HOOKER FURNISHINGS Corp Segments Disclosure

NOTE 17 – SEGMENT INFORMATION

 

As a public entity, we are required to present disaggregated information by segment using the management approach. The objective of this approach is to allow users of our financial statements to see our business through the eyes of management based upon the way management reviews performance and makes decisions. The management approach requires segment information to be reported based on how management internally evaluates the operating performance of the company’s business units or segments. The objective of this approach is to meet the basic principles of segment reporting as outlined in ASC 280 Segments (“ASC 280”), which are to allow the users of our financial statements to:

 

	◾	better understand our performance;

	◾	better assess our prospects for future net cash flows; and

◾

make more informed judgments about us as a whole.

 

We define our segments as those operations our chief operating decision maker (“CODM”) regularly reviews to analyze performance and allocate resources. The Company’s CODM is the Chief Executive Officer. The CODM regularly reviews net sales, gross profit, and operating income by segment as the primary measures of segment performance. The CODM reviews net sales as a primary indicator of operational performance, assessing how much revenue is brought in from core business activities, after returns, allowances, and discounts, which reflects demand and execution of each segment’s strategy. Gross profit, which is derived from net sales and cost of sales, is reviewed by the CODM as a diagnostic metric, particularly useful in evaluating margin trends. Operating income is the key profitability metric used to assess performance across segments and make decisions related to resource allocation, including capital expenditures, headcount, and other investment initiatives. Each of these metrics are considered in budgeting, forecasting, and operational planning decisions.

 

For financial reporting purposes, we are organized into two reportable segments and “All Other”, which includes the remainder of our businesses:

 

◾

Hooker Branded, consisting of the operations of our imported Hooker Casegoods and Hooker Upholstery businesses;

 

◾

Domestic Upholstery, which includes the domestic upholstery manufacturing operations of Bradington-Young, HF Custom (formerly Sam Moore), Shenandoah Furniture and Sunset West; and

 

◾

All Other, consisting of intercompany eliminations and operating segments that are not individually reportable. Due to a change in the way management internally evaluates operating performance, beginning with the fiscal 2026 first quarter, Hooker Branded and Domestic Upholstery segments’ results now include all the sales of products formerly included in H Contract’s results. Fiscal 2025 results discussed below have been recast to reflect this change. Subsequent to the third quarter of fiscal 2026, the Company completed the divestiture of the Pulaski Furniture (“PFC”) and Samuel Lawrence (“SLF”) casegoods brands, formerly part of the Home Meridian segment. As the PFC and SLF businesses have been classified as discontinued operations, the remaining business does not qualify as a reportable segment, therefore, we combined them in “All Other” in accordance with ASC 280. The Home Meridian segment has been eliminated. The Samuel Lawrence Hospitality product line, along with the remaining Home Meridian businesses, has been reported within All Other.

The following table presents segment information for the periods, and as of the dates indicated. Prior-year information has been recast to reflect the changes in segments discussed above.

 

		52 Weeks Ended								53 Weeks Ended								52 Weeks Ended
		February 1, 2026								February 2, 2025								January 28, 2024
						% Net								% Net								% Net
Net Sales						Sales								Sales								Sales
Hooker Branded		$	146,978				52.8	%		$	151,298				47.7	%		$	162,524				47.2	%
Domestic Upholstery			111,177				40.0	%			114,216				36.0	%			126,827				36.8	%
All Other			19,984				7.2	%			51,843				16.3	%			55,294				16.0	%
Consolidated		$	278,139				100	%		$	317,357				100	%		$	344,645				100	%
Cost of Sales
Hooker Branded		$	98,766				67.2	%		$	104,671				69.2	%		$	101,736				62.6	%
Domestic Upholstery			90,816				81.7	%			95,927				84.0	%			102,779				81.0	%
All Other			15,062				75.4	%			38,623				74.5	%			46,166				83.5	%
Consolidated		$	204,644				73.6	%		$	239,221				75.4	%		$	250,681				72.7	%
Gross Profit/(Loss)
Hooker Branded		$	48,212				32.8	%		$	46,627				30.8	%		$	60,788				37.4	%
Domestic Upholstery			20,361				18.3	%			18,289				16.0	%			24,048				19.0	%
All Other			4,922				24.6	%			13,220				25.5	%			9,128				16.5	%
Consolidated		$	73,495				26.4	%		$	78,136				24.6	%		$	93,964				27.3	%
Selling and Administrative Expenses
Hooker Branded		$	46,284				31.5	%		$	47,060				31.1	%		$	42,836				26.4	%
Domestic Upholstery			20,021				18.0	%			21,287				18.6	%			20,582				16.2	%
All Other			5,616				28.1	%			15,476				29.9	%			11,313				20.5	%
Consolidated		$	71,921				25.9	%		$	83,823				26.4	%		$	74,731				21.7	%
Goodwill and Intangible assets impairment
Domestic Upholstery		$	15,018				13.5	%		$	-				0.0	%		$	-				0.0	%
All Other			558				2.8	%			1,055				2.0	%			-				0.0	%
Consolidated		$	15,576				5.6	%		$	1,055				0.3	%		$	-				0.0	%
Intangible assets amortization
Domestic Upholstery			2,219				2.0	%		$	2,376				2.1	%		$	2,335				1.8	%
All Other			243				1.2	%			387				0.7	%			481				0.9	%
Consolidated		$	2,462				0.9	%		$	2,763				0.9	%		$	2,816				0.8	%
Operating (Loss) / Income
Hooker Branded		$	1,928				1.3	%		$	(433	)			-0.3	%		$	17,952				11.0	%
Domestic Upholstery			(16,897	)			-15.2	%			(5,374	)			-4.7	%			1,131				0.9	%
All Other			(1,495	)			-7.5	%			(3,698	)			-7.1	%			(2,666	)			-4.8	%
Consolidated		$	(16,464	)			-5.9	%		$	(9,505	)			-3.0	%		$	16,417				4.8	%
Other Income, net
Hooker Branded		$	131				0.1	%		$	1,292				0.9	%		$	872				0.5	%
Domestic Upholstery			(5	)			0.0	%			770				0.7	%			2				0.0	%
All Other			70				0.4	%			649				1.3	%			(16	)			0.0	%
Consolidated		$	196				0.1	%		$	2,711				0.9	%		$	858				0.2	%
Interest expense - Corporate		$	765				0.3	%		$	1,274				0.4	%		$	1,573				0.5	%
Income taxes - Corporate		$	(4,254	)			-1.5	%		$	(1,902	)			-0.6	%		$	3,356				1.0	%
Net (loss) / income from continuing operations - Corporate		$	(12,779	)			-4.6	%		$	(6,166	)			-1.9	%		$	12,346				3.6	%
Restructuring Costs
Hooker Branded		$	1,301							$	1,406							$	-
Domestic Upholstery			511								639								-
All Other			235								2,011								-
Consolidated		$	2,047							$	4,056							$	-
Capital Expenditures
Hooker Branded			2,464								1,438								4,186
Domestic Upholstery			281								1,515								860
All Other			418								121								192
Consolidated		$	3,163							$	3,074							$	5,238
Depreciation & Amortization
Hooker Branded			2,223								2,254								2,268
Domestic Upholstery			4,012								4,279								3,972
All Other			829								1,219								1,423
Consolidated		$	7,064							$	7,752							$	7,663

We recorded $2.0 million and $4.1 million in restructuring costs in fiscal 2026 and 2025, respectively, primarily related to severance and warehouse consolidation initiatives.

 

Within discontinued operations, we 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, we recorded a $6.9 million valuation allowance. In addition, these businesses incurred approximately $1.0 million of bad debt expense related to a customer bankruptcy.

 

As of February 1, 2026, we had accrued restructuring charges of approximately $298,000. The balance is expected to be paid during the next 12 months. The restructuring costs were recorded under cost of sales and selling and administrative expenses in the statements of operations.

 

		As of February 1,								As of February 2,
		2026				%Total				2025				%Total
						Assets								Assets
Assets
Hooker Branded		$	140,732				66.3	%		$	153,373				54.6	%
Domestic Upholstery			55,083				25.9	%			58,746				20.9	%
All Other			16,507				7.8	%			40,006				14.2	%
Assets Held for Sale, net			-				0.0	%			28,782				10.2	%
Consolidated Assets		$	212,322				100	%		$	280,907				100	%
Consolidated Goodwill and Intangibles			13,569								33,035
Total Consolidated Assets		$	225,891							$	313,942

 

Sales by product type are as follows:

 

		Net Sales (in thousands)
		Fiscal
		2026								2025								2024
Casegoods		$	140,639				51	%		$	159,562				50	%		$	160,046				46	%
Upholstery			137,500				49	%			157,795				50	%			184,599				54	%
		$	278,139				100	%		$	317,357				100	%		$	344,645				100	%

 

No significant long-lived assets were held outside the United States at either February 1, 2026 or February 2, 2025. International customers accounted for less than 2% of consolidated invoiced sales in fiscal 2026, 2025, and 2024. We define international sales as sales outside of the United States and Canada.