Hooker Furnishings returns to Q2 profit as tariff recoveries lift margins

Hooker Furnishings Corporation (NASDAQ-GS: HOFT) returned to a second-quarter profit despite lower sales in its fiscal 2027 quarter ended August 2, 2026. Consolidated net sales fell 8.7% to $63.250 million, while diluted earnings per share, including discontinued operations, rose to $0.15 from a loss of $0.31 a year earlier. The company reported the results on September 11.

Second-quarter results

The furniture company received $7.9 million in tariff recoveries during the quarter. Those recoveries helped expand gross margin even as sales remained under pressure. For HOFT readers, the earnings improvement comes with a limit: the company does not expect material additional tariff recoveries, making the performance of its underlying businesses important to sustaining profitability.

Net sales for the 13-week quarter were $63.250 million, compared with $69.243 million in the quarter ended August 3, 2025. Operating income reached $1.283 million, reversing a $510,000 operating loss. Gross profit increased to $20.099 million from $17.242 million.

Continuing operations generated net income of $1.205 million, or $0.11 per diluted share, compared with a loss of $545,000, or $0.06 per diluted share. Including discontinued operations, net income was $1.670 million, against a loss of $3.277 million a year earlier; diluted EPS was $0.15 versus a loss of $0.31.

For the first 26 weeks of fiscal 2027, sales declined 5.5% to $132.702 million from $140.427 million. First-half operating income was $2.861 million, compared with an operating loss of $1.009 million. Including discontinued operations, first-half net income was $2.731 million, or $0.25 per diluted share, versus a loss of $6.329 million, or $0.60 per diluted share.

Tariff recoveries and margins

The company said gross margin expanded 450 basis points in the second quarter and 180 basis points in the first six months. It attributed the improvement to tariff recoveries on imported materials, lower imported-material costs and improved overhead absorption.

Of the $7.9 million received, continuing operations recognized about $4.3 million as a reduction in cost of sales and $200,000 in related interest income. About $500,000 of customer credits reduced revenue, partially offsetting those benefits. Discontinued operations recognized a separate net pre-tax benefit of about $1.0 million. Another $1.8 million reduced inventory carrying values at quarter-end and had not yet flowed through cost of sales.

Hooker said the recoveries followed the Supreme Court's February 2026 ruling that certain IEEPA tariffs were unauthorized and the Court of International Trade's March 2026 direction of a refund process. The company estimated that cumulative pre-tax tariff costs of about $10.3 million in fiscal 2026 significantly exceeded the current recoveries. It does not expect material additional recoveries.

What the segments showed

Hooker Branded sales declined 4.5% in the second quarter and 4.6% in the first six months. Lower unit volume and higher promotional discounts more than offset higher average selling prices, the company said. Domestic Upholstery benefited from growth in private-label and outdoor furnishings.

The All Other segment faced softer hospitality demand and project timing. Lower shipments produced a second-quarter operating loss, although the segment remained profitable for the first six months. About 80% of its first-half shipments occurred in the first quarter.

Cash and dividends

The unaudited August 2 balance sheet showed cash and cash equivalents of $18.660 million, compared with $1.112 million on February 1, 2026. Net trade receivables were $26.275 million and inventories were $43.414 million.

Cash dividends declared were $0.115 per share for the second quarter, compared with $0.23 a year earlier. First-half declared dividends totaled $0.230 per share, versus $0.46 in the prior-year period.

Filing path

Hooker Furnishings disclosed fiscal 2027 second-quarter results in Form 8-K AccNo 0001171843-26-005988 under Items 2.02 and 9.01 with Exhibit 99.1, filed September 11, 2026 for the quarter ended August 2, 2026.