HOOKER FURNISHINGS Corp
For the period ended Feb 1, 2026. Filed Apr 17, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Apr 17, 2026
HOFT$14.53-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-02-02; filed 2025-04-18.
0001185185-25-000321
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-02-01; filed 2026-04-17.
0001185185-26-001420
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 97 previous paragraphs and 102 current paragraphs.
56 unchanged; 19 reworded; 27 added; 22 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 30 previous and 37 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
During fiscal 2026, we continued to operate in a challenging macroeconomic environment, including a slow housing market, soft demand for home furnishings, reduced consumer discretionary spending, and the impact of tariffs. In response, we focused on initiatives within our control, including the near completion of a multi-phase cost reduction program, the divestiture of certain underperforming businesses, the launch of the Margaritaville licensed collection at the High Point Market, and the opening of a new Vietnam warehouse, representing a shift in our warehousing strategy. We continued to focus on improving operating performance within our core Hooker Branded and Domestic Upholstery segments, with the Hooker Branded segment reporting operating income of $1.9 million compared to an operating loss in the prior year, and, the Domestic Upholstery segment reporting an operating loss of $16.9 million, driven by $15.0 million non-cash impairment charges, compared to an operating loss of $5.4 million in the prior year.
Current report
Net sales from continuing operations totaled $278.1 million for fiscal 2026, a decrease of $39.2 million, or 12.4%, compared to the prior fiscal year. The decrease was primarily attributable to the former Home Meridian segment’s hospitality business, which has been reclassified within All Other, due to the project-based nature of that business. Net sales in the Hooker Branded and Domestic Upholstery segments decreased modestly by 2.9% and 2.7%, respectively, partially due to the current fiscal year containing one fewer week than the prior year. Gross margin improved in both segments, and selling and administrative expenses decreased, due in part to cost reduction initiatives. The Company reported a operating loss of $16.5 million, primarily driven by $15.6 million of non-cash intangible asset impairment charges triggered by our stock price during the year, as well as operating losses within All Other due to lower sales volumes. Net loss from continuing operations was $12.8 million, or ($1.20) per diluted share.
Current report
Despite the operating and net losses, we maintained liquidity and financial flexibility. We reduced the outstanding principal balance of our term loan during the year to $3.6 million at fiscal year-end, compared to $21.7 million at the prior year-end. We also reduced our cash dividend by 50% per share, and our Board of Directors authorized a new $5 million share repurchase program as part of our capital allocation strategy. These actions enhanced our near-term liquidity and financial flexibility, enabling continued investment in key inventory, support for growth initiatives, and the ability to navigate ongoing macroeconomic uncertainty while maintaining a focus on long-term shareholder value.
Current report
Subsequent to fiscal year-end, in February 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the International Emergency Economic Powers Act were not authorized by statute. In March 2026, the U.S. Court of International Trade directed U.S. Customs and Border Protection to implement a refund process for previously collected duties. We are evaluating the potential recovery of these amounts, and potential new tariffs under different legal authorities.
Current report
Results of Operations – Continuing Operations
Current report
Consolidated net sales decreased by $39.2 million, or 12.4%, year-over-year, driven primarily by lower sales in the hospitality business within All Other and, to a lesser extent, a shorter fiscal year.
Current report
Consolidated gross profit decreased by $4.6 million, primarily due to lower sales at All Other, partially offset by increased gross profit in the Hooker Branded and Domestic Upholstery segments. Consolidated gross margin increased, reflecting margin improvements in the Hooker Branded and Domestic Upholstery segments.
Current report
Consolidated S&A expenses decreased by $11.9 million, or 50 basis points, compared to the prior year, primarily driven by the Company’s restructuring efforts, including the exit of unprofitable businesses at All Other, as well as cost reductions across the other segments.
Current report
Intangible Asset Impairment and Amortization
Current report
The Company recorded $15.6 million of non-cash impairment charges during fiscal 2026. These charges included $14.5 million related to goodwill in the Sunset West division and $556,000 related to the Bradington-Young trade name, both within the Domestic Upholstery segment, as well as $558,000 related to the remaining HMI-related business classified in All Other.
Current report
Consolidated interest expense decreased in fiscal 2026, primarily due to a significantly lower average principal balance throughout the year compared to the prior fiscal year.
Current report
Net (Loss) from Continuing Operations and Earnings Per Share
Current report
Results of Operations – Discontinued Operations
Current report
Combined net sales for PFC and SLF decreased by $37.3 million, or 87.2%, in fiscal 2026, primarily due to 52.6% lower unit volume. The decrease also reflects the divestiture of these businesses in early December 2025, resulting in approximately ten months of sales being recognized in fiscal 2026. Lower unit volume was driven by continued macroeconomic pressures and tariff-related purchasing hesitancy among value-oriented customers, particularly major furniture chains.
Current report
The Company recorded restructuring costs of $3.9 million in fiscal 2026, including $2.4 million associated with the exit of the Savannah warehouse, which primarily supported the PFC and SLF businesses. These costs included fixed asset write-offs, inventory liquidation and relocation expenses, and severance. In connection with the divestiture, the Company recorded a $6.9 million loss on sale of the discontinued businesses, including $2.6 million related to trade name impairments, approximately $3.5 million related to write-downs of accounts receivable, inventory, and other fixed and intangible assets, and approximately $735,000 of selling costs. In addition, these businesses incurred approximately $1.0 million of bad debt expense related to a customer bankruptcy.
Current report
The operating losses for fiscal 2026 were primarily attributable to the significant decline in sales volume and unfavorable product and customer mix, as well as restructuring costs and valuation adjustments associated with the divestiture. These impacts are not expected to recur following the divestiture.
Current report
During fiscal 2026, cash decreased by $5.2 million compared to the prior fiscal year. Cash used in financing activities, primarily related to repayments on the term loan and revolving credit facility, as well as dividend payments, was largely offset by cash provided by operating activities and, to a lesser extent, cash provided by investing activities, which benefited from proceeds from the sale of discontinued operations.
Current report
Cash provided by investing activities totaled $2.0 million, compared to $2.5 million used in the prior fiscal year. The increase was primarily due to $5.5 million proceeds from the sale of discontinued operations, partially offset by capital expenditure.
Current report
Cash used in financing activities was $27.4 million, compared to $11.1 million in the prior fiscal year, primarily due to $18.5 million of repayments on the revolving credit facility during the current fiscal year.
Current report
Cash provided by discontinued operations was $1.9 million, compared to $1.1 million used in the prior fiscal year, primarily due to favorable operating adjustments, including non-cash valuation allowance and asset disposal impacts added back to net loss.
Current report
As of February 1, 2026, future minimum annual commitments under leases and operating agreements are $8.7 million in fiscal 2027, $6.8 million in fiscal 2028, $6.1 million in each of fiscal 2029 and 2030, and $5.4 million in fiscal 2031.
Current report
In the Hooker Branded and Domestic Upholstery segments, incoming orders have increased year-over-year for three consecutive quarters, adjusted for the extra week in last year’s fourth quarter.
Current report
Housing activity and consumer confidence remain weak and the Department of Commerce’s February advance monthly estimates reflect that reality, showing that retail sales for furniture and home furnishings decreased by 5.6% as compared to the prior year and lower than January 2026.We don’t anticipate near-term meaningful improvement in conditions; however, with a more efficient cost structure and a streamlined portfolio, we believe we are positioned to report much improved results if current market conditions persist.
Current report
Our advantage is a clear focus on our core businesses, with the organization fully aligned to drive organic growth and deliver more consistent, sustainable earnings over time. Margaritaville product and gallery commitments continue to scale, with shipments expected to begin in the second half of fiscal 2027.
Current report
During the third quarter of fiscal 2026, adverse economic conditions, including declines in our market value, as well as other changes in market dynamics, triggered an interim impairment assessment of goodwill and intangible assets. We engaged an independent third-party valuation firm to assist in performing this assessment. The valuation procedures were performed with consideration of applicable accounting guidance, including Accounting Standards Codification (“ASC”) Topic 350, Goodwill and Other Intangible Assets and ASC Topic 820, Fair Value Measurement. The fair value of the Home Meridian and Domestic Upholstery reporting units was determined using a combination of the discounted cash flow method, guideline public company method, and guideline transaction method. Based on this analysis, we recorded aggregate non-cash impairment charges of $15.6 million, including $14.5 million related to Sunset West goodwill within the Domestic Upholstery segment, $0.6 million related to the HMI trade name within All Other, and $0.6 million related to the Bradington-Young trade name within the Domestic Upholstery segment. See Note 9, Intangible Assets and Goodwill, to the Consolidated Financial Statements for additional information regarding impairment charges and amortizable intangible assets.
Current report
Based on our internal valuation and goodwill impairment analysis as described above, we have concluded that Shenandoah goodwill in the Domestic Upholstery segment is not impaired, and the fair values of remaining Bradington Young, Home Meridian and BOBO non-amortizable trade names exceeded their carrying values as of February 1, 2026.
Current report
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40), which requires public entities to provide additional disclosures disaggregating certain expense captions presented on the consolidated statements of operations. The guidance requires disclosure, in tabular format, of specified expense categories, including employee compensation, depreciation and amortization, and inventory-related costs, within relevant income statement captions. The standard is effective for annual reporting periods beginning after December 15, 2026, which will be our fiscal 2028, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures. Adoption is expected to result in expanded disclosures, but is not expected to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.
Removed paragraphs (22)
Previous report
Fiscal 2025 consolidated net sales totaled $397.5 million, reflecting a decrease of $35.8 million, or 8.3%, compared to the previous fiscal year. All three reportable segments experienced sales decreases, driven by weak demand, a depressed housing market, and broader macroeconomic uncertainties impacting the broader home furnishings industry. The Company reported a consolidated operating loss of $18.1 million, primarily due to lower sales volumes, $4.9 million in restructuring costs related to its cost reduction plan, $3.1 million in bad debt expense from a major customer’s bankruptcy, and $2.8 million in a non-cash tradename impairment. Consolidated net loss amounted to $12.5 million, or $1.19 per diluted share.
Previous report
Despite the operating loss, the Company achieved significant milestones in fiscal 2025. These included the Margaritaville licensing agreement, the launch of Hooker Branded’s new merchandising strategy, Sunset West’s east coast expansion, key inventory investments, and market share gains amid a tough market. Additionally, the Company secured a new credit agreement, ensuring sufficient financial resources to sustain operations and pursue growth initiatives.
Previous report
Results of Operations
Previous report
Consolidated net sales decreased year-over-year due to the ongoing soft market conditions affecting all segments.
Previous report
Consolidated gross profit and margin decreased, primarily due to decreases in the Hooker Branded and Domestic Upholstery segments, as well as approximately $1.2 million inventory write-downs and restructuring costs at All Other related to the consolidation of the BOBO business. However, this decrease was partially offset by improved gross profit and margin at Home Meridian.
Previous report
Consolidated S&A expenses increased by $7.5 million or 380 bps compared to the previous year due to increases in all three segments and All Other. Consolidated S&A expenses increased as a percentage of net sales also due to a decrease in net sales.
Previous report
Consolidated interest expense decreased slightly in fiscal 2025 due to decreased principal balance, as well as reduced interest rates in the second half of the year.
Previous report
Net (Loss) / Income and (Loss) / Earnings Per Share
Previous report
During fiscal 2025, we used cash on hand and $936,000 life insurance proceeds to fund $9.9 million in cash dividends to shareholders, $8.9 million increase in inventory levels, $3.2 million capital expenditures, $3.0 million toward the development of the ERP system, $480,000 debt issuance cost and $395,000 in life insurance premiums on Company-owned life insurance policies. Company-owned life insurance policies are in place to compensate us for the loss of key employees and to facilitate business continuity.
Previous report
During fiscal 2024, we used a portion of the $55.5 million cash generated from operations and $1.0 million life insurance proceeds to fund $11.7 million share repurchases, $9.7 million in cash dividends to our shareholders, $6.8 million capital expenditures including investments in our new showrooms, $5.1 million for development of our cloud-based ERP system, $2.4 million on the BOBO acquisition, and $406,000 in life insurance premiums on Company-owned life insurance policies.
Previous report
During fiscal 2023, we used a portion of the $25 million term-loan proceeds and existing cash and cash equivalents on hand to fund the $25 million Sunset Acquisition, pay $13.3 million in purchases and retirement of common stock, build up inventory levels by $12 million, $9.6 million in cash dividends, $5.4 million for the development of our new cloud-based ERP system, $4.2 million capital expenditures to enhance our business systems and facilities, and $492,000 in life insurance premiums on Company-owned life insurance policies.
Previous report
During fiscal 2024, we had used approximately $11.7 million of the authorization to purchase 620,634 of our common shares at an average price of $18.79 per share. The share repurchase program was completed during the fiscal 2024 third quarter.
Previous report
Enterprise Resource Planning
Previous report
During calendar 2021, our Board of Directors approved an upgrade to our current ERP system and implementation efforts began shortly thereafter. The ERP system went live at Sunset West in December 2022 and in the legacy Hooker divisions in early September 2023. Due to our cost reduction initiatives, we have temporarily paused the ERP project in the Home Meridian segment.
Previous report
We lease office space, warehousing facilities, showroom space and office equipment under leases expiring over the next five years. As of February 2, 2025, future minimum annual commitments under leases and operating agreements are $10.0 million in fiscal 2026, $10.1 million in fiscal 2027, $8.4 million in fiscal 2028, $7.7 million in fiscal 2029, and $7.3 million in fiscal 2030. In March 2025, we announced the decision to exit the Savannah, Georgia distribution center. This will reduce lease payments and our future commitments by approximately $10 million over the next five years, with a total of $14.5 million over the remaining lease term. See Note 22 Subsequent Events for additional information.
Previous report
Savannah warehouse exit
Previous report
On March 24, 2025, we announced our decision to exit its Savannah, Georgia distribution center and consolidate operations in the existing facilities. The Company commenced operations at the Savannah facility in October 2021 for its Home Meridian segment’s (“HMI”) Accentrics Home (“ACH”) brand. However, shortly after opening the facility, ACH’s competitive position was severely eroded by a sharp rise in post-COVID container freight rates from Asia. In 2024, we liquidated its inventory and closed ACH, part of a larger plan to exit unprofitable businesses at HMI. We began reducing our footprint in Savannah shortly after that through a series of sub-leases and lease amendments with our landlord, continued to utilize remaining space for other brands in our Home Meridian segment and for the Sunset West division of our Domestic Upholstery segment. We recorded net charges of between $1.3 million in fiscal 2025 and expect to record between $3.0 million to $4.0 million in fiscal 2026, related to the Savannah exit. We further expect preliminary savings of between $750,000-$1.0 million in net operating expenses in fiscal 2026. Also preliminarily, we expect to realize annualized savings of between $4.0 million to $5.7 million beginning in fiscal 2027. These costs and benefits are largely dependent on the timing of the completion of the exit and could differ from these preliminary estimates.
Previous report
There is currently significant economic uncertainty and volatility. We are 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 additional reciprocal tariffs on our operations and profitability. 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 business. We continue to identify additional opportunities to gain efficiency by consolidating operations. 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.
Previous report
On the positive side, the inflation cooled in February and March, falling to the levels experienced last summer and fall before it rose from November 2024 to January 2025. Additionally, according to the U.S. Census Bureau year-over-year monthly furniture sales have increased for 5 straight months, beginning in September 2024.
Previous report
However, the Index of Consumer Sentiment and existing home sales continue to be low, which reflects the uncertainty.
Previous report
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.
Previous report
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The new guidance requires enhanced effective tax rate reconciliation and income taxes paid disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 (our fiscal 2026). We are currently evaluating the impact that the adoption of this new guidance will have on our Consolidated Financial Statements, if any, and will add necessary disclosures upon adoption.
Reworded paragraphs (19)
Previous wording
In Management’s Discussion and Analysis, we analyze and explain the annual changes in some specific line items in the consolidated financial statements for fiscal 2025 compared to fiscal 2024. We also provide information regarding the performance of each of our operating segments and All Other. The analysis and discussions of fiscal 2024 compared to fiscal 2023 results are in our 2024 Form-10K available through Hooker Furnishings and SEC websites.
Current wording
In Management’s Discussion and Analysis, we analyze and explain the annual changes in some specific line items in the consolidated financial statements for fiscal 2026 compared to fiscal 2025. We also provide information regarding the performance of each of our operating segments and All Other. The discussion below comparing fiscal 2026 to fiscal 2025 excludes discontinued operations, except where otherwise noted. The analysis and discussions of fiscal 2025 compared to fiscal 2024 results are in our 2025 Form-10K available through Hooker Furnishings and SEC websites.
Previous wording
Unless otherwise indicated, references to the “Company,” “we,” “our” or “us” refer to Hooker Furnishings Corporation and its consolidated subsidiaries, unless specifically referring to segment information. All references to the “Hooker,” “Hooker Division,” “Hooker Legacy Brands” or “traditional Hooker” divisions or companies refer to the current components of our Hooker Branded segment, the Domestic Upholstery segment including Bradington-Young, HF Custom, Shenandoah Furniture and Sunset West, and All Other which includes H Contract, and BOBO.
Current wording
Unless otherwise indicated, references to the “Company,” “we,” “us” and “our” refer to Hooker Furnishings Corporation and its consolidated subsidiaries, unless specifically referring to segment information. All references to the “Hooker,” “Hooker Division(s),” “Hooker Legacy Brands” or “traditional Hooker” divisions or companies refer to all current business units and brands except for those in the former Home Meridian segment. The Hooker Branded segment includes Hooker Casegoods and Hooker Upholstery. The Domestic Upholstery segment includes Bradington-Young, HF Custom (formerly Sam Moore), Shenandoah Furniture and Sunset West. All Other includes intercompany eliminations and operating segments that are not individually reportable.
Previous wording
Furnishings sales account for all of our net sales. For financial reporting purposes, we are organized into three reportable segments- Hooker Branded, Home Meridian and Domestic Upholstery, with our other businesses included in All Other. We regularly monitor our reportable segments for changes in facts and circumstances to determine whether changes in the identification or aggregation of operating segments are necessary. See Note 16 to our consolidated financial statements for additional financial information regarding our segments.
Current wording
Furnishings sales account for all of our net sales. For financial reporting purposes, we are organized into two reportable segments - Hooker Branded and Domestic Upholstery. Our other businesses that are not individually reportable and intercompany eliminations are aggregated into “All Other”. We regularly monitor our reportable segments for changes in facts and circumstances to determine whether changes in the identification or aggregation of operating segments are necessary. See Note 17 to our consolidated financial statements for additional financial information regarding our segments.
Previous wording
Because we report on a fiscal year that ends on the Sunday closest to January 31 st of each year, the 2025 fiscal year was one week longer than the comparable 2024 fiscal year. The following table presents average net sales per shipping day in thousands for the 2025 and 2024 fiscal years:
Current wording
Because we report on a fiscal year that ends on the Sunday closest to January 31 st of each year, the 2026 fiscal year was one week shorter than the comparable 2025 fiscal year. The following table presents average net sales per shipping day in thousands for the 2026 and 2025 fiscal years:
Previous wording
Intangible asset amortization expense stayed flat in fiscal 2025. The $2.8 million non-cash impairment charge was related to certain indefinite-lived trade names in the Home Meridian segment. See Note 10 Intangible Assets and Goodwill to our Consolidated Financial Statements for additional information about the impairment charges and our amortizable intangible assets.
Current wording
Intangible asset amortization expense decreased slightly in fiscal 2026, primarily due to the absence of amortization related to the Sam Moore trade name and reduced amortization associated with the remaining HMI business classified in All Other. See Note 9, Intangible Assets and Goodwill, to the Consolidated Financial Statements for additional information regarding impairment charges and amortizable intangible assets.
Previous wording
The Company reported an operating loss of $18.1 million in fiscal 2025 due to decreased sales volume, $4.9 million in restructuring costs, $3.1 million in bad debt, and $2.8 million in intangible asset impairment, as well as other factors discussed above.
Current wording
The Company reported an operating loss of $16.5 million in fiscal 2026 due to $15.6 million non-cash impairment charge, decreased overall net sales, approximately $2.0 million in restructuring costs, as well as other factors discussed above.
Previous wording
We recorded income tax benefit of $3.9 million for fiscal 2025, compared to income tax expense of $2.6 million for fiscal 2024. The effective tax rates for fiscal 2025 and fiscal 2024 were 23.9% and 20.7%, respectively. The effective tax rate was higher in fiscal 2025 due to the impact of state tax benefits and the cash surrender value of company-owned life insurance which were added to the favorable tax impact of the pretax loss, versus a subtraction from tax expense in the case of a pretax profit in the previous year. See Note 17 Income Taxes to our Consolidated Financial Statements for additional information about our income taxes.
Current wording
Income tax benefit from continuing operations was $4.3 million for fiscal 2026, compared to $1.9 million for fiscal 2025. The effective tax rates were 25.0% and 23.6% for fiscal 2026 and fiscal 2025, respectively. The increase in the effective tax rate in fiscal 2026 was primarily due to higher state tax benefits. See Note 16 Income Taxes to our Consolidated Financial Statements for additional information about our income taxes.
Previous wording
Our most significant ongoing short-term cash requirements relate primarily to funding operations (including expenditures for inventory, lease payments and payroll), quarterly dividend payments and capital expenditures related primarily to showroom renovations and upgrading systems, buildings and equipment. The timing of our working capital needs can vary greatly depending on demand for and availability of raw materials and imported finished goods but is generally the greatest in the mid-summer as a result of inventory build-up for the traditional fall selling season. Long-term cash requirements relate primarily to repayment of long-term debt and funding lease payments.
Current wording
Our most significant ongoing short-term cash requirements relate primarily to funding operations (including expenditures for inventory, lease payments and payroll), quarterly dividend payments and capital expenditures related primarily to our showroom renovations and upgrading systems, buildings and equipment. The timing of our working capital needs can vary greatly depending on demand for and availability of raw materials and imported finished goods but is generally the greatest in the mid-summer as a result of inventory build-up for the traditional fall selling season. Long-term cash requirements relate primarily to funding lease payments.
Previous wording
We incurred $480,000 in debt issuance costs in connection with our term loans. As of February 2, 2025, unamortized loan costs of $464,000 were netted against the carrying value of our term loans on our consolidated balance sheets.
Current wording
We incurred $480,000 in fiscal 2025 and an additional $118,000 in fiscal 2026 in debt issuance costs in connection with our term loans. As of February 1, 2026, unamortized loan costs of $476,000 were netted against the carrying value of our term loans on our consolidated balance sheets.
Previous wording
As of February 2, 2025, we had $22.1 million principal amount of outstanding loans and $6.7 million face amount of letters of credit. We had $41.2 million of Availability based on the current Borrowing Base. There were no additional borrowings outstanding under the Amended and Restated Loan Agreement as of February 2, 2025.
Current wording
As of February 1, 2026, we had $3.6 million principal amount of outstanding loans and $3.6 million face amount of letters of credit. We had $62.8 million of Availability based on the current Borrowing Base. There were no additional borrowings outstanding under the Amended and Restated Loan Agreement as of February 1, 2026. We believe that our existing liquidity and capital resources are sufficient to meet our anticipated needs over the next 12 months.
Previous wording
In fiscal 2023, our Board of Directors authorized the repurchase of up to $20 million of the Company’s common shares. The authorization did not obligate us to acquire a specific number of shares during any period and did not have an expiration date, but it could be modified, suspended, or discontinued at any time at the discretion of our Board of Directors. Repurchases could be made from time to time in the open market, or through privately negotiated transactions or otherwise, in compliance with applicable laws, rules and regulations, and subject to our cash requirements for other purposes, compliance with the covenants under the loan agreement for our revolving credit facility and other factors we deem relevant. In fiscal 2024 second quarter, our Board of Directors approved an additional $5 million for the repurchase of our common shares, adding to the $20 million authorization it approved in fiscal 2023.
Current wording
In fiscal 2026 fourth quarter, our Board of Directors authorized the repurchase of up to $5 million of the Company’s common shares. The authorization did not obligate us to acquire a specific number of shares during any period and did not have an expiration date, but it could be modified, suspended, or discontinued at any time at the discretion of our Board of Directors. Repurchases could be made from time to time in the open market, or through privately negotiated transactions or otherwise, in compliance with applicable laws, rules and regulations, and subject to our cash requirements for other purposes, compliance with the covenants under the Amended and Restated Loan Agreement and other factors we deem relevant. We did not repurchase any of our common shares during fiscal 2026.
Previous wording
We expect to spend between $2 million to $3 million in capital expenditures in fiscal 2026 to maintain and enhance our operating systems and facilities.
Current wording
We expect to spend approximately $3 million in capital expenditures in fiscal 2027 to maintain and enhance our operating systems and facilities.
Previous wording
Our material capital commitments primarily consist of lease payments.
Current wording
Our material capital commitments primarily consist of lease payments, obligations for leased space or properties under third-party operating agreements, and future benefit payments under two retirement plans.
Previous wording
We declared and paid dividends of $0.92 per share or approximately $9.9 million in fiscal 2025, an increase of 3.4% or $0.03 per share compared to $0.89 per share or approximately $9.7 million in fiscal 2024.
Current wording
We declared and paid dividends of $0.805 per share or approximately $8.8 million in fiscal 2026, a decrease of 12.5% or $0.115 per share compared to $0.92 per share or approximately $9.9 million in fiscal 2025. During the third quarter of fiscal 2026, the Board approved a reduction of the annual dividend to $0.46 per share, or 50%, effective beginning with the December 31, 2025 dividend payment. This action reflects a recalibration of our capital allocation strategy to align with current operating conditions, liquidity requirements, and our strategic transition to a leaner, growth-oriented business model. The reduced dividend, together with the share repurchase program, is intended to preserve financial flexibility and support ongoing investment in the business while continuing to return capital to shareholders.
Previous wording
On March 5, 2025, our Board of Directors declared a quarterly cash dividend of $0.23 per share, payable on March 31, 2025 to shareholders of record at March 17, 2025.
Current wording
On March 5, 2026, our Board of Directors declared a quarterly cash dividend of $0.115 per share, payable on March 31, 2026 to shareholders of record at March 16, 2026.
Previous wording
The fair value of our trademarks and trade names is determined based on the estimated earnings and cash flow capacity of those assets. The impairment test consists of a comparison of the fair value of the indefinite-lived intangible assets with their carrying amount. If the carrying amount of the indefinite-lived intangible assets exceeds their fair value, an impairment loss is recognized in an amount equal to that excess. During fiscal 2025, due to the decline in revenue driven by the downturn in the furniture industry, increased freight costs, changes in management’s strategy, and the bankruptcy of a key customer, we identified triggering events that necessitated a valuation of the indefinite-lived trade names and trademarks in the Home Meridian segment. Consequently, we performed a valuation using the discounted cash flow method. This methodology involved cash flow projections and growth rates for each trade name over the next five years, provided by management, along with a royalty rate benchmark for companies engaged in similar activities. Based on this analysis, we recorded non-cash impairment charges of $2.8 million for certain indefinite-lived trade names within the Home Meridian segment. At February 2, 2025, based on our internal valuation, the fair values of our Bradington-Young, remaining Home Meridian and BOBO non-amortizable trademarks and trade names exceeded their carrying values.
Current wording
The fair value of our trademarks and trade names is determined based on the estimated earnings and cash flow capacity of those assets. The impairment test consists of a comparison of the fair value of the indefinite-lived intangible assets with their carrying amount. If the carrying amount of the indefinite-lived intangible assets exceeds their fair value, an impairment loss is recognized in an amount equal to that excess.
Previous wording
Upon the adoption of ASU 2017-04, we perform our annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. Management judgment is a significant factor in the goodwill impairment evaluation process. The computations require management to make estimates and assumptions, the most critical of which are potential future cash flows and the appropriate discount rate. Based on our internal goodwill impairment analysis as described above, we have concluded that Shenandoah and Sunset West goodwill in the Domestic Upholstery segment and BOBO goodwill in All Other is not impaired as of February 2, 2025.
Current wording
Upon the adoption of ASU 2017-04, we perform our annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. Management judgment is a significant factor in the goodwill impairment evaluation process. The computations require management to make estimates and assumptions, the most critical of which are potential future cash flows and the appropriate discount rate.
Previous wording
We review inventories on hand and record an allowance for slow-moving and obsolete inventory based on historic experience, current sales trends and market conditions, expected sales and other factors. When we identify inventory that is unlikely to be sold or that has a cost basis in excess of its net realizable value, we record a write-down to reduce the carrying amount of inventory to its estimated net realizable value. In March 2025, we announced the planned exit of our Savannah, GA warehouse and the consolidation of warehouse operations at existing and temporary facilities. In fiscal 2025, we recorded $1.3 million in inventory reserves on end-of-life and near-end of life cycle products that we don’t plan to move to these existing or temporary facilities due to the moving costs involved.
Current wording
We review inventories on hand and record an allowance for slow-moving and obsolete inventory based on historic experience, current sales trends and market conditions, expected sales and other factors. When we identify inventory that is unlikely to be sold or that has a cost basis in excess of its net realizable value, we record a write-down to reduce the carrying amount of inventory to its estimated net realizable value.
Previous wording
In fiscal 2025, imported products sourced from Vietnam accounted for 76% of our import purchases and our top five suppliers in Vietnam accounted for 62% of our fiscal 2025 import purchases. A disruption in our supply chain, or from Vietnam in general, could significantly impact our ability to fill customer orders for products manufactured in those countries. Our supply chain could be adversely impacted by the uncertainties of health concerns and governmental restrictions. In some cases, we may be able to provide substitutions using inventory on hand, in-transit and from our domestic warehouses, but not enough to entirely mitigate the lost sales. Supply disruptions and delays on selected items could occur for six months or longer before the impact of remedial measures would be reflected in our results. If we are unsuccessful in obtaining those products from other sources or at comparable cost, a disruption in our supply chain from our largest import furniture suppliers, or from Vietnam in general, could adversely affect our sales, earnings, financial condition and liquidity.
Current wording
In fiscal 2026, imported products sourced from Vietnam accounted for 87% of our import purchases and our top five suppliers in Vietnam accounted for 69% of our fiscal 2026 import purchases. A disruption in our supply chain, or from Vietnam in general, could significantly impact our ability to fill customer orders for products manufactured in those countries. Our supply chain could be adversely impacted by the uncertainties of health concerns and governmental restrictions. In some cases, we may be able to provide substitutions using inventory on hand, in-transit and from our domestic warehouses, but not enough to entirely mitigate the lost sales. Supply disruptions and delays on selected items could occur for six months or longer before the impact of remedial measures would be reflected in our results. If we are unsuccessful in obtaining those products from other sources or at comparable cost, a disruption in our supply chain from our largest import furniture suppliers, or from Vietnam in general, could adversely affect our sales, earnings, financial condition and liquidity.