Hooker Furniture’s profit jumped about 300 percent in the second quarter.
By Duncan Adams
Hooker Furniture shuttered in March the 83-year-old company’s last domestic wood furniture factory. That action and other cost-cutting measures apparently have yielded what Hooker Furniture executives hoped — a significant boost to profit during a time of declining sales industrywide.
The Martinsville-based importer and manufacturer released sales and profit numbers this week for the company’s second quarter, which ended July 29. Profit jumped about 300 percent — up to $4.9 million, or 39 cents per share, from $1.2 million, or 10 cents per share during the second quarter 2013.
Profit increased even though sales for the quarter declined 11.5 percent to $73.4 million.
Six-month results fit the same pattern, with profits up and sales down when compared with the same period in 2013.
Larry Ryder is Hooker Furniture’s executive vice president and chief financial officer. On Thursday, Ryder said Hooker Furniture’s lines of imported wood furniture have long provided higher profit margins than furniture made in the company’s domestic plants — where labor costs and other overhead “were captured in the costs of goods.” Ultimately, wood furniture produced domestically could not compete with imports.
Ryder said the company has become more adept at managing import inventories and related costs. Last year, imported furniture sometimes backed up at ports of entry, incurring storage costs, and also required renting additional warehouse space, he said.
Hooker Furniture still produces upholstered furniture in the United States through subsidiaries Bradington-Young in Cherryville, N.C., and Sam Moore Furniture in Bedford. Hooker acquired Sam Moore in April.
In the company’s earnings report, Paul Toms, Hooker’s chairman, chief executive officer and president, said the company expects “the typical increase for furniture sales as we enter the fall.”
Ryder said Hooker Furniture believes sales will increase for the fall season, as they have historically, even as the housing slump and subprime mortgage woes continue and consumers become increasingly cautious about spending.
On Thursday, the price of Hooker Furniture stock, which trades on the Nasdaq exchange, closed at $20.59, up $3.16.
