Anthony Chester Lebiedzinski

Anthony Chester Lebiedzinski from Sidoti inquired about the drivers behind the increased orders and momentum observed in the Hooker branded and domestic upholstery segments, and later asked about the path to profitability for the Home Meridian (HMI) segment, including the required annual revenue for breakeven. He also sought clarification on the breakdown of restructuring impacts between cost of goods sold and selling and administrative expenses for the quarter.

Answer

CEO Jeremy Hoff attributed the order momentum to subtle macro improvements at the retail level, noting a strong Labor Day for customers and consistent performance across regions. Regarding HMI's profitability, Mr. Hoff emphasized that the primary driver is the 25% fixed cost reduction from fiscal 2025, largely from HMI overhead, expected to be mostly in place by the end of the third quarter. CFO Earl Armstrong clarified that approximately two-thirds of the $2 million restructuring costs for the quarter were allocated to cost of goods sold, with the remaining one-third in selling and administrative expenses.

Anthony Chester Lebiedzinski inquired about the drivers behind the increased orders and momentum observed in the Hooker branded and domestic upholstery segments, the consistency of recent holiday sales across regions, the annual revenue required for the Home Meridian segment to achieve breakeven, and a clarification on the breakdown of restructuring costs between cost of goods sold and selling and administrative expenses for the quarter and six-month period.

Answer

CEO Jeremy Hoff attributed the increased orders to subtle macro improvements at the retail level, noting a strong Labor Day for many partners and consistent momentum across the country. Regarding Home Meridian's profitability, Mr. Hoff stated that the primary driver is the 25% reduction in overall spending from fiscal 2025, largely impacting HMI's overhead, which is expected to be mostly intact by the end of the third quarter. CFO Earl Armstrong clarified that approximately two-thirds of the $2 million in restructuring costs for the quarter and the six-month period were allocated to cost of goods sold, with the remaining one-third in selling and administrative expenses.

Anthony Chester Lebiedzinski inquired about the drivers behind the increased orders and momentum observed in the Hooker branded and domestic upholstery segments, the consistency of recent holiday sales across regions, the strategy and revenue needed for the Home Meridian (HMI) segment to return to profitability, and a breakdown of the $2 million restructuring costs between cost of goods sold and SG&A for the quarter.

Answer

CEO Jeremy Hoff attributed the order momentum to subtle macro improvements and strong Labor Day sales, noting consistent performance across regions. He explained that HMI's path to profitability is largely dependent on the 25% fixed cost reduction from fiscal 2025, with much of the savings coming from HMI's overhead. CFO Earl Armstrong clarified that approximately two-thirds of the $2 million restructuring costs for the quarter were in cost of goods sold and one-third in SG&A, a ratio consistent for the six-month period.