right things at <unk>, which I think is showing through in the in the margin expansion.
David Storms: The partner you know theyre going to put something that's not our company because they'll find something else outside of Hooker legacy companies to put with it. So it's really that to me is a very powerful direction for us and it somewhat prove that in October.
Jeremy Hooker: Yes.
Jeremy Hooker: And intense focus on growing Pulaski and on growing Samuel Lawrence furniture, we don't have any focus on.
Jeremy Hoff: Tariffs add tremendous complexity and uncertainty that require us to look at our cost structure more aggressively, particularly on the lower margin direct container side of our Consequently, in addition to the cost savings we previously announced and those we covered today, we continue to identify additional opportunities to gain efficiency by consolidating operations and will provide more information in the coming While evaluation of our cost footprint and implementation of further cuts are both ongoing, we continue to invest in the highest growth potential areas of our business as growing profitable sales remains an intense focus. On a positive note, inflation cooled in February and March, falling to the levels experienced last summer and fall before it rose from November 24 to January 25.
Jeremy Hooker: Like the clubs, we got out of in the HTH business Eccentrics home business that we got out of and it's we're not focused on loading up the warehouse with inexpensive low margin cheap access at this point. So there's a lot of really good focus and candidly thats why were able to save the between four and $5 7 million on getting out of Savannah because.
Speaker Change: Understood Thats great color. Thank you.
Speaker Change: And then maybe just one more modeling question.
Speaker Change: With the new cost savings announced in anticipation that they will be fully up and running by fiscal 2027 any sense of the pacing for us is it going to be kind of gradual hilton or fits and starts I mean any color there would be great.
Jeremy Hooker: <unk>.
Jeremy Hooker: 80% of that need and Savannah was based on you know storing or warehousing inexpensive low margin accidents. So so we're able to really more utilized.
Speaker Change: And we Werent sure I didn't I couldn't understand your question could you. Please ask one more time I'm sorry.
Speaker Change: Yes apologies.
Jeremy Hooker: <unk>, one <unk>, two and Martinsville, and we talked about the Vietnam warehouse as well that we're working on so our logistics in our warehousing. We believe will substantially go down from a financial footprint, but serve us better than it has.
Speaker Change: Just around the pacing of the cost savings plan to 2027.
Oh, you are at a high level of pace the pace of the cost savings plan is that what youre asking about yes, yes, okay. So I.
Jeremy Hoff: Additionally, according to the U.S. Census Bureau, year-over-year monthly furniture sales increased beginning in While the current environment is challenging, we believe we have positioned the company to continue gaining market share and maximizing revenues through our merchandising efforts, feed-to-market initiatives, and in-stock position on top-selling products.
Speaker Change: I think the way to look at it I think if you back up and say, Okay. Total company spend was $109 million going into two years ago budgeted. We are 10 million savings we achieved throughout last year. It takes us to where we're a budget at $99 million and overall spend and then over this year.
Jeremy Hooker: Understood. Okay, well, thank you very much and best of luck. Thank you Anthony we appreciate it.
Jeremy Hooker: Thank you one moment our next question.
Speaker Change: And that will come from the line of David storms with Stonegate. Your line is open.
Operator: This ends the formal part of our discussion, and at this time, I will turn the call back over to our operator, Cherie, for Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, press star 1-1 again. One moment while we compile the Q&A roster.
David Storms: Good morning, Thank you for taking my questions.
Speaker Change: Include Savannah, and everything we're talking about we're working on getting towards that 8% to $10 million, which puts us which puts us in more of an $89 million to $91 million overall spend which is really back to equivalent to what fiscal 'twenty two roughly was so.
Speaker Change: Just wanted to start with the current 90 day tariff pause does this.
Speaker Change: Inability or.
Give you any.
Speaker Change: Desire to be maybe a little more nimble and continue to do strategic inventory build.
Speaker Change: Good question, we were in because we had as we said we had taken our inventories, particularly up in hooker branded which is call it 85% to 90% warehouse domestic warehouse footprint, we had already strategically increased that inventory and that was it.
Speaker Change: We're pretty encouraged by that especially being that we have with the Savannah exit minimum $4 million of that already already taken care of and we're working on the rest of that pretty hard and then I mentioned, we're looking at other things to become more efficient companywide and we will have more information on that.
Anthony Lebiedzinski: And our first question will come from the line of Anthony Lebiedzinski with Sidoti & Co. Your line is open. Good morning, Jeremy, and good morning, Earl. Thank you for taking the questions. It's really nice to see the sales improvements at Hooker Branded and HMI. I know you guys talked about HMI benefiting from strong hospitality sales.
Speaker Change: That was a little bit lucky and well timed for the situation.
Speaker Change: In the coming weeks.
But we also.
Speaker Change: That help.
Speaker Change: Are able to manage this a little easier with the Vietnam footprint, we talked about because we can hold product there depending on where this goes in and be ready to full.
Jeremy Hoff: Just wondering if you could further comment on Hooker Branded, whether you're seeing any additional traction from some new collections, maybe just give some more insight into what drove the unit volume increase at Hooker Branded, and we'd love to get your take on what you're seeing so far in Q1, as you now have only about two weeks left in the first quarter. So, first of all, the part about, you know, Hooker branded and what's driving some of the momentum, definitely October market had a significant impact. positive impact, particularly on Hooker case goods. We brought out two new collections that really performed well in the early parts with placements and early orders and early sell-throughs.
Speaker Change: That's very helpful. Thank you for taking my questions and good luck with absolutely. Thank you.
Speaker Change: Thank you I'm showing no further questions at this time I would now like to turn the call back over to Jeremy Hoff for any closing remarks.
Speaker Change: Phil our warehouse and four to six weeks lead time versus a six months lead time once we're able to see what actually happens next.
Speaker Change: I would like to thank everyone on the call for their interest in Hooker furnishings, we look forward to sharing our fiscal 'twenty six first quarter results in June take care.
Speaker Change: Understood very helpful. And then I also just wanted to talk you mentioned a couple times in the prepared remarks, the press release mentioned it.
Speaker Change: Thank you all for participating. This concludes today's program you may now disconnect.
Speaker Change: Strong market share gains you've had over the last year.
Speaker Change: The main drivers to really look at this and.
Speaker Change: Additionally, going forward the ability to kind of keep growing at this three to 15 basis points pace.
Speaker Change: Well, we expect that we believe that will improve meaning those are fairly small numbers. They are improvement, but we believe we can do better than that we were pleased that we werent going backwards in this environment, which is why we started tracking market share in the first place in an environment like this.
Jeremy Hoff: So we're very encouraged by that, especially in the environment we've been in, to have that type of impact with two new collections. We were encouraged.
Speaker Change: It's very difficult to know.
Jeremy Hoff: I don't believe I can get into more of the first quarter yet, sorry to answer that. Okay, uh...
Speaker Change: Are you doing well or not doing well where is your where is your business because when things are down like they are everything seems bad and you can't see what's actually going on so.
Speaker Change: We're pleased to have that information so that we can address what we need to address but.
Jeremy Hoff: Okay, and then as far as domestic upholstery... So... I know you guys, you know, said that that was down as far as, you know, given the the tariff announcements two weeks ago, just wondering how you guys think about the opportunities there as to some. you know, retailers look to perhaps, you know, shift their sources to domestic manufacturing. Just wondering how you guys think about the potential opportunity for domestic upholstery.
Speaker Change: But I think we continue with the merchandising strategy. This collective living that we're doing which really just means.
Speaker Change: Our legacy companies working together with one powerful powerful presentation versus just a wood bedroom or a dining room showing by itself you have upholstery that goes with it occasionally that goes with it and we have all of those capabilities, which is also what makes Margarita bill that's upcoming October market, so powerful because.
Speaker Change: That's really where our strengths are as when you combine everything together and that really showed through I mentioned the two collections. We did very well in October well those were two of our first true collective living.
Jeremy Hoff: We think it's a tremendous opportunity on the domestic upholstery side, for obvious reasons that you pretty much just stated. You know, we have really quite a bit of capacity, you know, if we need it in the BY and also in Bedford, HF Customs. So, you know, we're in a position that we could definitely. We're in position to grow, and we're doing some things product-wise, program-wise that I believe are going to be well-timed with that momentum coming their way. Gotcha. Okay.
Speaker Change: Launches, which showed that when you have I'll just give you. An example, when you have a sofa that perfectly goes with the collection. It makes it very easy for our retail partners to say, yeah, I'll take that just like it is and I'll put it on my floor, whereas they don't have to figure out okay. What can I put this with and a lot of times, if you leave it up to.
Speaker Change: The partner you know theyre going to put something that's not our company because they'll find something else outside of Hooker legacy companies to put with it. So it's really it that to me is a very powerful direction for us and it somewhat prove that in October.
Jeremy Hoff: And then, you know, as far as HMI, you know, so obviously you guys have done a nice job there repositioning that business, you know, gross margin was up nicely. Yeah.
Speaker Change: Understood Thats great color. Thank you.
Jeremy Hoff: I suppose that the tariffs now added wrinkle, but just kind of thinking about like, how do you think the gross margins in that segment will go from here?
Speaker Change: And then maybe just one more modeling question with.
Speaker Change: With the new cost savings announced and the anticipation that they will be up and running by fiscal 'twenty tweets happen any sense of the pacing for us is it going to be kind of gradual hilton or fits and starts any any color there would be great.
Jeremy Hoff: And then just a separate question on the backlog, you know, for HMI, I know there's been a lot of changes to that business over the last couple of years with the product lines changing and sales channels. So I guess on the like-to-like basis, you know, what would be the backlog, you know, if you strip out all the noise in terms of the changes, how would that compare to pre-pandemic levels for the backlog? I don't believe we have that.
Speaker Change: And we Werent sure I didn't I couldn't understand your question.
Speaker Change: Please ask one more time I'm sorry.
Speaker Change: Yes.
Speaker Change: He is just around the pacing of the cost savings plan to 2027 should we <unk> at a high level of pace. The pace of the cost savings plan is that what you're asking about yes, yes, okay. So I.
Speaker Change: I think the way to look at it I think if you back up and say, Okay. Total company spend was $109 million going into two years ago budgeted. We are 10 million savings we achieved throughout last year. It takes us to where we are a budget at $99 million and overall spend and then over this year.
Jeremy Hoff: I can answer the first part of that. You know, there's a lot of focus on the right things at HMI, which I think is showing through in the margin expansion. You know, there's an intense focus on growing Pulaski and on growing Samuel Lawrence furniture. We don't have any focus on, you know, like the clubs we got out of and the ACH business, Eccentric's home business that we got out of, and we're not focused on loading up the warehouse with inexpensive, low margin, cheap accents at this point. So there's a lot of really good focus, and candidly, that's why we're able to save between $4 and $5.7 million on getting out of Savannah, because, you know, 80% of that need in Savannah was based on, you know, storing or warehousing inexpensive, low margin accents.
Speaker Change: If you include Savannah, and everything we're talking about.
Speaker Change: We're working on getting towards that 8% to $10 million, which puts us which puts us in more of an $89 million to $91 million overall spend which is really back to equivalent to what fiscal 'twenty two roughly was so.
Speaker Change: We're pretty encouraged by that especially being that we have with the Savannah exit minimum $4 million of that already already taken care of and we are working on the rest of that pretty hard and then I mentioned, we're looking at other things to become more efficient companywide and we'll have more information on that.
Jeremy Hoff: So we're able to really more utilize, you know, CDC-1, CDC-2, and Martinsville, and we talked about the Vietnam warehouse as well that we're working on. So our logistics and our warehousing, we believe, will substantially go down from a financial footprint, but serve us better than it has. Understood. Okay.
Speaker Change: In the coming weeks.
Speaker Change: That help.
Speaker Change: That's very helpful. Thank you for taking my questions and good luck with absolutely. Thank you.
Speaker Change: Thank you I'm showing no further questions at this time I would now like to turn the call back over to Jeremy Hoff for any closing remarks.
Anthony Lebiedzinski: Well, thank you very much and best of luck. Yeah. Thank you, Anthony. We appreciate it. Thank you.
Jeremy Hoff: I would like to thank everyone on the call for their interest in Hooker furnishings, we look forward to sharing our fiscal 'twenty six first quarter results in June take care.
Dave Storms: One moment for our next question. And that will come from the line of Dave Storms with Stonegate. Your line is open.
Speaker Change: Thank you all for participating. This concludes today's program you may now disconnect.
Jeremy Hoff: Morning, and thank you for taking my questions. Just wanted to start with the current 90 day tariff pause. Does this open up an ability or give you any desire to be maybe a little more nimble and continue to do a strategic inventory build? You know, good question. We were in because we had, as we said, we had taken our inventories particularly up and hooker branded, which is call it an 85 to 90% warehouse domestic warehouse footprint, we had already strategically increased that inventory. And that was, you know, we did, that was a little bit lucky and well timed for the situation.
Yeah.
Jeremy Hoff: But we also are able to manage this a little easier with the Vietnam footprint we talked about because we can hold product there depending on where this goes and be ready to fill our warehouse in four to six weeks lead time versus a six month lead time once we're able to see what actually happens next. to kind of keep growing at this, you know, 3 to 15 basis points pace. Well, you know, we expect that we believe that will improve meaning, you know, those are fairly small numbers, they are improvement, but we believe we can do better than that.
Jeremy Hoff: We were pleased that we weren't going backwards in this environment, which is why we started tracking market share in the first place. In an environment like this, it's very difficult to know, you know, are you doing well? Are you not doing well? Where's your business? Because when things are down like they are, everything seems bad and you can't see what's actually going on. So we're pleased to have that information so that to address what we need to address.
Jeremy Hoff: But I think we continue with the merchandising strategy, this collective living that we're doing, which really just means our legacy companies working together with one powerful presentation versus just a wood bedroom or a dining room shown by itself. You have upholstery that goes with it, occasional that goes with it. We have all of those capabilities, which is also what makes Margaritaville that's upcoming in the October market so powerful, because that's really where our strengths are, is when you combine everything together. And that really showed through, I mentioned the two collections we did very well in October.
Jeremy Hoff: Well, those were two of our first true collective living launches, which showed that when you have... I'll just give you an example. When you have a sofa that perfectly goes with a collection, it makes it very easy for our retail partners to say, yeah, I'll take that just like it is and I'll put it on my floor. Whereas they don't have to figure out, okay, what can I put this with? And a lot of times if you leave it up to the partner, they're going to put something that's not our company because they'll find something else outside of the hooker leggings.
Jeremy Hoff: So it's really a, that to me is a very powerful direction for us and it somewhat proved that in October.
Jeremy Hoff: So that's a great call, thank you.
Dave Storms: And then maybe just one more modeling question. With the new cost savings announced and the anticipation that they will be fully up and running by fiscal 2027, any sense of the pacing for this? Is it gonna be kind of gradual till then, or fits and starts? Any color there would be great. And we weren't sure I didn't I couldn't understand your question. Can you please ask that one more time? I'm sorry. Yeah, apologies, just around the pacing of the cost savings plan to 2027, to reach... Oh, you're asking about the pace of the cost savings plan.
Speaker Change: [music].
Jeremy Hoff: Is that what you're asking about? Yes. Okay, so... I think the way to look at it, I think if you back up and say, okay, total company spend was $109 million going into two years ago budgeted. Our $10 million savings we achieved throughout last year takes us to where we're a budgeted $99 million in overall spending. And then over this year, if you include Savannah and everything we're talking about, we're working on getting towards that $8-10 million, which puts us in more of an $89-91 million dollar overall spend, which is really back to equivalent to what fiscal 22 roughly was.
Jeremy Hoff: So we're pretty encouraged by that, especially being that we have, with the Savannah exit, minimum $4 million of that already taken care of, and we're working on the rest of that pretty hard.
Dave Storms: And then I mentioned we're looking at other things to become more efficient company-wide, and we'll have more information on that in the Does that help? That's very helpful. Thank you for taking my questions and good luck. Absolutely. Thank you. I'm showing no further questions at this time.
Jeremy Hoff: I would now like to turn the call back over to Jeremy Hoff for any closing remarks. I would like to thank everyone on the call for their interest in Hooker Furnishings. We look forward to sharing our fiscal 26 first quarter results in June.
Jeremy Hoff: Take care. Thank you all for participating.
Operator: This concludes today's program.
Operator: You may now disconnect.
Speaker Change: [music].