Sales of prostitutes rise despite global challenges
MARTINSVILLE, Virginia — Transportation costs tripled, factories were shut down by COVID, and component prices were inflated. Still, boosted by sales from its branded and household upholstery segments, Hooker Furnishings Corp. recorded a 9.9% increase in net sales.
The company, which ranked 23rd in the 2022 FDMC 300 rankings, reported net sales of $593.6 million for its 2022 fiscal year ended Jan. 30, 2022, an increase of $53.5 million from to a year ago.
The revenue increase was driven by an increase in sales of more than 20% in the Hooker Branded and Domestic Upholstery segments compared to the previous year. These gains were partially offset by a 1.2% sales decline in the Home Meridian segment.
Sales increased despite global logistical challenges and COVID-related shutdowns at its Asian factories, said Jeremy Hoff, chief executive. He said the company had been impacted by soaring ocean freight costs and shipping bottlenecks throughout the year, material and component inflation, and staff and labor shortages. moss.
“We successfully mitigated a host of macroeconomic challenges for much of the year on the Hooker legacy side of the business and in the first half at Home Meridian. We have been able to grow our sales, remain profitable and undertake transformative strategic initiatives for the long-term expansion of the business,” Hoff said.
This was especially true, he said, during the first half of the year, when all segments saw double-digit sales increases and the company was still able to “meet historic levels of demand with the right products and the preparation of stocks”.
“HMI was more quickly and more severely impacted by rising freight costs, reduced vessel space and COVID-related plant closures that began in August,” Hoff said.
“Over the past 18 months, transportation costs have roughly tripled, significantly increasing our cost of imported goods sold,” Hoff said.
“We were able to mitigate many of these dynamics until late summer when the unexpected COVID-related shutdown of our Asian factories began and continued for most of the remainder of the fiscal year,” Hoff said. “While incoming orders and backlogs have remained historically high, this loss of production capacity has significantly reduced our supply of imported products, which immediately impacted Home Meridian and even began to cause out-of-stock issues. and low inventory receipts at Hooker Branded in Q4, despite the segment’s US warehousing model,” he said.
As a result, the Company recorded a decline in consolidated sales of 13.2% in the fourth quarter which began on November 1, 2021 and ended on January 30, 2022. Consolidated sales for the fourth quarter amounted to 134.8 million, the decline being due to a decline of 23.7%, or $18.9 million, lower revenue at HMI and a decline in sales of 11.8%, or $5.8 million, at Hooker Branded. These lower sales were slightly offset by a $3.2 million or 13.5% increase in home furnishings sales in Canada during the fourth quarter.
Over the past few months, our Asian suppliers have started ramping up production again and are “currently operating at around 85% to 90% capacity and improving every week,” Hoff said, adding that “although we expect the production of imported goods will reach 100% capacity in the first quarter of fiscal 2023, as we anticipated last quarter, we will not feel the full impact of the increased production until the second quarter. »
Also in the fourth quarter of 2022, the Company recorded a consolidated operating loss of $5.3 million, compared to $10.5 million in operating profit in the same period of the previous year. Net loss for the fourth quarter of Fiscal 2022 was $4.0 million, compared to net income of $8.5 million in the fourth quarter of Fiscal 2021.
The future looks bright
“Incoming orders and backlogs continue to be strong across most divisions,” Hoff said. “We are concerned about global logistical constraints and economic headwinds affecting the consumer and which could impact demand in the short term, such as inflation, high gas prices and the war in Ukraine.
Hoff expects the production capacity of its Asian suppliers to improve significantly, reaching 100% capacity at some point in the first quarter, although the full financial impact of this improved inventory readiness will not is felt only in the second trimester.
“We remain optimistic that long-term trends will continue to benefit us, such as housing demand, renewed and enduring emphasis on the interior and exterior of homes, and millennials entering their early years of income and household formation,” Hoff said. “We were also very encouraged by the recently completed Spring High Point deal. Attendance increased significantly from fall 2021 and June 2021 markets, more in line with pre-pandemic levels. The new products were very well received with major placements across all brands, including new licensed product placements from Home Meridian.
While we faced a wide range of challenges over the past year, our team continued to focus on multiple strategic growth initiatives, many of which we anticipate will positively impact us over the next 6-12 next few months,” Hoff said. “One such initiative is the integration of Sunset West, a leading outdoor furniture manufacturer, which we acquired on February 1 of this year.