Home furnishing retailers across the spectrum have struggled in the current environment. We’ve heard from Big Lots at the low end and RH at the high end, both experiencing weakness due to inflation and housing market activity grinding to a halt. 🐌
Today sellers got their hooks into another retailer, Hooker Furnishings Corp., which reported weak second-quarter results.
The company’s adjusted earnings per share of $0.07 on revenues of $97.8 million fell short of the $0.18 and $127.2 million expected by analysts. That represents a 36% Yoy revenue decline, which executives don’t see improving much. ⚠️
CEO Jeremy Hoff said, “We believe the softer demand seen currently industry-wide is driven by retailers continuing to sell through over-inventoried positions and a short-term glut of heavily discounted home furnishings in the market…”
An inventory glut and weak demand mean a lot of discounting to attract customers, weighing on revenues and margins. Even if the industry clears its excess inventory, demand is expected to remain tepid due to inflation-strapped consumers cutting spending and stagnant housing activity.
$HOFT shares fell 17%, marking their worst one-day decline since June 2019. 📉