Hooker Furniture Reports First Quarter Loss, Delayed Revenue Estimates

Hooker’s furniture (NASDAQ:HOFT) reported quarterly loss of $0.39 per share compared to the Zacks Consensus Estimate of a loss of $0.03. For comparison, a year earlier earnings per share were $0.13. These numbers have been adjusted for one-off items.

This quarterly report presented an earnings surprise of -1,200%. A quarter ago, it was expected that this home furnishings company would post earnings of $0.10 per share when it actually produced earnings of $0.06, delivering a surprise of -40%.

Over the last four quarters, the company has surpassed consensus EPS estimates only once.

Hooker Furniture, which belongs to the Zacks Furniture industry, posted revenues of $93.57 million for the quarter ended April 2024, missing the Zacks Consensus Estimate by 1.44%. For comparison, revenues from the previous year amounted to $121.82 million. Over the last four quarters, the company has topped consensus revenue estimates only once.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will largely depend on management’s commentary on the earnings call.

Hooker Furniture shares are down about 33% year-to-date compared to the S&P 500’s gain of 12.3%.

What’s next for Hooker furniture?

Although Hooker Furniture has underperformed the market this year, the question that comes to investors’ minds is: what’s next for the company’s stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, the estimate revision trend for Hooker Furniture is unfavorable. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. Therefore, it can be expected that the company’s shares will underperform the market in the near future.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is $0.15 on $106.65 million in revenues for the coming quarter and $1.10 on $456.15 million in revenues for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, Furniture is currently in the bottom 34% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another action from the same industry, Bassett Furniture (NASDAQ:BSET) has not yet released earnings for the quarter ending May 2024.

The furniture retailer is expected to report quarterly loss of $0.12 per share in its upcoming report, representing a year-over-year change of -180%. The consensus EPS estimate for the quarter has been revised 37.5% down to the current level over the last 30 days.

Bassett Furniture’s revenue is expected to be $86.22 million, down 14.2% from the year-ago quarter.

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