HOOKER FURNISHINGS Corp (NASDAQ: HOFT)

Sector: Consumer Cyclical Industry: Furnishings, Fixtures & Appliances CIK: 0001077688
Market Cap 170.79 Mn
P/B 0.77
P/E 5.56
P/S 0.28
ROIC (Qtr) -10.39
Div Yield % 4.04
Rev 1y % (Qtr) -14.44
Total Debt (Qtr) 30.09 Mn
Debt/Equity (Qtr) 0.18
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About

Investment thesis

Bull case

  • Strong operating cash flow of 12.22M provides robust 0.41x coverage of total debt 30.09M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 226.12M provides 7.52x coverage of total debt 30.09M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 12.22M provides strong 12.86x coverage of stock compensation 950000, indicating sustainable incentive practices.
  • Operating cash flow of 12.22M provides exceptional 11.95x coverage of interest expenses 1.02M, showing strong debt service capability.
  • Robust free cash flow of 9.12M exceeds capital expenditure of 3.10M by 2.94x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 12.22M barely covers its investment activities of (3.46M), with a coverage ratio of -3.53, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 1.35M against inventory of 52.15M, the 0.03 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 12.22M provides thin coverage of dividend payments of (10M) with a -1.22 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 12.22M provides minimal -2.06x coverage of tax expenses of (5.92M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of (34.74M) show weak coverage of depreciation charges of 7.66M, with a -4.53 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Furnishings, Fixtures & Appliances
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SGI Somnigroup International Inc. 18.99 Bn 125.40 7.03 6.62 Bn
2 SN SharkNinja, Inc. 18.48 Bn 32.14 3.04 0.89 Bn
3 MHK Mohawk Industries Inc 8.23 Bn 19.54 0.77 2.34 Bn
4 PATK Patrick Industries Inc 5.10 Bn 175.24 10.70 1.53 Bn
5 WHR Whirlpool Corp /De/ 4.88 Bn 15.36 0.31 7.19 Bn
6 HNI Hni Corp 2.23 Bn 44.66 1.16 0.46 Bn
7 TILE Interface Inc 2.17 Bn 30.23 2.24 0.39 Bn
8 LEG Leggett & Platt Inc 1.59 Bn 5.64 0.39 1.66 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.71 0.98
EV to Cash from Ops. EV/CFO 6.78 -9.92
EV to Debt EV to Debt 5.64 25.70
EV to EBIT EV/EBIT 3.50 17.69
EV to EBITDA EV/EBITDA 3.13 15.96
EV to Free Cash Flow [EV/FCF] EV/FCF 7.79 17.28
EV to Market Cap EV to Market Cap 0.99 1.76
EV to Revenue EV/Rev 0.27 1.40
Price to Book Value [P/B] P/B 0.77 9.34
Price to Earnings [P/E] P/E 5.56 16.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -2.98 1.74
Dividend Payout Ratio % Div Payout % (Qtr) -32.70 9.37
Dividend per Basic Share Div per Share (Qtr) 0.92 0.51
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 107.10 28.74
Interest Coverage Int. cover (Qtr) -33.96 -23.23
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 10.82 -9.80
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -93.37 70.23
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 0.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -239.50 -367.80
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -287.11 -34.93
EBIT Growth (1y) % EBIT 1y % (Qtr) -236.39 -198.55
EBT Growth (1y) % EBT 1y % (Qtr) -208.59 -72.49
EPS Growth (1y) % EPS 1y % (Qtr) -208.79 -131.79
FCF Growth (1y) % FCF 1y % (Qtr) 205.55 0.53
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -7.21 -2.36
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.43 1.16
Cash Payout Ratio Cash Payout (Qtr) 0.65 0.13
Cash Ratio Cash Ratio (Qtr) 0.03 0.30
Current Ratio Curr Ratio (Qtr) 2.67 1.96
Debt to Equity Ratio Debt/Equity (Qtr) 0.18 0.57
Interest Cover Ratio Int Coverage (Qtr) -33.96 -23.23
Times Interest Earned Times Interest Earned (Qtr) -33.96 -23.23
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -7.90 -2.26
EBIT Margin % EBIT Margin % (Qtr) -10.14 -4.46
EBT Margin % EBT Margin % (Qtr) -10.44 -7.49
Gross Margin % Gross Margin % (Qtr) 22.80 33.73
Net Profit Margin % Net Margin % (Qtr) -8.70 -8.04