Furniture/Furnishings Weekly
Hooker Furniture results highlighted the past week in the furniture/furnishings space. Hooker reported EPS of $0.65 on sales of $116.8 million, both ahead of FactSet consensus estimates of $0.28 and $116.3 million, respectively. A year ago, Hooker reported EPS of $0.42. Consistent with competitors and our view on the industry, margin improvement drove results. Operating margin expanded to 7.5% from 4.2% a year ago. Forward revenue expectations remain sluggish, but forward EPS estimates rose. The stock was up ~19% for the week. La-Z-Boy results the prior week likewise beat estimates, reporting EPS of $0.74 (adjusted) versus consensus of $0.62 on revenue of $511 million versus consensus of $504 million. Y/Y operating margin fell from 10% to 7.8% (adjusted). The stock moved up about 10% on earnings. Recent economic data has been modestly positive. Consumer confidence bumped higher from 99.1 to 102. Personal incomes rose about 0.25% in October. Third-quarter aggregate corporate profits (seasonally adjusted) rose 3.3% from the prior quarter to $3,277 billion, nearing the 3Q22 peak of $3,299 billion. We view corporate profits as a key leading indicator for the commercial/contract furniture space. Elsewhere in the furniture industry, Virco Manufacturing reported EPS of $0.62 on sales of $84.3 million, both ahead of expectations. Virco competes with HNI in furniture and furnishings for schools. The stock jumped 21%. In the retail space, RH earnings disappointed and the stock dropped 16%, apparently dragging other retailers along. RH reported a loss of $0.42 per share versus consensus of a profit of $0.94 per share. Management attributed weak demand to the housing market and global uncertainty.
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