Shaun Currie, CFA
Long/short equity, hedge fund analyst, momentum

Hooker Furniture: Company-Specific Risks Create An Opportunity On The Short Side

Hooker Furniture (NASDAQ:HOFT) recently reported quarterly earnings on September 4th, which sent the stock price lower. Management highlighted industry-wide trends as the cause for the decline, but that would contradict much of the commentary from the other furniture companies. I believe the company's underperformance is due the company-specific reasons including:

  1. The company's large exposure to casegoods, which is the weakening category in the furniture industry
  2. The company's price segment (this thesis is supported by the company's need to discount in the back half of the year)
  3. The stock is one of the most macro-sensitive, and we have seen headwinds forming in housing
  4. The company will begin to pick up the amount of discounting they do, which will put
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