What changed in this filing

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Item 9A. Controls and Procedures

2026-04-17 compared with 2025-04-18 · 898 added, 801 removed, 914 unchanged (65% of the section changed)

84 unchanged sentences

(a) Documents filed as part of this report on Form 10-K:

(1) The following reports and financial statements are included in this report on Form 10-K:

Management’s Report on Internal Control Over Financial Reporting

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of February 2, 2025 and January 28, 2024

Consolidated Statements of Operations for the fifty-three-week period ended February 2, 2025 and the fifty-two-week periods ended January 28, 2024 and January 29, 2023

Consolidated Statements of Comprehensive (Loss) / Income for the fifty-three-week period ended February 2, 2025 and the fifty-two-week periods ended January 28, 2024 and January 29, 2023

Consolidated Statements of Cash Flows for the fifty-three-week period ended February 2, 2025 and the fifty-two-week periods ended January 28, 2024 and January 29, 2023

Consolidated Statements of Shareholders’ Equity for the fifty-three-week period ended February 2, 2025 and the fifty-two-week periods ended January 28, 2024 and January 29, 2023

Notes to Consolidated Financial Statements

(1) The following reports and financial statements are included

in this report on Form 10-K:

Report on Internal Control Over Financial Reporting

Reports of Independent

Registered Public Accounting Firm

Consolidated Balance

Sheets as of February 1, 2026 and February 2, 2025

Consolidated Statements of Operations for

the fifty-two-week period ended February 1, 2026, the fifty-three-week period ended February 2, 2025 and the fifty-two-week period ended

January 28, 2024

Consolidated Statements of Comprehensive

(Loss) / Income for the fifty-two-week period ended February 1, 2026, the fifty-three-week period ended February 2, 2025 and the fifty-two-week

period ended January 28, 2024

Consolidated Statements of Cash Flows for

the fifty-two-week period ended February 1, 2026, the fifty-three-week period ended February 2, 2025 and the fifty-two-week period ended

January 28, 2024

Consolidated Statements of Shareholders’

Equity for the fifty-two-week period ended February 1, 2026, the fifty-three-week period ended February 2, 2025 and the fifty-two-week

period ended January 28, 2024

Notes to Consolidated

Financial Statements

(2) Financial Statement Schedules:

2 unchanged sentences

(b) Exhibits:

Amended and Restated Articles of Incorporation of the Company, as amended September 16, 2021 (incorporated by reference to Exhibit

3.1 of the Company’s Form 10-Q (SEC File No.

000-25349) for the quarter ended October 31, 2021) Amended and Restated Articles of Incorporation of the Company, as amended September 16, 2021 (incorporated by reference to Exhibit

3.1 of the Company’s Form 10-Q (SEC File No.

000-25349) for the quarter ended October 31, 2021)

3.2 Amended and Restated Bylaws of the Company as amended September 5, 2023 (incorporated by reference to Exhibit 3.2 of the Company’s

Form 10-Q (SEC File No.

Amended and Restated Articles of Incorporation of the Company,

as amended September 16, 2021 (incorporated by reference to Exhibit 3.1 of the Company’s Form 10-Q (SEC File No.

000-25349) for

the quarter ended October 31, 2021)

Amended and Restated Bylaws of the Company as amended September

5, 2023 (incorporated by reference to Exhibit 3.2 of the Company’s Form 10-Q (SEC File No.

000-25349) filed on September 8, 2023)

4.1 Amended and Restated Articles of Incorporation of the Company (See Exhibit 3.1)

Amended and Restated Articles of Incorporation of the Company

(See Exhibit 3.1)

Amended and Restated Bylaws of the Company (See Exhibit 3.2)

5 unchanged sentences

omitted and will be furnished to the Securities and Exchange Commission upon request.

10.1(a) Form of Executive Life Insurance Agreement dated December 31, 2003, between the Company and certain of

its executive officers (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q (SEC File No.

000-25349) for the quarter

ended February 29, 2004)*

10.1(b) Form of Outside Director Restricted Stock Agreement (incorporated by reference to Exhibit 99.1 of the

Form of Outside Director Restricted Stock Agreement (incorporated by reference to Exhibit 99.1 of the

Company’s Current Report on Form 8-K (SEC File No.

000-25349) filed on January 17, 2006)*

by reference to Appendix A of the Company’s Definitive Proxy Statement dated May 3, 2024 (SEC File No.

10.1(d) 2010 Amended and Restated Hooker Furniture Corporation Supplemental Retirement Income Plan, dated as of

2024 Amendment and Restatement of the Hooker Furnishings Corporation Stock Incentive Plan (incorporated by reference to Appendix A of the Company’s Definitive Proxy Statement dated May 3, 2024 (SEC File No.

2010 Amended and Restated Hooker Furniture Corporation Supplemental Retirement Income Plan, dated as of

June 8, 2010 (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q (SEC File No.

1 unchanged sentence

October 31, 2010)*

10.1(e) Form of Performance Stock Units Grant Agreement (incorporated by reference to Exhibit 10.1 of the Company’s

Form of Performance Stock Units Grant Agreement (incorporated by reference to Exhibit 10.1 of the Company’s

Quarterly Report on Form 10-Q (SEC File No.

000-25349) for the quarter ended July 28, 2024)*

10.1(f) Form of RSU Time-based Vesting Grant Agreement (incorporated by reference to Exhibit 10.2 of the Company’s

Form of RSU Time-based Vesting Grant Agreement (incorporated by reference to Exhibit 10.2 of the Company’s

Quarterly Report on Form 10-Q (SEC File No.

000-25349) for the quarter ended July 28, 2024)*

10.1(j) First Amendment to the 2010 Amended and Restated Hooker Furniture Corporation Supplemental Retirement Income plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No.

000-25349) filed with the SEC on November 15, 2019)*

10.1(k) Employment Agreement, dated February 20, 2025, by and between Hooker Furnishings Corporation and Jeremy

First Amendment to the 2010 Amended and Restated Hooker Furniture Corporation Supplemental Retirement

Income Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No.

000-25349) filed

with the SEC on November 15, 2019)*

Employment Agreement, dated February 20, 2025, by and between Hooker Furnishings Corporation and Jeremy

Hoff (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (SEC File No.

1 unchanged sentence

February 26, 2025).*

10.1(l) Employment Agreement, dated February 20, 2025, by and between Hooker Furnishings Corporation and C.

Employment Agreement, dated February 20, 2025, by and between Hooker Furnishings Corporation and C.

Armstrong, III (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (SEC File No.

1 unchanged sentence

on February 26, 2025).*

10.1(m) Employment Agreement, dated February 20, 2025, by and between Hooker Furnishings Corporation and Anne

Employment Agreement, dated February 20, 2025, by and between Hooker Furnishings Corporation and Anne

Smith (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (SEC File No.

1 unchanged sentence

February 26, 2025).*

Asset Purchase Agreement dated December 1, 2025 by and between the Company and Magnussen Home Furnishings,

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (SEC File No.

000-25349) filed on December

Amended and Restated Loan and Security Agreement, dated as of December 5, 2024, between Bank of America,

2 unchanged sentences

000-25349) filed on December 6, 2024).

10.3 Asset Purchase Agreement dated January 31, 2022 by and among the Company, Sunset West, Wes Stewart, Heath Malone and Martin Jamroz (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K (SEC File No.

Cooperation Agreement dated January 1, 2026 by and among Hooker Furnishings Corporation, Global Value

Investment Corporation and each of the parties listed on Schedule A thereto (incorporated by reference to Exhibit 10.1 to the Company’s

Current Report on Form 8-K (SEC File No.

000-25349) filed on January 2, 2026).

First Amendment to Cooperation Agreement dated February 17, 2026 by and among Hooker Furnishings Corporation,

Global Value Investment Corporation and each of the parties listed on Schedule A thereto (incorporated by reference to Exhibit 10.1 to

the Company’s Current Report on Form 8-K (SEC File No.

000-25349) filed on February 17, 2026).

3 unchanged sentences

a North Carolina limited liability company

Home Meridian Group,

LLC, a Virginia limited liability company

Sam Moore Furniture

6 unchanged sentences

Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

97 Hooker Furnishings Corporation Compensation Recoupment Policy, as amended and restated on September 5, 2023 (incorporated by reference to Exhibit 97 to the Company’s Annual Report on Form 10-K (SEC File No.

Hooker Furnishings Corporation Compensation Recoupment Policy, as amended and restated on September 5,

2023 (incorporated by reference to Exhibit 97 to the Company’s Annual Report on Form 10-K (SEC File No.

000-25349) filed on April

14 unchanged sentences

/s/ Jeremy R.

Chief Executive Officer and Director

(Principal Executive Officer)

Chief Executive Officer and Director (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934,

27 unchanged sentences

Management’s Report on Internal Control Over Financial Reporting F-2

Reports of Independent Registered Public Accounting Firm (PCAOB ID 185 ) F-3

Consolidated Balance Sheets as of February 2, 2025 and January 28, 2024 F-5

Consolidated Statements of Operations for the fifty-three-week period ended February 2, 2025 and the fifty-two-week periods ended January 28, 2024 and January 29, 2023 F-6

Consolidated Statements of Comprehensive (Loss)/Income for the fifty-three-week period ended February 2, 2025 and the fifty-two-week periods ended January 28, 2024 and January 29, 2023 F-7

Consolidated Statements of Cash Flows for the fifty-three-week period ended February 2, 2025 and the fifty-two-week periods ended January 28, 2024 and January 29, 2023.

Consolidated Statements of Shareholders’ Equity for the fifty-three-week period ended February 2, 2025 and the fifty-two-week periods ended January 28, 2024 and January 29, 2023 F-9

Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of February 1, 2026 and February 2, 2025 F-5

Consolidated Statements of Operations for the fifty-two-week period ended February 1, 2026, the fifty-three-week period ended February 2, 2025 and the fifty-two-week period ended January 28, 2024 F-6

Consolidated Statements of Comprehensive (Loss)/Income the fifty-two-week period ended February 1, 2026, the fifty-three-week period ended February 2, 2025 and the fifty-two-week period ended January 28, 2024 F-7

Consolidated Statements of Cash Flows for the fifty-two-week period ended February 1, 2026, the fifty-three-week period ended February 2, 2025 and the fifty-two-week period ended January 28, 2024 F-8

Consolidated Statements of Shareholders’ Equity the fifty-two-week period ended February 1, 2026, the fifty-three-week period ended February 2, 2025 and the fifty-two-week period ended January 28, 2024 F-9

Notes to Consolidated Financial Statements F-10

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April 17, 2026

Report of Independent Registered Public Accounting

To the Shareholders and Board of Directors

of Independent Registered Public Accounting Firm

the Shareholders and Board of Directors

Hooker Furnishings Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated

balance sheets of Hooker Furnishings Corporation and subsidiaries (the Company) as of February 2, 2025 and January 28, 2024, the related

consolidated statements of operations, comprehensive (loss)/income, cash flows, and shareholders’ equity for each of the years in

the three-year period ended February 2, 2025, and the related notes (collectively, the consolidated financial statements).

In our opinion,

the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of February 2,

2025 and January 28, 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended February

2, 2025, in conformity with U.S.

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheets of Hooker Furnishings Corporation and subsidiaries (the Company) as of

February 1, 2026 and February 2, 2025, the related consolidated statements of operations, comprehensive (loss)/income, cash flows, and

shareholders’ equity for each of the years in the three-year period ended February 1, 2026, and the related notes (collectively,

the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects,

the financial position of the Company as of February 1, 2026 and February 2, 2025, and the results of its operations and its cash flows

for each of the years in the three-year period ended February 1, 2026, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards

of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting

as of February 2, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee

of Sponsoring Organizations of the Treadway Commission, and our report dated April 18, 2025 expressed an unqualified opinion on the effectiveness

of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements

based on our audits.

also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s

internal control over financial reporting as of February 1, 2026, based on criteria established in Internal Control – Integrated

Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated April 17, 2026

expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required

to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations

of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that

was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material

to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication

of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are

not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or

disclosures to which it relates.

of audit evidence over revenue

discussed in Note 1 to the consolidated financial statements, the Company generates revenue primarily through the sale of home furnishings

and hospitality furniture products.

Revenue is recognized by the Company at the time of shipment to the customer.

The Company recorded

$320.9 million of net sales for the fiscal year ended February 1, 2026.

identified the evaluation of the sufficiency of audit evidence over revenue as a critical audit matter.

Subjective auditor judgment was

required due to the highly automated nature of certain processes to record revenue that involved interfacing data across multiple information

technology (IT) systems and the overall volume of transactions.

Additionally, IT professionals with specialized skills and knowledge

were required to evaluate the nature and extent of evidence obtained over revenue.

following are the primary procedures we performed to address this critical audit matter.

We applied auditor judgment to determine the

nature and extent of procedures to be performed over processing and recording of revenue.

We involved IT professionals with specialized

skills and knowledge, who assisted in 1) gaining an understanding of the systems used in the Company’s recognition of revenue and

2) evaluating the design and testing the operating effectiveness of certain internal controls over the revenue process.

This included

general IT and certain application controls interacting within the Company’s revenue recognition process.

For a sample of

revenue transactions, we assessed the recorded amount by comparing to underlying documentation, including invoices, cash receipts, bills

of lading, and contracts with customers.

We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures

performed, including the appropriateness of the nature and extent of such evidence.

have served as the Company’s auditor since 2003.

North Carolina

April 17, 2026

of Independent Registered Public Accounting Firm

the Shareholders and Board of Directors

Hooker Furnishings Corporation:

on Internal Control Over Financial Reporting

have audited Hooker Furnishings Corporation and subsidiaries' (the Company) internal control over financial reporting as of February

1, 2026, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring

Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control

over financial reporting as of February 1, 2026, based on criteria established in Internal Control – Integrated Framework (2013)

issued by the Committee of Sponsoring Organizations of the Treadway Commission.

also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated

balance sheets of the Company as of February 1, 2026 and February 2, 2025, the related consolidated statements of operations, comprehensive

(loss)/income, cash flows, and shareholders’ equity for each of the years in the three-year period ended February 1, 2026, and

the related notes (collectively, the consolidated financial statements), and our report dated April 17, 2026 expressed an unqualified

opinion on those consolidated financial statements.

Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment

of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control

over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting

based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the

2 unchanged sentences

and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is

a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated

to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter

in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sufficiency of audit evidence over revenue

As discussed in Note 1 to the consolidated financial

statements, the Company generates revenue primarily through the sale of home furnishings and hospitality furniture products.

recognized by the Company at the time of shipment to the customer.

The Company recorded $397.5 million of net sales for the fiscal year

ended February 2, 2025.

We identified the evaluation of the sufficiency

of audit evidence over revenue as a critical audit matter.

Subjective auditor judgment was required due to the highly automated nature

of certain processes to record revenue that involved interfacing data across multiple information technology (IT) systems and the overall

volume of transactions.

Additionally, IT professionals with specialized skills and knowledge were required to evaluate the nature and

extent of evidence obtained over revenue.

The following are the primary procedures we performed

to address this critical audit matter.

We applied auditor judgment to determine the nature and extent of procedures to be performed over

processing and recording of revenue.

We involved IT professionals with specialized skills and knowledge, who assisted in 1) gaining an

understanding of the systems used in the Company’s recognition of revenue and 2) evaluating the design and testing the operating

effectiveness of certain internal controls over the revenue process.

This included general IT and certain application controls interacting

within the Company’s revenue recognition process.

For a sample of revenue transactions, we assessed the recorded amount by comparing

to underlying documentation, including invoices, cash receipts, bills of lading, and contracts with customers.

We evaluated the sufficiency

of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of

such evidence.

We have served as the Company’s auditor

Charlotte, North Carolina

April 18, 2025

Report of Independent Registered Public Accounting

To the Shareholders and Board of Directors

Hooker Furnishings Corporation:

Opinion on Internal Control Over Financial Reporting

We have audited Hooker Furnishings Corporation

and subsidiaries' (the Company) internal control over financial reporting as of February 2, 2025, based on criteria established in Internal

Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February 2, 2025,

based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations

of the Treadway Commission.

We also have audited, in accordance with the standards

of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of February

2, 2025 and January 28, 2024, the related consolidated statements of operations, comprehensive (loss)/income, cash flows, and shareholders’

equity for each of the years in the three-year period ended February 2, 2025, and the related notes (collectively, the consolidated financial

statements), and our report dated April 18, 2025 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible

for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over

financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting.

Our responsibility

is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting

firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective

internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting

included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,

and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included

performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis

for our opinion.

Definition and Limitations of Internal Control

Over Financial Reporting

A company’s internal control over financial

reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of

financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control

over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,

accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions

are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and

that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition

of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal

control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future

periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance

with the policies or procedures may deteriorate.

Charlotte, North Carolina

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing

the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based

on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

that our audit provides a reasonable basis for our opinion.

and Limitations of Internal Control Over Financial Reporting

company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability

of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the

maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance

with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection

of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of

any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,

or that the degree of compliance with the policies or procedures may deteriorate.

North Carolina

April 17, 2026

HOOKER FURNISHINGS CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE

HOOKER FURNISHINGS CORPORATION AND SUBSIDIARIES

BALANCE SHEETS

(In thousands)

5 unchanged sentences

Prepaid expenses and other current assets

Current assets held for sale (See note 3)

Total current assets

5 unchanged sentences

Goodwill (See note 9)

Non-current assets held for sale (See note 3)

Total non-current assets

1 unchanged sentence

Current liabilities

Current portion of long-term debt (See note 13)

Trade accounts payable

4 unchanged sentences

Other accrued expenses

Current liabilities held for sale (See note 3)

Total current liabilities

2 unchanged sentences

Operating lease liabilities (See note 11)

Other long-term liabilities (See note 4)

Long-term liabilities held for sale (See note 3)

Total long-term liabilities

7 unchanged sentences

See accompanying Notes to Consolidated Financial Statements.

HOOKER FURNISHINGS CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS

OF OPERATIONS

(In thousands, except per

For the 53 Week Period Ended February 2, 2025 and the 52 Week Periods Ended January 28, 2024 and January 29, 2023

HOOKER FURNISHINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

For the 52 Week Period Ended February 1, 2026, the 53 Week Period Ended February 2, 2025 and the 52 Week Period Ended January 28, 2024

Cost of sales

Inventory write downs

Selling and administrative expenses

Trade name impairment charges

Goodwill and trade name impairment charges

Intangible asset amortization

2 unchanged sentences

Interest expense, net

(Loss) / income before income taxes

(Loss) / income from continuing operations before income taxes

Income tax (benefit) / expense

Net (loss) / income from continuing operations

Net loss from discontinued operations, net of taxes

Net (loss) / income

(Loss) / earnings per share:

(Loss) / earnings from continuing operations per share

Loss from discontinued operations per share

Basic (loss) / earnings per share

(Loss) / earnings from continuing operations per share

Loss from discontinued operations per share

Diluted (loss) / earnings per share

Weighted average shares outstanding:

1 unchanged sentence

See accompanying Notes to Consolidated Financial Statements.

HOOKER FURNISHINGS CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS

OF COMPREHENSIVE (LOSS) / INCOME

HOOKER FURNISHINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) / INCOME

(In thousands)

For the 53 Week Period Ended February 2, 2025 and the 52 Week Periods Ended January 28, 2024 and January 29, 2023

For the 52 Week Period Ended February 1, 2026, 53 Week Period Ended February 2, 2025 and the 52 Week Period Ended January 28, 2024

Net (Loss) / Income

Other comprehensive income:

Actuarial adjustment

Income tax effect on adjustment

Actuarial adjustments

Income tax effect on adjustments

Adjustments to net periodic benefit cost

1 unchanged sentence

See accompanying Notes to Consolidated Financial Statements.

HOOKER FURNISHINGS CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS

OF CASH FLOWS

HOOKER FURNISHINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

For the 53 Week Periods Ended February 2, 2025 and the 52 Week Periods Ended January 28, 2024 and January 29, 2023

For the 52 Week Period Ended February 1, 2026, the 53 Week Period Ended February 2, 2025 and the 52 Week Period Ended January 28, 2024

Operating Activities:

Net (loss) / income

Loss from discontinued operations, net of taxes

Adjustments to reconcile net income to net cash provided by operating activities:

Inventory valuation expense

Trade name impairment charge

Depreciation and amortization

Loss/(Gain) on disposal of assets

Deferred income tax expense/(benefit)

Goodwill and tradename impairment

Non-cash restricted stock and performance awards

Provision for doubtful accounts and sales allowances

Provision adjustment for doubtful accounts and sales

Gain on life insurance policies

Loss on disposal of assets

Changes in assets and liabilities:

11 unchanged sentences

Investing Activities:

Proceeds from sale of discontinued operations

Purchases of property, plant and equipment

Proceeds from sale of property and equipment

Premiums paid on life insurance policies

Proceeds received on life insurance policies

Proceeds from sale of property and equipment

Net cash used in investing activities

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Purchase and retirement of common stock

Proceeds from long-term loans

Payments for revolving credit facility

Net cash (used in)/provided by financing activities

Discontinued Operations:

Cash used in operating activities

Cash used in investing activities

Cash provided by / (used in) discontinued operations

Net (decrease) / increase in cash and cash equivalents

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See accompanying Notes to Consolidated Financial Statements.

HOOKER FURNISHINGS CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS

OF SHAREHOLDERS’ EQUITY

(In thousands, except per share data)

For the 53 Week Period Ended February 2, 2025 and the 52 Week Periods Ended January 28, 2024 and January 29, 2023

HOOKER FURNISHINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

thousands, except per share data)

For the 52 Week Period Ended February 1, 2026, the 53 Week Period Ended February 2, 2025 and the 52 Week Period Ended January 28, 2024

Comprehensive

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Cash dividends paid and accrued ($ 0.92 per share)

Purchase and retirement of common stock

Restricted stock grants, net of forfeitures

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Performance-based restricted stock units cost

Balance at January 28, 2024

Balance at February 2, 2025

Actuarial adjustments on defined benefit plan, net of tax of $ 94

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Balance at February 1, 2026

See accompanying Notes to

Consolidated Financial Statements.

See accompanying Notes to Consolidated Financial Statements.

HOOKER FURNISHINGS CORPORATION AND SUBSIDIARIES

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share amounts, in thousands unless otherwise indicated)

For the Fifty-Three Weeks Ended February 2, 2025

For the Fifty-Two Weeks Ended February 1, 2026

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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For financial reporting purposes, we are organized

into three operating segments and “All Other”, which includes the remainder of our businesses:

into two operating segments and “All Other”, which includes the remainder of our businesses:

◾ Hooker Branded , consisting of the operations

of our imported Hooker Casegoods and Hooker Upholstery businesses;

◾ Home Meridian , a stand-alone, mostly autonomous

business that serves a different type or class of customer than do our other operating segments and at much lower margins;

◾ Domestic Upholstery , which includes the

domestic upholstery manufacturing operations of Bradington-Young, HF Custom (formerly Sam Moore), Shenandoah Furniture and Sunset West;

◾ All Other, consisting of H Contract and

BOBO Intriguing Objects.

None of these operating segments were individually reportable;

therefore, we combined them in “All Other”

in accordance with ASC 280.

All Other, consisting of intercompany eliminations and operating segments that are not individually reportable;

therefore, we combined them in “All Other” in accordance with ASC 280.

Due to a change in the way management internally evaluates operating performance, beginning with the fiscal 2026 first quarter, Hooker Branded and Domestic Upholstery segments’ results now include all the sales of products formerly included in H Contract’s results.

Fiscal 2025 results discussed below have been recast to reflect this change.

During fiscal 2026, the Company completed the divestiture of Pulaski Furniture (“PFC”) and Samuel Lawrence (“SLF”) casegoods brands, formerly part of the Home Meridian segment.

As the PFC and SLF businesses have been classified as discontinued operations, the remaining business does not qualify as a reportable segment, therefore, the Home Meridian segment will be eliminated.

The Samuel Lawrence Hospitality product line will be reported within All Other.

Cash and Cash Equivalents

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made with specific customers.

Historically, in the Home Meridian segment, Clubs channel customers drove most of the customer allowance

activity due to their consumer-facing product return policies.

We based anticipated future claims on historical experience with these

We regularly review and revise accounts receivable

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See Note 10 for details.

Inventories, consisting of finished furniture for sale, raw materials,

manufacturing supplies and furniture in process, are stated at the lower of cost, or market value, with cost determined using the last-in,

first-out (LIFO) method.

Under this method, inventory is valued at cost, which is determined by applying a cumulative index to current

year inventory dollars.

We believe the use of the LIFO method results in a better matching of costs and revenues.

We review inventories

on hand and record an allowance for slow-moving and obsolete inventory based on historic experience and expected sales.

Inventories, consisting of finished furniture

for sale, raw materials, manufacturing supplies and furniture in process, are stated at the lower of cost, or market value, with cost

determined using the last-in, first-out (LIFO) method.

Under this method, inventory is valued at cost, which is determined by applying

a cumulative index to current year inventory dollars.

We believe the use of the LIFO method results in a better matching of costs and

We review inventories on hand and record an allowance for slow-moving and obsolete inventory based on historic experience and

expected sales.

Property, Plant and Equipment

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As interest rates are not explicitly stated or implicit in any of our leases, we utilized our collateralized incremental borrowing rate

based on our outstanding loans agreement, which bear interest at a rate per annum equal to the then-current Term SOFR plus a margin of

Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

at the adoption date of February 4, 2019.

The Company generally uses its incremental borrowing rate as the discount rate for the lease.

The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow

an amount equal to the lease payments under similar terms.

Lease terms may include options to extend or terminate the lease when it is

reasonably certain that we will exercise that option.

At the inception of a lease, we allocate the consideration

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and indefinite-lived intangible assets.

Our amortizable intangible assets are related to the Shenandoah, Sunset West and Home Meridian

acquisitions, as well as the rebranding of the Sam Moore product line, and includes customer relationships and trademarks.

Our indefinite

lived assets include goodwill related to the Shenandoah, Sunset West and BOBO acquisitions, as well as the Bradington-Young, Home Meridian

and BOBO tradenames.

We may acquire additional amortizable assets and/or indefinite lived intangible assets in the future.

Our indefinite-lived

intangible assets are not amortized but are tested for impairment annually or more frequently if events or circumstances indicate that

the asset might be impaired.

Our amortizable intangible assets are related to the Shenandoah and Sunset West acquisitions,

and includes customer relationships and trademarks.

Our indefinite lived assets include goodwill related to the Shenandoah and BOBO acquisitions,

as well as the remaining Bradington-Young, Home Meridian and BOBO tradenames.

We may acquire additional amortizable assets and/or indefinite

lived intangible assets in the future.

Our indefinite-lived intangible assets are not amortized but are tested for impairment annually

or more frequently if events or circumstances indicate that the asset might be impaired.

In accordance with ASC 350, Intangibles –

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Cash Surrender Value of Life Insurance Policies

We own seventy-one life insurance policies on

certain of our current and former executives and other key employees.

We own seventy life insurance policies on certain

of our current and former executives and other key employees.

These policies had a carrying value of $ 30.4 million at February 1, 2026

and have a face value of approximately $ 54 million as of that date.

Proceeds from the policies are used to fund certain employee

benefits and for other general corporate purposes.

Proceeds from the policies are used to fund certain employee benefits

and for other general corporate purposes.

We account for life insurance as a component of employee benefits cost.

Consequently,

the cost of the coverage and any resulting gains or losses related to those insurance policies are recorded as a decrease or increase

to operating income.

Cash payments that increase the cash surrender value of these policies are classified as investing outflows on the

Consolidated Statements of Cash Flows, with amounts paid in excess of the increase in cash surrender value included in operating activities.

Gains on life insurance policies, which typically occur at the time a policy is redeemed, are included in the reconciliation of net income

to net cash used in or provided by operating activities.

Consequently, the cost

of the coverage and any resulting gains or losses related to those insurance policies are recorded as a decrease or increase to operating

Cash payments that increase the cash surrender value of these policies are classified as investing outflows on the Consolidated

Statements of Cash Flows, with amounts paid in excess of the increase in cash surrender value included in operating activities.

on life insurance policies, which typically occur at the time a policy is redeemed, are included in the reconciliation of net income to

net cash used in or provided by operating activities.

Revenue Recognition

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Use of Estimates

The preparation of financial statements in conformity with U.S.

accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of:

(i) assets and liabilities,

including disclosures regarding contingent assets and liabilities at the dates of the financial statements;

and (ii) revenue and expenses

during the reported periods.

Significant items subject to such estimates and assumptions include inventory reserves, useful lives of fixed

and intangible assets;

The preparation of financial statements in conformity

generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of:

(i) assets and liabilities, including disclosures regarding contingent assets and liabilities at the dates of the financial statements;

and (ii) revenue and expenses during the reported periods.

Significant items subject to such estimates and assumptions include inventory

reserves, useful lives of fixed and intangible assets;

allowance for doubtful accounts;

deferred tax assets;

the valuation of fixed assets and goodwill;

our pension and

supplemental retirement income plans;

the valuation of fixed assets

and goodwill;

our pension and supplemental retirement income plans;

and stock-based compensation.

These estimates and assumptions are based on our best judgments.

evaluate these estimates and assumptions on an ongoing basis using historic experience and other factors, including the current economic

environment, which we believe to be reasonable under the circumstances.

We adjust our estimates and assumptions as facts and circumstances

These estimates and assumptions are

based on our best judgments.

We evaluate these estimates and assumptions on an ongoing basis using historic experience and other factors,

including the current economic environment, which we believe to be reasonable under the circumstances.

We adjust our estimates and assumptions

as facts and circumstances dictate.

Actual results could differ from our estimates.

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Segment Information.”

In December 2023, the FASB issued Accounting Standards

Updates “ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”.

The new guidance requires enhanced

effective tax rate reconciliation and income taxes paid disclosures.

The Company adopted this ASU on February 3, 2025 on a prospective

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements, but resulted

in expanded income tax disclosures.

See “Note 16, Income Taxes”.

In November 2024, the FASB issued ASU 2024-03,

“Disaggregation of income statement expenses”.

The new guidance requires new tabular disclosures to disaggregate prescribed

natural expenses underlying any income statement caption.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026

(our fiscal 2028).

We are currently evaluating the impact that the adoption of this new guidance will have on our consolidated financial

statements and will add necessary disclosures upon adoption.

We reviewed all other newly issued accounting

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◾ 2026 fiscal year and comparable terminology mean the fiscal year that began

January 29, 2024 and ended February 2, 2025;

February 3, 2025 and ended February 1, 2026;

◾ 2025 fiscal year and comparable terminology mean the fiscal year that began

January 30, 2023 and ended January 28, 2024;

January 29, 2024 and ended February 2, 2025;

◾ 2024 fiscal year and comparable terminology mean the fiscal year that began

January 30, 2023 and ended January 28, 2024.

NOTE 3 – EXIT AND RESTRUCTURING CHARGES

We recorded inventory valuation charges of $ 622 ,000,

$ 1.8 million and $ 28.8 million, respectively, in fiscal 2025, 2024 and 2023 for slow-moving and obsolete inventory.

During the fourth

quarter of fiscal 2023, we recorded net inventory valuation charges of approximately $ 24.4 million to write down the value of ACH and

PRI inventories and other excess inventories to market, including excess Samuel Lawrence Furniture brand inventories.

Management approved

a plan to exit the Accentrics Home (ACH) e-commerce brand of the Home Meridian segment along with repositioning the Prime Resources International

(PRI) at the end of fiscal 2023.

Due to historically high freight costs on these inventories, high handling costs, current demand and

industry discounting levels, as well as our current inventory levels, management determined that a viable and profitable market for these

products didn’t exist and was unwilling to continue to incur additional lease, warehouse, labor and other costs to store and sell

aging inventory below cost.

These inventory valuation charges were included as a separate line item below cost of goods sold in the Consolidated

Statement of Operations.

NOTE 4 – ACQUISITION

On January 31, 2022, the first day of our 2023

fiscal year, we entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Sunset HWM, LLC (“Sunset

West”) and its three members to acquire substantially all the assets of Sunset West (the “Sunset Acquisition”).

Simultaneously,

we closed on the transaction by paying $ 23.9 million in cash and $ 2 million subject to an escrow arrangement.

In the fourth quarter of

fiscal 2023, we received $ 639 ,000 from the seller for the final working capital adjustments.

Under the Asset Purchase Agreement, the Company

also assumed specified liabilities of Sunset West.

In accordance with FASB Accounting Standards Codification

Topic 805, “Business Combinations” (“ASC 805”), the Sunset Acquisition has been accounted for using the acquisition

method of accounting.

We recorded assets acquired, including identifiable intangible assets, and liabilities assumed, from Sunset West

at their respective fair values at the date of completion of the Sunset Acquisition.

The excess of the purchase price over the net fair

value of such assets and liabilities was recorded as goodwill.

The following table summarizes the fair values

of the identifiable assets acquired and liabilities assumed in the Sunset Acquisition as of January 29, 2023.

Fair Value Estimates of Assets Acquired and

Liabilities Assumed

The consideration and components of our initial

fair value allocation of the purchase price paid at closing and in the subsequent net working capital adjustment consisted of the following:

Purchase price consideration

Cash paid for assets acquired

Cash received from the seller for final working capital adjustment

Fair value of earnout

Total purchase price

Fair value estimates of assets acquired and liabilities assumed

Accounts receivable

Prepaid expenses and other current assets

NOTE 3 – DISCONTINUED OPERATIONS

During the third quarter of fiscal 2026, we determined

that the Home Meridian segment no longer aligned with our long-term strategy to streamline our portfolio and enhance profitability by

focusing on brands that generate consistent earnings.

As a result, we initiated a process to sell two brands in the segment.

1, 2025, we entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with a buyer to sell the Company’s

Pulaski Furniture (“PFC”) and Samuel Lawrence (“SLF”) casegoods brands, including specified assets and liabilities

associated with those brands.

We will retain the Samuel Lawrence brand in connection with the operation of its hospitality business.

On December 12, 2025, the Company completed the

sale and received cash proceeds of approximately $ 5.5 million, representing the estimated net book value of the assets at closing, less

a holdback amount of approximately $ 0.6 million, in accordance with the terms of the purchase agreement.

Final transaction pricing, including

working capital adjustments, resulted in a difference of approximately $ 0.3 million between the estimated fair value less costs to sell

determined at the measurement date and the final net proceeds received.

Following the sale, the Home Meridian segment

was eliminated, with its remaining Samuel Lawrence Hospitality brand reclassified into the “All Other” category.

We believe this transaction represents a single

disposal plan that constitutes a strategic shift expected to have a material effect on our operations and financial results.

the financial results of the PFC and SLF businesses are reflected in our consolidated financial statements as discontinued operations

for all periods presented.

The following table represents carrying amounts of

major classes of assets and liabilities as of the date of the divestiture:

Trade accounts receivable

Less allowances

Other current assets

Property, plant and equipment, net

Intangible assets

Customer deposits

Operating lease right-of-use assets

Total assets of discontinued operations

Accounts payable

Accrued expenses

Total purchase price

Property was recorded at fair value and primarily

consists of machinery and equipment.

Property and equipment will be amortized over their estimated useful lives.

Goodwill is calculated as the excess of the purchase

price over the net assets acquired.

The goodwill recognized is attributable to growth opportunities and expected synergies.

is expected to be deductible for income tax purposes.

Intangible assets consist of two separately identified assets:

◾ Sunset West customer relationships, which are

definite-lived intangible assets with an aggregate fair value of $ 10.4 million.

The customer relationships are amortizable and will be

amortized over a period of 10 years;

◾ The Sunset West trade name, which is a definite-lived

intangible asset with fair value of $ 1.1 million.

The trade name is amortizable and will be amortized over a period of 12 years.

◾ The total weighted average amortization period

for these assets is 10.2 years.

We incurred Sunset Acquisition-related costs of

$ 414,000 in fiscal 2022 and $ 69,000 in fiscal 2023.

These expenses were recorded as a component of “selling and administrative expenses”

in our fiscal 2022 and fiscal 2023 consolidated statements of operations.

Sunset West’s results are included in the Domestic Upholstery

segment’s results beginning with the fiscal 2023 first quarter.

5 – DOUBTFUL ACCOUNTS AND CUSTOMER ALLOWANCES

Accrued expenses and other current liabilities

Operating lease liabilities

Total liabilities of discontinued operations

Net assets disposed

Receivable from buyer

Selling costs

(Loss) on sale of the discontinued operations

Trade accounts receivable

Less allowances

Other current assets

Property, plant and equipment, net

Intangible assets

Operating lease right-of-use assets

Total assets of discontinued operations

Accounts payable

Accrued expenses and other current liabilities

Operating lease liabilities

Total liabilities of discontinued operations

The following table represents statements of operations

information of carrying amounts of major classes of line items constituting pretax loss of discontinued operations included as part of

discontinued operations in fiscal 2026, 2025 and 2024:

52 Weeks Ended

53 Weeks Ended

52 Weeks Ended

Cost of sales

Selling and administrative expenses

Trade name impairment charges

Intangible asset amortization

Other income items that are not major

Pretax loss of discontinued operations related to major classes

Loss on sale of the discontinued operations

(Loss) / income from discontinued operations before income taxes

Income tax (benefit) / expense

Net income / (loss) from discontinued operations

The significant components included in our Consolidated

Statements of Cash Flows for the discontinued operations are as follows:

52 Weeks Ended

53 Weeks Ended

52 Weeks Ended

Operating Activities:

Loss from discontinued operations, net of tax

Depreciation and amortization

Tradename impairment

Loss on sale of the discontinued operations

Loss / (gain) on disposal of assets

Changes in assets and liabilities:

Trade accounts receivable, net

Trade accounts payable

Other assets and liabilities

Cash provided by / (used in) operating activities from discontinued operations

Investing Activities:

Purchase of properties and equipment

Cash used in investing activities from discontinued operations

NOTE 4 – DOUBTFUL ACCOUNTS AND CUSTOMER ALLOWANCES

The activity in the allowance for doubtful accounts was:

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53 Weeks Ended

52 Weeks Ended

Balance at beginning of year

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Balance at end of year

6 – ACCOUNTS RECEIVABLE

NOTE 5 – ACCOUNTS RECEIVABLE

Gross accounts receivable

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Trade accounts receivable

7 – INVENTORIES

NOTE 6 – INVENTORIES

Finished furniture

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Reduction to LIFO basis

At February 2, 2025 and January 28, 2024, we had

At February 1, 2026 and February 2, 2025, we had

$ 178,000 and $ 253,000 , respectively, in consigned inventories, which are included in the “Finished furniture” line in the

At February 2, 2025 and January 28, 2024, we

held $ 7.2 million and $ 4.1 million, respectively, in inventory in Vietnam.

8 – PROPERTY, PLANT AND EQUIPMENT

At February 1, 2026 and February 2, 2025, we held

$ 11.9 million and $ 5.5 million, respectively, in inventory in Vietnam.

NOTE 7 – PROPERTY, PLANT AND EQUIPMENT

Depreciable Lives

Buildings and land improvements

Computer software and hardware

Machinery and equipment

Computer software and hardware

Leasehold improvements

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Property, plant and equipment, net

expenses for fiscal 2025, 2024, and 2023 were $ 4.4 million, $ 4.9 million, and $ 5.3 million, respectively.

Software Costs

costs incurred in connection with developing or obtaining computer software for internal use are capitalized.

These costs are amortized

over periods of ten years or less.

Capitalized software is reported as a component of computer software and hardware above and on the

property, plant, and equipment line of our consolidated balance sheets.

Depreciation expenses for fiscal 2026, 2025, and 2024 were $ 2.7 million,

$ 3.5 million, and $ 4.0 million, respectively.

Capitalized Software Costs

Certain costs incurred in connection with developing

or obtaining computer software for internal use are capitalized.

These costs are amortized over periods of ten years or less.

software is reported as a component of computer software and hardware above and on the property, plant, and equipment line of our consolidated

balance sheets.

The activity in capitalized software costs was:

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Balance end of year

9 – CLOUD COMPUTING HOSTING ARRANGEMENT

We are implementing a common Enterprise Resource

Planning (ERP) system across all divisions.

The ERP system went live at Sunset West in December 2022 and in the legacy Hooker divisions

and for consolidated reporting in early September 2023.

Due to our cost reduction initiatives, we have temporarily paused the ERP project

in the Home Meridian segment beginning in the third quarter of fiscal 2025.

NOTE 8 – CLOUD COMPUTING HOSTING ARRANGEMENT

We have implemented a common Enterprise

Resource Planning (ERP) system across all divisions.

The ERP system went live at Sunset West in December 2022 and in the legacy

Hooker divisions and for consolidated reporting in early September 2023.

Based on the provisions of ASU 2018-15, Intangibles —

Goodwill and Other — Internal-Use Software, we capitalize implementation costs associated with hosting arrangements that are service

Goodwill and Other — Internal-Use Software, we capitalize implementation costs associated with hosting arrangements that are

service contracts.

These costs are recorded in “other noncurrent assets” of our consolidated balance sheets.

We amortize on a straight-line

basis over 10 -years term as the system went live at Sunset West and the legacy Hooker divisions.

The amortization expenses are recorded

as a component of selling and administrative expenses in our consolidated statements of operations.

Implementation

costs of $ 3.0 million and interest expense of $ 239,000 were capitalized in fiscal 2025.

Implementation costs of $ 5.1 million and interest

these costs on a straight-line basis over a 10 -year term.

The amortization expenses are recorded as a component of selling and

administrative expenses in our consolidated statements of operations.

Implementation costs of $ 697,000 and interest

expense of $ 186,000 were capitalized in fiscal 2026.

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in fiscal 2025.

Amortization expenses of $ 1.2 million, $ 410,000 and $ 12,000 were recorded in fiscal 2025, 2024 and 2023, respectively.

The capitalized implementation costs at February 2, 2025 and January 28, 2024 were as follows

Implementation costs of $ 5.1 million and interest expense of $ 273,000 were capitalized in fiscal 2024.

Amortization expenses

of $ 1.4 million, $ 1.2 million and $ 410,000 were recorded in fiscal 2026, 2025 and 2024, respectively.

The capitalized implementation costs

at February 1, 2026 and February 2, 2025 were as follows:

February 1, 2026

January 28, 2024

February 2, 2025

Gross carrying amount

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Interest Expenses

10 – INTANGIBLE ASSETS AND GOODWILL

goodwill, some trademarks and trade names have indefinite useful lives and, consequently, are not subject to amortization for financial

reporting purposes but are tested for impairment annually or more frequently if events or circumstances indicate that the asset might

non-amortizable intangible assets consist of:

related to the Shenandoah (acquired 2017), Sunset West (acquired 2022) and BOBO (acquired

2023) acquisitions;

and tradenames related to the acquisitions of Bradington-Young (acquired 2002), Home Meridian

(acquired 2016), and BOBO Intriguing Objects (acquired 2023).

review goodwill and other intangible assets annually for impairment or more frequently if events or circumstances indicate that it might

accordance with ASC 350, Intangibles—Goodwill and Other, we perform our annual goodwill impairment test by comparing the

fair value of a reporting unit with its carrying amount.

Management judgment is a significant factor in the goodwill impairment evaluation

The computations require management to make estimates and assumptions, the most critical of which are potential future cash

flows and the appropriate discount rate.

Based on our internal analyses, at February 2, 2025, we concluded Shenandoah, Sunset West and

BOBO goodwill is not impaired.

NOTE 9 – INTANGIBLE ASSETS AND GOODWILL

Our goodwill, some trademarks and trade names

have indefinite useful lives and, consequently, are not subject to amortization for financial reporting purposes but are tested for impairment

annually or more frequently if events or circumstances indicate that the asset might be impaired.

Our non-amortizable intangible assets consist

◾ Goodwill related to the Shenandoah (acquired

2017) and BOBO (acquired 2023) acquisitions;

◾ Trademarks and tradenames related to the acquisitions

of Bradington-Young (acquired 2002), Home Meridian (acquired 2016), and BOBO Intriguing Objects (acquired 2023).

We review goodwill and other intangible assets

annually for impairment or more frequently if events or circumstances indicate that it might be impaired.

In accordance with ASC 350, Intangibles—Goodwill

and Other, we perform our annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.

Management judgment is a significant factor in the goodwill impairment evaluation process.

The computations require management to make

estimates and assumptions, the most critical of which are potential future cash flows and the appropriate discount rate.

In conjunction with our evaluation of the cash

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The inputs used in the trademarks and trade names analyses are considered Level 3 fair value measurements.

During fiscal 2025,

we reviewed triggering events under ASU 2021-03, Intangibles – Goodwill and Other (Topic 350).

Due to the decline in revenue driven

by the downturn in the furniture industry, changes in management’s strategy, and the bankruptcy of a key customer, we identified

triggering events that necessitated a valuation of the indefinite-lived trade names and trademarks in the Home Meridian segment.

Consequently,

we performed a valuation using the income approach method.

This methodology involved cash flow projections and growth rates for each trade

name over the next five years, provided by management, along with a royalty rate benchmark for companies engaged in similar activities.

Based on this analysis, we recorded non-cash impairment charges of $ 2.8 million for certain indefinite-lived trade names within the Home

Meridian segment.

At February 2,2025, we concluded the Bradington Young, the remaining Home Meridian and BOBO non-amortizable trade names

are not impaired.

Our amortizable intangible assets are recorded in the Home Meridian

and in Domestic Upholstery segments.

During the fiscal 2024 first quarter, we announced the rebranding of the Sam Moore product line to

As a result, we reassessed the characteristics of the Sam Moore trade name and the roll-out process, and determined

it qualified for amortization.

Consequently, we began amortizing the Sam Moore trade name over a 24 -month period using the straight-line

method beginning mid-April 2023.

of our intangible assets were as follows:

During the third quarter of fiscal 2026, adverse

economic conditions, including declines in our market value, as well as other changes in market dynamics, triggered an evaluation of our

goodwill and intangible assets.

We engaged an independent third-party valuation firm to assist in performing this assessment.

The valuation

procedures were performed with consideration of applicable accounting guidance, including Accounting Standards Codification (“ASC”)

Topic 350, Goodwill and Other Intangible Assets and ASC Topic 820, Fair Value Measurement.

The determination of the fair value of our Home

Meridian and Domestic Upholstery reporting units incorporated three valuation approaches:

(i) the Discounted Cash Flow method, which utilized

management’s cash flow projections and growth assumptions over an eight-year forecast period;

(ii) the Guideline Public Company

Method, which considered market data for comparable publicly traded companies;

and (iii) the Guideline Transaction Method, which considered

market multiples derived from transactions involving comparable businesses under varying risk profiles, geographies, and market conditions.

Based on the results of this valuation analysis,

we recorded non-cash impairment charges of $ 15.6 million related to continuing operations.

These charges consisted of $ 14.5 million related

to the impairment of Sunset West goodwill within the Domestic Upholstery segment, $ 558,000 for the trade name in the remaining HMI business

classified in All Other, and $ 556,000 for the Bradington-Young trade name in the Domestic Upholstery segment.

At February 1, 2026, we concluded the Shenandoah

goodwill and BOBO non-amortizable trade name are not impaired.

Our amortizable intangible assets are recorded

in the Domestic Upholstery segment, consisting of Shenandoah and Sunset West trade names and customer relations.

Details of our intangible assets were as follows:

February 1, 2026

January 28, 2024

Gross carrying

February 2, 2025

Gross carrying amount

Accumulated Amortization

Gross carrying amount

Accumulated Amortization

Intangible assets with indefinite lives:

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Intangible assets, net

The amounts are net of impairment charges of $ 16.4 million related to Shenandoah goodwill and $ 7.6 million related to certain Home Meridian segment trade names, of which $ 4.8 million were recorded in fiscal 2021 and $ 2.8 million were recorded in fiscal 2025.

estimated amortization expense associated with our amortizable intangible assets is expected to be as follows:

The amounts are net of impairment charges of $ 16.4 million related

to Shenandoah goodwill, $ 14.5 million related to Sunset West goodwill and $ 5.2 million related to certain trade names not related to

PFC and SLF, of which $ 2.6 million were recorded in fiscal 2021 and $ 2.5 million were recorded in fiscal 2025.

The estimated amortization expense associated with our amortizable

intangible assets is expected to be as follows:

2032 and thereafter

11 – FAIR VALUE MEASUREMENTS

value is the price that would be received upon the sale of an asset or paid upon the transfer of a liability (an exit price) in an orderly

transaction between market participants on the applicable measurement date.

We use a three-tier fair value hierarchy, which prioritizes

the inputs used in measuring fair value.

NOTE 10 – FAIR VALUE MEASUREMENTS

Fair value is the price that would be received

upon the sale of an asset or paid upon the transfer of a liability (an exit price) in an orderly transaction between market participants

on the applicable measurement date.

We use a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

These tiers include:

defined as observable inputs such as quoted prices in active markets for identical assets and liabilities;

defined as inputs other than quoted prices in active markets that are either directly or indirectly observable;

defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

of February 2, 2025 and January 28, 2024, Company-owned life insurance was measured at fair value on a recurring basis based on Level

The fair value of the Company-owned life insurance is determined by inputs that are readily available in public markets or

can be derived from information available in publicly quoted markets.

Additionally, the fair value of the Company-owned life insurance

is marked to market each reporting period and any change in fair value is reflected in income for that period.

assets measured at fair value on a recurring basis at February 2, 2025 and January 28, 2024 were as follows:

Level 1, defined as observable inputs

such as quoted prices in active markets for identical assets and liabilities;

Level 2, defined as inputs other than

quoted prices in active markets that are either directly or indirectly observable;

Level 3, defined as unobservable inputs

for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of February 1, 2026 and February 2, 2025, Company-owned

life insurance was measured at fair value on a recurring basis based on Level 2 inputs.

The fair value of the Company-owned life insurance

is determined by inputs that are readily available in public markets or can be derived from information available in publicly quoted markets.

Additionally, the fair value of the Company-owned life insurance is marked to market each reporting period and any change in fair value

is reflected in income for that period.

Our assets measured at fair value on a recurring

basis at February 1, 2026 and February 2, 2025 were as follows:

Fair value at February 1, 2026

value at January 28, 2024

Fair value at February 2, 2025

(In thousands)

1 unchanged sentence

Company-owned life insurance

fiscal 2020, we adopted Accounting Standards Codification Topic 842 Leases.

See “Leases” under Note 1 for a discussion

of our accounting policies and elections under Topic 842.

We have a sub-lease at one of our warehouses and we recognized sub-lease income

of $ 125,000 , $ 146,000 and $ 445,000 in fiscal 2025, 2024, and 2023, respectively.

components of lease cost and supplemental cash flow information for leases in fiscal 2025, 2024, and 2023 were:

NOTE 11 – LEASES

In fiscal 2020, we adopted Accounting Standards

Codification Topic 842 Leases.

See “Leases” under Note 1 for a discussion of our accounting policies and elections

under Topic 842.

The analysis below includes office space, warehousing facilities, showroom space, and office equipment related to our

continuing operations.

Leases and sub-leases associated with the discontinued operations of the PFC and SLF businesses, as well as the

former Home Meridian segment, have been excluded for all periods presented.

We have a sub-lease at one of our warehouses and

we recognized sub-lease income of $ 252,000 in fiscal 2026.

The components of lease cost and supplemental

cash flow information for leases in fiscal 2026, 2025, and 2024 were:

52 Weeks Ended

2 unchanged sentences

February 1, 2026

January 28, 2024

February 2, 2025

January 28, 2024

5 unchanged sentences

The right-of-use assets and lease liabilities

recorded on our Consolidated Balance Sheets as of February 2, 2025 and January 28, 2024 were:

recorded on our Consolidated Balance Sheets as of February 1, 2026 and February 2, 2025 were:

February 1, 2026

January 28, 2024

February 2, 2025

Property and equipment

3 unchanged sentences

Total operating lease liabilities

The weighted-average discount rate is 5.46 %.

weighted-average remaining lease term is 6.2 years.

The weighted-average discount rate is 4.91 % at

February 1, 2026.

The weighted-average remaining lease term is 5.5 years.

The following table reconciles the undiscounted

future lease payments for operating leases to the operating lease liabilities recorded in the consolidated balance sheet at February 1,

Lease Payments

Undiscounted Future Operating Lease Payments

2032 and thereafter

2 unchanged sentences

Present value of lease payments

In March 2025, the Company announced the decision

to exit the Savannah, Georgia distribution center.

See Note 22 “Subsequent Events” for additional information.

The termination

of the Georgia warehouse lease will reduce lease right-of-use assets and liabilities by approximately $11 million and decrease lease payments

by $ 10 million over the next five years , totaling a $ 14.5 million reduction over the remaining lease term.

13 – LONG-TERM DEBT

December 5, 2024, the Company and its wholly owned subsidiaries, Bradington-Young, LLC, Sam Moore Furniture LLC and Home Meridian Group,

LLC (together with the Company, the “Borrowers”), entered into an Amended and Restated Loan and Security Agreement (the “Amended

and Restated Loan Agreement”) with Bank of America, N.A.

As of February 1, 2026, the Company had an additional

lease for an administrative office in High Point, North Carolina.

This lease is expected to commence in April of calendar 2026 with an

initial lease term of seven years and estimated future minimum rental commitments of approximately $ 2.2 million.

Since the lease has not

yet commenced, the undiscounted amounts are not included in the table above.

NOTE 12 – LONG-TERM DEBT

On December 5, 2024, the Company and its wholly

owned subsidiaries, Bradington-Young, LLC, Sam Moore Furniture LLC and Home Meridian Group, LLC (together with the Company, the “Borrowers”),

entered into an Amended and Restated Loan and Security Agreement (the “Amended and Restated Loan Agreement”) with Bank of

America, N.A.

(“BofA”), as lender.

The Amended and Restated Loan Agreement

amends, restates and replaces the Second Amended and Restated Loan Agreement, dated as of September 29, 2017, between the Borrowers and

BofA, as amended (the “Existing Loan Agreement”).

The outstanding principal amount of loans and letters of credit issued

under the Existing Loan Agreement and used to collateralize certain insurance arrangements and for imported product purchases will remain

outstanding as loans and letters of credit under the Amended and Restated Loan Agreement.

The Amended and Restated Loan Agreement amends, restates and replaces the Second Amended

and Restated Loan Agreement, dated as of September 29, 2017, between the Borrowers and BofA, as amended (the “Existing Loan Agreement”).

The outstanding principal amount of loans and letters of credit issued under the Existing Loan Agreement and used to collateralize certain

insurance arrangements and for imported product purchases will remain outstanding as loans and letters of credit under the Amended and

Restated Loan Agreement.

The Amended and Restated Loan Agreement provides

2 unchanged sentences

conditions, including agreement by BofA to increase the Revolving Commitment by such amount.

Proceeds of loans and letters of credit

under the Amended and Restated Loan Agreement are available for general working capital and other corporate purposes of the Borrower.

of loans and letters of credit under the Revolving Commitment is capped by a borrowing base formula calculated as of any date as the

sum for the Borrowers of (a) the value of their accounts receivable, (b) the value of their inventory, (c) the value of their in-transit

inventory and (d) the life insurance cash surrender value of company-owned life insurance policies, in each case subject to eligibility

requirements, advance rates, valuation metrics, reductions for write-offs and other dilutive items and reserves (the “Borrowing

The lesser of the Revolving Commitment and the Borrowing Base, in each case net of the principal amount of outstanding

loans and the face amount of letters of credit, constitutes “Availability” under the Amended and Restated Credit Agreement.

loans under the Amended and Restated Loan Agreement will bear interest at a rate per annum equal to the then-current Term SOFR Rate for

a period of one month plus 0.10% plus a margin of 1.75%.

Proceeds of loans and letters of credit under

the Amended and Restated Loan Agreement are available for general working capital and other corporate purposes of the Borrower.

Availability of loans and letters of credit under

the Revolving Commitment is capped by a borrowing base formula calculated as of any date as the sum for the Borrowers of (a) the value

of their accounts receivable, (b) the value of their inventory, (c) the value of their in-transit inventory and (d) the life insurance

cash surrender value of company-owned life insurance policies, in each case subject to eligibility requirements, advance rates, valuation

metrics, reductions for write-offs and other dilutive items and reserves (the “Borrowing Base”).

The lesser of the Revolving

Commitment and the Borrowing Base, in each case net of the principal amount of outstanding loans and the face amount of letters of credit,

constitutes “Availability” under the Amended and Restated Credit Agreement.

Outstanding loans under the Amended and Restated

Loan Agreement will bear interest at a rate per annum equal to the then-current Term SOFR Rate for a period of one month plus 0.10% plus

a margin of 1.75%.

The Term SOFR Rate will be adjusted on a monthly basis.

Letters of credit are

subject to a letter of credit fee equal to the actual daily amount of undrawn letters of credit multiplied by a per annum rate of 1.75 %

and a fronting fee equal to the actual daily amount of undrawn letters of credit multiplied by a per annum rate of 0.125 %.

pay a monthly unused commitment fee that is based on the average daily unused amount of Revolving Commitment multiplied by a per annum

rate of 0.25 %.

All accrued interest and fees are payable in cash monthly in arrears.

may prepay any outstanding principal amounts borrowed under the Amended and Restated Loan Agreement at any time, without penalty provided

that any payment is accompanied by all accrued interest owed.

Subject to the Borrowers having sufficient borrowing base capacity and

customary conditions precedent to borrowing, amounts repaid may be reborrowed.

The Revolving Commitment will terminate, and all amounts

outstanding thereunder will be due and payable, on December 5, 2029.

obligations under the Amended and Restated Loan Agreement are secured by a first priority security interest in substantially all of the

assets of the Borrowers, other than real estate, including all Company-owned life insurance policies, all accounts receivable, all inventory,

all intellectual property, all equipment and all other personal property.

Amended and Restated Loan Agreement includes customary representations and warranties and requires the Borrowers to comply with customary

affirmative and negative covenants, including, among other things, a financial covenant requiring the maintenance of a ratio of (x) EBITDA

net of capital expenditures (to the extent not paid using Borrowed Money) to (y) the sum of debt service and dividends paid, in each

case as of the last day of each month for the trailing twelve-month period ending on such day, of at least 1.0 to 1.0, if an event of

default has occurred and is continuing or Availability has fallen below 10% of the Revolving Commitment at any time (until such time

as both Availability is 10% or greater and no event of default exists, for the 30 consecutive days prior to such month end).

Amended and Restated Loan Agreement also limits the Borrowers’ right to incur other indebtedness, make certain investments and

create liens upon our assets, subject to certain exceptions, among other restrictions.

The Amended and Restated Loan Agreement does not

restrict the Company’s ability to pay cash dividends on, or repurchase, shares of its common stock, subject to (a) no default existing

prior to or resulting from such dividend or repurchase, (b) Availability is not less than 15% of the Revolving Commitment for each of

the preceding 45 days prior to announcement of such dividend or repurchase and after giving pro forma effect to such dividend or repurchase

and (c) if Availability is less than 20% of the Revolving Commitment on any day in such 45-day period, the Borrowers are in compliance

with the financial covenant described above after giving effect to such dividend or repurchase.

incurred $ 480,000 in debt issuance costs in connection with our term loans.

As of February 2, 2025, unamortized loan costs of $ 464,000

were netted against the carrying value of our term loans on our consolidated balance sheets.

of February 2, 2025, we had $ 22.1 million principal amount of outstanding loans and $ 6.7 million face amount of letters of credit.

had $ 41.2 million of Availability based on the current Borrowing Base.

There were no additional borrowings outstanding under the Amended

and Restated Loan Agreement as of February 2, 2025.

14 – EMPLOYEE BENEFIT PLANS

Savings Plans

sponsor a tax-qualified 401(k) retirement plan covering substantially all employees.

This plan assists employees in meeting their savings

and retirement planning goals through employee salary deferrals and discretionary employer matching contributions.

Our contributions

to the plan amounted to $ 1.8 million in fiscal 2025 and 2024, and $ 1.5 million in fiscal 2023.

and SERP Overview

maintain two “frozen” retirement plans, which are paying benefits and may include active employees among the participants

but we do not expect to add participants to these plans in the future.

Letters of credit are subject to a letter of credit fee equal

to the actual daily amount of undrawn letters of credit multiplied by a per annum rate of 1.75 % and a fronting fee equal to the actual

daily amount of undrawn letters of credit multiplied by a per annum rate of 0.125 %.

We must also pay a monthly unused commitment fee that

is based on the average daily unused amount of Revolving Commitment multiplied by a per annum rate of 0.25 %.

All accrued interest and

fees are payable in cash monthly in arrears.

We may prepay any outstanding principal amounts

borrowed under the Amended and Restated Loan Agreement at any time, without penalty provided that any payment is accompanied by all accrued

interest owed.

Subject to the Borrowers having sufficient borrowing base capacity and customary conditions precedent to borrowing, amounts

repaid may be reborrowed.

The Revolving Commitment will terminate, and all amounts outstanding thereunder will be due and payable, on

December 5, 2029.

The obligations under the Amended and Restated

Loan Agreement are secured by a first priority security interest in substantially all of the assets of the Borrowers, other than real

estate, including all Company-owned life insurance policies, all accounts receivable, all inventory, all intellectual property, all equipment

and all other personal property.

The Amended and Restated Loan Agreement includes

customary representations and warranties and requires the Borrowers to comply with customary affirmative and negative covenants, including,

among other things, a financial covenant requiring the maintenance of a ratio of (x) EBITDA net of capital expenditures (to the extent

not paid using Borrowed Money) to (y) the sum of debt service and dividends paid, in each case as of the last day of each month for the

trailing twelve-month period ending on such day, of at least 1.0 to 1.0, if an event of default has occurred and is continuing or Availability

has fallen below 10% of the Revolving Commitment at any time (until such time as both Availability is 10% or greater and no event of default

exists, for the 30 consecutive days prior to such month end).

The Amended and Restated Loan Agreement also limits

the Borrowers’ right to incur other indebtedness, make certain investments and create liens upon our assets, subject to certain

exceptions, among other restrictions.

The Amended and Restated Loan Agreement does not restrict the Company’s ability to pay cash

dividends on, or repurchase, shares of its common stock, subject to (a) no default existing prior to or resulting from such dividend or

repurchase, (b) Availability is not less than 15% of the Revolving Commitment for each of the preceding 45 days prior to announcement

of such dividend or repurchase and after giving pro forma effect to such dividend or repurchase and (c) if Availability is less than 20%

of the Revolving Commitment on any day in such 45-day period, the Borrowers are in compliance with the financial covenant described above

after giving effect to such dividend or repurchase.

We incurred $ 480,000 in debt issuance costs in

fiscal 2025 and an additional $ 118,000 in fiscal 2026 in connection with our term loans.

As of February 1, 2026, unamortized loan costs

of $ 476,000 were netted against the carrying value of our term loans on our consolidated balance sheets.

As of February 1, 2026, we had $ 3.6 million principal

amount of outstanding loans and $ 3.6 million face amount of letters of credit.

We had $ 62.8 million of Availability based on the current

Borrowing Base.

There were no additional borrowings outstanding under the Amended and Restated Loan Agreement as of February 1, 2026.

NOTE 13 – EMPLOYEE BENEFIT PLANS

Employee Savings Plans

We sponsor a tax-qualified 401(k) retirement plan

covering substantially all employees.

This plan assists employees in meeting their savings and retirement planning goals through employee

salary deferrals and discretionary employer matching contributions.

Our contributions to the plan amounted to $ 1.5 million in fiscal 2026

and $ 1.8 million in fiscal 2025 and 2024.

Executive Benefits

SRIP and SERP Overview

We maintain two “frozen” retirement

plans, which are paying benefits and may include active employees among the participants but we do not expect to add participants to these

plans in the future.

The two plans include:

supplemental retirement income plan (“SRIP”) for certain former and current executives

of Hooker Furnishings Corporation;

Pulaski Furniture Corporation Supplemental Executive Retirement Plan (“SERP”)

for certain former executives.

SRIP provides monthly payments to participants or their designated beneficiaries based on a participant’s “final average

monthly earnings” and “specified percentage” participation level as defined in the plan, subject to a vesting schedule

that may vary for each participant.

The benefit is payable for a 15-year period following the participant’s termination of employment

due to retirement, disability or death .

In addition, the monthly retirement benefit for each participant, regardless of age, becomes

fully vested and the present value of that benefit is paid to each participant in a lump sum upon a change in control of the Company

as defined in the plan.

The SRIP is unfunded and all benefits are payable solely from our general assets.

The plan liability is based

on the aggregate actuarial present value of the vested benefits to which participating employees are currently entitled but based on

the employees’ expected dates of separation or retirement.

No employees have been added to the plan since 2008 and we do not expect

to add additional employees in the future, due to changes in our compensation philosophy, which emphasizes more performance-based compensation

measures in total management compensation.

SERP provides monthly payments to eight retirees or their designated beneficiaries based on a defined benefit formula as defined in the

The benefit is payable for the life of the retiree with the following forms available as a reduced monthly benefit:

Certain and Life;

50% or 100% Joint and Survivor Annuity.

◾ a supplemental retirement income plan (“SRIP”)

for certain former and current executives of Hooker Furnishings Corporation;

◾ the Pulaski Furniture Corporation Supplemental

Executive Retirement Plan (“SERP”) for certain former executives.

This is excluded from the disposal group classified as held

SRIP and SERP

The SRIP provides monthly payments to participants

or their designated beneficiaries based on a participant’s “final average monthly earnings” and “specified percentage”

participation level as defined in the plan, subject to a vesting schedule that may vary for each participant.

The benefit is payable for

a 15-year period following the participant’s termination of employment due to retirement, disability or death .

In addition, the

monthly retirement benefit for each participant, regardless of age, becomes fully vested and the present value of that benefit is paid

to each participant in a lump sum upon a change in control of the Company as defined in the plan.

The SRIP is unfunded and all benefits

are payable solely from our general assets.

The plan liability is based on the aggregate actuarial present value of the vested benefits

to which participating employees are currently entitled but based on the employees’ expected dates of separation or retirement.

No employees have been added to the plan since 2008 and we do not expect to add additional employees in the future, due to changes in

our compensation philosophy, which emphasizes more performance-based compensation measures in total management compensation.

The SERP provides monthly payments to eight retirees

or their designated beneficiaries based on a defined benefit formula as defined in the plan.

The benefit is payable for the life

of the retiree with the following forms available as a reduced monthly benefit:

Ten-year Certain and Life;

50% or 100% Joint and Survivor

The SERP is unfunded and all benefits are payable solely from our general assets.

The plan liability is based on the aggregate actuarial present value of the benefits to which retired employees are currently entitled.

No employees have been added to the plan since 2006 and we do not expect to add additional employees in the future.

SRIP and SERP information as of each fiscal year-end (the measurement date) is as follows:

The plan liability is based on the aggregate

actuarial present value of the benefits to which retired employees are currently entitled.

No employees have been added to the plan since

2006 and we do not expect to add additional employees in the future.

Summarized SRIP and SERP information as of each

fiscal year-end (the measurement date) is as follows:

SRIP (Supplemental Retirement Income Plan)

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Other changes recognized in accumulated other comprehensive income

Net (gain) / loss arising during period

Net loss / (gain) arising during period

Amortizations:

Total recognized in other comprehensive income

Total recognized in net periodic

benefit cost and accumulated other comprehensive income

Total recognized in net periodic benefit cost and accumulated other comprehensive income

Assumptions used to determine net periodic benefit cost:

3 unchanged sentences

Fiscal 2032 through fiscal 2036

the SRIP, the discount rate used to determine the fiscal 2025 net periodic cost was 5.05%, based on the Mercer yield curve and the plan’s

expected benefit payments.

At February 2, 2025, combining the Mercer yield curve and the plan’s expected benefit payments resulted in

a rate of 5.30 %.

This rate was used to value the ending benefit obligations.

At February 2, 2025, the actuarial gain related

For the SRIP, the discount rate used to determine

the fiscal 2026 net periodic cost was 5.30%, based on the Mercer yield curve and the plan’s expected benefit payments.

1, 2026, combining the Mercer yield curve and the plan’s expected benefit payments resulted in a rate of 5.30 %.

This rate was used to

value the ending benefit obligations.

At February 1, 2026, the actuarial loss related

to the SRIP amounted to $ 124,000 , net of tax of $ 30,000 .

At January 28, 2024, the actuarial gain related to the SRIP amounted to $ 150,000 ,

At February 2, 2025, the actuarial gain related to the SRIP amounted to $ 64,000 ,

net of tax of $ 15,000 .

At January 29, 2023, the actuarial gain related to the SRIP amounted to $ 1 million, net of tax of $ 288 ,000.

estimated actuarial gain that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the 2026

fiscal year is $ 178,845 .

At January 28, 2024, the actuarial gain related to the SRIP amounted to $ 150,000 , net of tax of $ 41,000 .

The estimated

actuarial gain that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the 2027 fiscal

year is $ 192,000 .

There is no expected prior service (cost) or credit amortization.

21 unchanged sentences

Total recognized in other comprehensive income

Total recognized in net periodic

benefit cost and accumulated other comprehensive income

Total recognized in net periodic benefit cost and accumulated other comprehensive income

Assumptions used to determine net periodic benefit cost:

7 unchanged sentences

1, 2026, combining the Aon AA Above Median yield curve and the plan’s expected benefit payments created a rate of 4.9%.

was used to value the ending benefit obligations.

At January 28, 2024, combining the Aon AA Above Median yield curve and the plan’s

expected benefit payments created a rate of 4.90%.

This rate was

used to value the ending benefit obligations.

At February 2, 2025, combining the Aon AA Above Median yield curve and the plan’s expected

benefit payments created a rate of 5.40%.

This rate was used to determine the fiscal 2026 net periodic cost.

February 2, 2025 and January 28, 2024, the actuarial loss related to the SERP was $ 28 ,000 and $ 29 ,000, respectively.

15 – SHARE-BASED COMPENSATION

At February 1, 2026 and February 2, 2025, the

actuarial loss related to the SERP was $ 76,000 and $ 28,000 , respectively.

NOTE 14 – SHARE-BASED COMPENSATION

Our Stock Incentive Plan permits incentive awards

9 unchanged sentences

of the Company’s common stock.

account for restricted stock awards as “non-vested equity shares” until the awards vest or are forfeited.

Restricted stock

awards to non-employee directors and certain other management employees vest if the director/employee remains on the board/employed generally

over 1 to 3 years.

Annual restricted stock awards for non-employee directors do not vest unless the director remains in service to the

next annual meeting following annual shareholder meeting.

The fair value of each share of restricted stock is the market price of our

common shares on the grant date.

We account for restricted stock awards as “non-vested

equity shares” until the awards vest or are forfeited.

Restricted stock awards to non-employee directors and certain other management

employees vest if the director/employee remains on the board/employed generally over 1 to 3 years.

Annual restricted stock awards for

non-employee directors do not vest unless the director remains in service to the next annual meeting following annual shareholder meeting.

The fair value of each share of restricted stock is the market price of our common shares on the grant date.

We have awarded time-based restricted stock units

14 unchanged sentences

Under the 2024 Plan, dividends declared on unvested RSU awards accumulate in cash and are paid out only upon vesting of the underlying

have issued Performance-based Restricted Stock Units (“PSUs”) to our named executive officers since fiscal 2019.

entitles the executive officer to receive one share of our common stock based on the achievement of two specified performance conditions

if the executive officer remains continuously employed through the end of the three-year performance period.

Historically, one target

is based on our annual average growth in our EPS over the performance period and the other target is based on EPS growth over the performance

period compared to our peers.

For the PSU issued under the 2024 Plan, one target is the Company’s absolute EPS compound annual

growth rate and the other target is the relative Total Shareholder Return as measured against the Company’s compensation peer group.

The payout or settlement of the PSUs will be made in shares of our common stock.

Dividends declared on unvested PSU awards accumulate

in cash and are paid out only upon vesting of the underlying shares.

We have issued Performance-based Restricted Stock

Units (“PSUs”) to our named executive officers since fiscal 2019.

Each PSU entitles the executive officer to receive one share

of our common stock based on the achievement of two specified performance conditions if the executive officer remains continuously employed

through the end of the three-year performance period.

Historically, one target is based on our annual average growth in our EPS over the

performance period and the other target is based on EPS growth over the performance period compared to our peers.

For the PSU issued under

the 2024 Plan, one target is the Company’s absolute EPS compound annual growth rate and the other target is the relative Total Shareholder

Return as measured against the Company’s compensation peer group.

The payout or settlement of the PSUs will be made in shares of

our common stock.

Dividends declared on unvested PSU awards accumulate in cash and are paid out only upon vesting of the underlying shares.

Share-based compensation expense related to restricted

16 unchanged sentences

Awards outstanding at January 28, 2024

Awards outstanding at February 2, 2025

53 weeks ended

52 weeks ended

Awards outstanding at February 1, 2026

52 week ended

February 1, 2026

53 week ended February 2, 2025

52 week ended January 28, 2024

Time-based Restricted Stock

7 unchanged sentences

Stock based compensation expense

As of February 2,

2025 January 28,

2024 January 29,

As of February 1, 2026 February 2, 2025 January 28, 2024

Time-based Restricted Stock

7 unchanged sentences

Weighted-average remaining period 1.9 1.5 1.7

16 – EARNINGS PER SHARE

refer you to the Earnings Per Share disclosure in Note 2-Summary of Significant Accounting Policies, above, for more detailed information

concerning the calculation of earnings per share.

stock awards are designed to encourage retention and to provide an incentive for increasing shareholder value.

We have issued restricted

stock awards to non-employee members of the board of directors since 2006 and to certain non-executive employees since 2014.

issued RSUs to certain senior executives since fiscal 2012 under the Company’s Stock Incentive Plan.

Each RSU entitles an executive

to receive one share of the Company’s common stock if the executive remains continuously employed with the Company through the

end of a three-year service period.

The RSUs may be paid in shares of our common stock, cash or both at the discretion of the Compensation

Committee of our board of directors.

We have issued PSUs to certain senior executives since fiscal 2019 under the Company’s Stock

Incentive Plan.

Each PSU entitles the executive officer to receive one share of our common stock based on the achievement of two specified

performance conditions if the executive officer remains continuously employed through the end of the three-year performance period.

target is based on our annual average growth in our EPS over the performance period and the other target is based on EPS growth over

the performance period compared to our peers.

For the PSUs issued under the Company’s 2024 Plan in fiscal 2025, one target is the

Company’s annual EPS growth over the performance period and the other target is the Company’s total shareholder return during

the performance period compared to the Company’s peer group.

The payout or settlement of the PSUs will be made in shares of our

common stock.

expect to continue to grant these types of awards annually in the future.

The following table sets forth the number of outstanding restricted

stock awards and RSUs and PSUs, net of forfeitures and vested shares, as of the fiscal period-end dates indicated:

NOTE 15 – EARNINGS PER SHARE

We refer you to the Earnings Per Share disclosure in Note 2-Summary

of Significant Accounting Policies, above, for more detailed information concerning the calculation of earnings per share.

All stock awards are designed to encourage retention

and to provide an incentive for increasing shareholder value.

We have issued restricted stock awards to non-employee members of the board

of directors since 2006 and to certain non-executive employees since 2014.

We have issued RSUs to certain senior executives since fiscal

2012 under the Company’s Stock Incentive Plan.

Each RSU entitles an executive to receive one share of the Company’s common

stock if the executive remains continuously employed with the Company through the end of a three-year service period.

The RSUs may be

paid in shares of our common stock, cash or both at the discretion of the Compensation Committee of our board of directors.

We have issued

PSUs to certain senior executives since fiscal 2019 under the Company’s Stock Incentive Plan.

Each PSU entitles the executive officer

to receive one share of our common stock based on the achievement of two specified performance conditions if the executive officer remains

continuously employed through the end of the three-year performance period.

Historically, one target is based on our annual average growth

in our EPS over the performance period and the other target is based on EPS growth over the performance period compared to our peers.

For the PSUs issued under the Company’s 2024 Plan in fiscal 2025 and afterwards, one target is the Company’s annual EPS growth

over the performance period and the other target is the Company’s total shareholder return during the performance period compared

to the Company’s peer group.

The payout or settlement of the PSUs will be made in shares of our common stock.

We expect to continue to grant these types of

awards annually in the future.

The following table sets forth the number of outstanding restricted stock awards and RSUs and PSUs, net

of forfeitures and vested shares, as of the fiscal period-end dates indicated:

Restricted shares

RSUs and PSUs

restricted shares, RSUs and PSUs awarded that have not yet vested are considered when computing diluted earnings per share.

fiscal 2024, we purchased and retired 620,634 shares of our common stock (at an average price of $ 18.79 per share) under the $ 20 million

share repurchase authorization approved by our board of directors in fiscal 2023 and the additional $ 5 million share repurchase authorization

approved by our board of directors in the second quarter of fiscal 2024.

These repurchases reduced our total outstanding shares and,

consequently, reduced the weighted outstanding shares used in our calculation of earnings per share for fiscal 2024 shown below.

share repurchase program was completed during the fiscal 2024 third quarter.

following table sets forth the computation of basic and diluted earnings per share:

All restricted shares, RSUs and PSUs awarded that

have not yet vested are considered when computing diluted earnings per share.

During fiscal 2024, we purchased and retired 620,634

shares of our common stock (at an average price of $ 18.79 per share) under the $ 20 million share repurchase authorization approved by

our board of directors in fiscal 2023 and the additional $ 5 million share repurchase authorization approved by our board of directors

in the second quarter of fiscal 2024.

These repurchases reduced our total outstanding shares and, consequently, reduced the weighted outstanding

shares used in our calculation of earnings per share for fiscal 2024 shown below.

The share repurchase program was completed during the

fiscal 2024 third quarter.

The following table sets forth the computation

of basic and diluted earnings per share:

52 Weeks Ended

1 unchanged sentence

52 Weeks Ended

Net (loss) / income

Dividends on unvested restricted shares

Net earnings allocated to unvested restricted stock

Earnings available for common shareholders

Net (loss) / income from continuing operations

Unvested participating restricted stock dividends

Net earnings allocated to unvested participating restricted stock

(Loss) / Earnings from continuing operations available for common shareholders

(Loss) / Earnings from discontinued operations available for common shareholders

(Loss) / Earnings available for common shareholders

Weighted average shares outstanding for basic earnings per share

Dilutive effect of unvested restricted stock awards

Dilutive effect of unvested restricted stock, RSU and PSU awards

Weighted average shares outstanding for diluted earnings per share

Basic (loss) / earnings from continuing operations per share

Basic (loss) / earnings from discontinued operations per share

Basic (loss) / earnings per share

Diluted (loss) / earnings from continuing operations per share

Diluted (loss) / earnings from discontinued operations per share

Diluted (loss) / earnings per share

to net loss in fiscal 2025 and 2023, approximately 186,000 and 117,000 shares, respectively, would have been antidilutive and are therefore

excluded from the calculation of earnings per share.

17 – INCOME TAXES

provision for income taxes was as follows for the periods indicated:

* Due to net loss in fiscal 2026 and 2025, approximately 128,000

and 186,000 shares, respectively, would have been antidilutive and are therefore excluded from the calculation of earnings per share.

NOTE 16 – INCOME TAXES

Our provision for income taxes was as follows

for the periods indicated:

52 Weeks Ended

6 unchanged sentences

Income tax (benefit)/expense

tax benefit for fiscal 2025 was $ 4.0 million, of which $ 3.9 million benefit was allocated to continuing operations and $ 51,000 tax benefit

was allocated to other comprehensive income.

Total tax expense for fiscal 2024 was $ 2.6 million, of which $ 2.6 million expense was allocated

to continuing operations and $ 41 ,000 tax benefit was allocated to other comprehensive income.

Total tax benefit for fiscal 2023 was $ 1.5

million, of which $ 1.8 million benefit was allocated to continuing operations and $ 288 ,000 tax expense was allocated to other comprehensive

effective income tax rate differed from the federal statutory tax rate as follows for the periods indicated:

Total tax benefit for fiscal 2026 was $ 8.9 million,

of which $ 4.3 million benefit was allocated to continuing operations, $ 4.5 million benefit was allocated to discontinued operations, and

$ 94,000 tax benefit was allocated to other comprehensive income.

Total tax benefit for fiscal 2025 was $ 4.0 million,

of which $ 1.9 million benefit was allocated to continuing operations, $ 2.0 million benefit was allocated to discontinued operations, and

$ 51,000 tax benefit was allocated to other comprehensive income.

Total tax expense for fiscal 2024 was $ 2.6 million,

of which $ 3.4 million expense was allocated to continuing operations, $ .8 million benefit allocated to discontinued operations, and $ 41,000

tax benefit was allocated to other comprehensive income.

The effective income tax rate differed from the federal statutory tax

rate as follows for the periods indicated:

52 Weeks Ended

2 unchanged sentences

Income taxes at statutory rate

Increase (decrease) in tax rate resulting from:

State taxes, net of federal benefit

Foreign taxes

Nontaxable or nondeductible items:

Officer’s life insurance

Nondeductible meals and entertainment

Stock compensation

Change in valuation allowance

Effective income tax rate

tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities for the period

indicated were:

State and local income taxes in California and

Virginia comprise the majority of the domestic state and local taxes, net of federal category, for all years.

All of the foreign taxes

relate to China for all years.

In fiscal year 2026, income taxes paid (net of

refunds) were ($ 445,000 ), including ($ 491,000 ) for federal, $ 16,000 for foreign (China) and $ 30,000 for state.

All of the state tax is

In fiscal year 2025, income taxes paid (net of refunds)

were ($ 2.4 million), including ($ 2.2 million) for federal, $ 41,000 for foreign (China) and ($ 288,000 ) for state.

Included in state income

taxes are ($ 124,000 ) for California and ($ 110,000 ) for Virginia.

In fiscal year 2024, income taxes paid (net of

refunds) were $ 23,000 , including none for federal, $ 47,000 for foreign (China) and ($ 25,000 ) for state.

Included in state income taxes

are ($ 58,000 ) for Georgia, $ 29,000 for Texas and $ 5,000 for Oregon.

The tax effects of temporary differences that

give rise to significant portions of the deferred tax assets and liabilities for the period indicated were:

Intangible assets

7 unchanged sentences

Valuation allowance

Research and development costs

Property, plant and equipment

1 unchanged sentence

Net deferred tax assets

At February 2, 2025 and January 28, 2024, our

net deferred tax assets were $ 16.1 million and $ 12.0 million, respectively.

The increase in the valuation allowance of $ 122,000 was due

to additional foreign tax credit carryforward and a portion of state loss carryforwards.

We expect to fully realize the benefit of the

deferred tax assets, with the exception of a portion of the foreign tax credit carryforward, in future periods when the amounts become

We have federal and state net operating loss carryforwards

of $ 41.8 million and $ 28.6 million, respectively, which have various expiration dates beginning in fiscal 2039 through fiscal 2045, with

some having an indefinite carryforward period.

We have foreign tax credit carryforwards of $ 188,000 which expire beginning in fiscal 2029

through fiscal 2034.

We also have charitable contribution carry forwards of $ 4.5 million, which expire in fiscal 2028 and fiscal 2030.

accounting standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement

of a tax position taken or expected to be taken in a tax return.

The guidance also addresses de-recognition, classification, interest

and penalties, accounting in interim periods and disclosure.

At February 1, 2026 and February 2, 2025 our net

deferred tax assets were $ 24.9 and $ 16.1 million, respectively.

The decrease in the valuation allowance of $ 25,000 was due to additional

foreign tax credit carryforward and a portion of state loss carryforwards.

We expect to fully realize the benefit of the net deferred

tax assets, after valuation allowance, in future periods when the amounts become deductible.

We have federal and state net operating loss carry

forwards of $ 58.4 million and $ 41.2 million, respectively, which have various expiration dates beginning in fiscal 2039 through fiscal

2046, with all the federal and $ 20.9 million of state net operating loss carry forwards having an indefinite carry forward period.

have foreign tax credit carry forwards of $ 204,000 which expire beginning in fiscal 2029 through fiscal 2036.

We also have charitable

contribution carry forwards of $ 5.4 million, which expire in fiscal 2028 through fiscal 2031.

Current accounting standards prescribe a recognition

threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be

taken in a tax return.

The guidance also addresses de-recognition, classification, interest and penalties, accounting in interim periods

and disclosure.

We do not have unrecognized tax benefits as of February 1, 2026.

years ending January 30, 2022 through February 2, 2025 remain subject to examination by federal and state taxing authorities.

18 – SEGMENT INFORMATION

a public entity, we are required to present disaggregated information by segment using the management approach.

The objective of this

approach is to allow users of our financial statements to see our business through the eyes of management based upon the way management

reviews performance and makes decisions.

The management approach requires segment information to be reported based on how management

internally evaluates the operating performance of the company’s business units or segments.

The objective of this approach is to

meet the basic principles of segment reporting as outlined in ASC 280 Segments (“ASC 280”), which are to allow the

users of our financial statements to:

understand our performance;

assess our prospects for future net cash flows;

more informed judgments about us as a whole.

We define our segments as those operations our chief

operating decision maker (“CODM”) regularly reviews to analyze performance and allocate resources.

We measure the results

of our segments using, among other measures, each segment’s net sales, gross profit, key operating expenses and operating income,

as determined by the information regularly reviewed by the CODM.

The Company’s CODM is the Chief Executive Officer.

financial reporting purposes, we are organized into three reportable segments and “All Other”, which includes the remainder

of our businesses:

Branded , consisting of the operations of our imported Hooker Casegoods and Hooker Upholstery

Meridian , a business acquired at the beginning of fiscal 2017, is a stand-alone, mostly

autonomous business that serves a different type or class of customer than do our other operating

segments and at much lower margins;

Upholstery, which includes the domestic upholstery manufacturing operations of Bradington-Young,

HF Custom (formerly Sam Moore), Shenandoah Furniture and Sunset West;

Other , consisting of H Contract and BOBO.

None of these operating segments were individually

therefore, we combined them in “All Other” in accordance with ASC

Tax years ending January 29, 2023 through February

1, 2026 remain subject to examination by federal and state taxing authorities.

NOTE 17 – SEGMENT INFORMATION

As a public entity, we are required to present

disaggregated information by segment using the management approach.

The objective of this approach is to allow users of our financial

statements to see our business through the eyes of management based upon the way management reviews performance and makes decisions.

management approach requires segment information to be reported based on how management internally evaluates the operating performance

of the company’s business units or segments.

The objective of this approach is to meet the basic principles of segment reporting

as outlined in ASC 280 Segments (“ASC 280”), which are to allow the users of our financial statements to:

◾ better understand our performance;

◾ better assess our prospects for future net cash

◾ make more informed judgments about us as a whole.

We define our segments as those operations our

chief operating decision maker (“CODM”) regularly reviews to analyze performance and allocate resources.

The Company’s

CODM is the Chief Executive Officer.

The CODM regularly reviews net sales, gross profit, and operating income by segment as the primary

measures of segment performance.

The CODM reviews net sales as a primary indicator of operational performance, assessing how much revenue

is brought in from core business activities, after returns, allowances, and discounts, which reflects demand and execution of each segment’s

Gross profit, which is derived from net sales and cost of sales, is reviewed by the CODM as a diagnostic metric, particularly

useful in evaluating margin trends.

Operating income is the key profitability metric used to assess performance across segments and make

decisions related to resource allocation, including capital expenditures, headcount, and other investment initiatives.

Each of these metrics

are considered in budgeting, forecasting, and operational planning decisions.

For financial reporting purposes, we are organized

into two reportable segments and “All Other”, which includes the remainder of our businesses:

◾ Hooker Branded , consisting of the operations

of our imported Hooker Casegoods and Hooker Upholstery businesses;

◾ Domestic Upholstery, which includes the

domestic upholstery manufacturing operations of Bradington-Young, HF Custom (formerly Sam Moore), Shenandoah Furniture and Sunset West;

All Other , consisting of intercompany eliminations and operating segments that are not individually reportable.

Fiscal 2025 results discussed below have been recast to reflect this change.

Subsequent to the third quarter of fiscal 2026, the Company completed the divestiture of the Pulaski Furniture (“PFC”) and Samuel Lawrence (“SLF”) casegoods brands, formerly part of the Home Meridian segment.

As the PFC and SLF businesses have been classified as discontinued operations, the remaining business does not qualify as a reportable segment, therefore, we combined them in “All Other” in accordance with ASC 280.

The Home Meridian segment has been eliminated.

The Samuel Lawrence Hospitality product line, along with the remaining Home Meridian businesses, has been reported within All Other.

The following table presents segment information

1 unchanged sentence

Prior-year information has been recast to reflect the changes in segments discussed above.

53 Weeks Ended 52 Weeks Ended 52 Weeks Ended

February 2, 2025 January 28, 2024 January 29, 2023

% Net % Net % Net

Net Sales Sales Sales Sales

52 Weeks Ended

53 Weeks Ended

52 Weeks Ended

February 1, 2026

February 2, 2025

January 28, 2024

Hooker Branded

Home Meridian 130,816 32.9 % 143,538 33.1 % 216,338 37.1 %

Domestic Upholstery

All Other 5,963 1.5 % 6,271 1.4 % 4,112 0.7 %

Consolidated $ 397,465 100 % $ 433,226 100 % $ 583,102 100 %

Cost of Sales

Hooker Branded

Domestic Upholstery

Gross Profit/(Loss)

Hooker Branded

Home Meridian 25,386 19.4 % 24,367 17.0 % ( 2,620 ) - 1.2 %

Domestic Upholstery

All Other ( 214 ) - 3.6 % 1,890 30.1 % 2,410 58.6 %

Consolidated $ 88,648 22.3 % $ 108,692 25.1 % $ 93,294 16.0 %

Selling and Administrative Expenses

Hooker Branded

Home Meridian 29,593 22.6 % 28,575 19.9 % 33,215 15.4 %

Domestic Upholstery

All Other 3,186 53.4 % 2,692 42.9 % 2,176 52.9 %

Consolidated $ 100,215 25.2 % $ 92,678 21.4 % $ 95,815 16.4 %

Trade name impairment

Home Meridian $ 2,831 2.2 % $ - 0.0 % $ 13 0.0 %

Consolidated $ 2,831 0.7 % $ - 0.0 % $ 13 0.0 %

Goodwill and Intangible assets impairment

Domestic Upholstery

Intangible assets amortization

Home Meridian $ 1,311 1.0 % $ 1,322 0.9 % $ 1,334 0.6 %

Domestic Upholstery

Consolidated $ 3,687 0.9 % $ 3,656 0.8 % $ 3,512 0.6 %

Operating (Loss) / Income

Hooker Branded

Home Meridian ( 8,349 ) - 6.4 % ( 5,530 ) - 3.9 % ( 37,181 ) - 17.2 %

Domestic Upholstery

All Other ( 3,400 ) - 57.0 % ( 803 ) - 12.8 % 234 5.7 %

Consolidated $ ( 18,085 ) - 4.6 % $ 12,358 2.9 % $ ( 6,046 ) - 1.0 %

Other Income, net

Hooker Branded

Home Meridian 170 0.1 % 765 0.5 % 387 0.2 %

Domestic Upholstery

All Other 701 11.8 % 14 0.2 % - 0.0 %

Consolidated $ 2,933 0.7 % $ 1,653 0.4 % $ 416 0.1 %

Interest expense - Corporate

Income taxes - Corporate

Net (loss) / income - Corporate $ ( 12,507 ) - 3.1 % $ 9,865 2.3 % $ ( 4,312 ) - 0.7 %

Net (loss) / income from continuing operations - Corporate

Restructuring Costs

Hooker Branded

Home Meridian 851 0.7 % $ - 0.0 % $ - 0.0 %

Domestic Upholstery

All Other 2,011 33.7 % $ - 0.0 % $ - 0.0 %

Consolidated $ 4,907 1.2 % $ - 0.0 % $ - 0.0 %

Bad debt related to major customer bankruptcy

Home Meridian 3,084 2.4 % $ - 0.0 % $ - 0.0 %

Consolidated $ 3,084 0.8 % $ - 0.0 % $ - 0.0 %

Capital Expenditures

Hooker Branded

Home Meridian 280 1,679 1,280

Domestic Upholstery

All Other 11 91 -

Consolidated $ 3,243 $ 6,815 $ 4,199

Depreciation & Amortization

Hooker Branded

Home Meridian 2,590 2,689 2,886

Domestic Upholstery

All Other 107 27 11

Consolidated $ 9,229 $ 8,956 $ 8,816

of February 2,

We recorded $ 2.0 million and $ 4.1 million in restructuring

costs in fiscal 2026 and 2025, respectively, primarily related to severance and warehouse consolidation initiatives.

Within discontinued operations, we recorded restructuring

costs of $ 3.9 million in fiscal 2026, including $ 2.4 million associated with the exit of the Savannah warehouse, which primarily supported

the PFC and SLF businesses.

These costs included fixed asset write-offs, inventory liquidation and relocation expenses, and severance.

In connection with the divestiture, we recorded a $ 6.9 million valuation allowance.

In addition, these businesses incurred approximately

$ 1.0 million of bad debt expense related to a customer bankruptcy.

As of February 1, 2026, we had accrued restructuring

charges of approximately $ 298,000 .

The balance is expected to be paid during the next 12 months.

The restructuring costs were recorded

under cost of sales and selling and administrative expenses in the statements of operations.

Hooker Branded

Home Meridian

Domestic Upholstery

Goodwill and Intangibles

Assets Held for Sale, net

Consolidated Assets

by product type are as follows:

Consolidated Goodwill and Intangibles

Total Consolidated Assets

Sales by product type are as follows:

Net Sales (in thousands)

significant long-lived assets were held outside the United States at either February 2, 2025 or January 28, 2024.

International customers

accounted for less than 2 % of consolidated invoiced sales in fiscal 2025, 2024, and 2023.

We define international sales as sales outside

of the United States and Canada.

19 – COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

and Off-Balance Sheet Arrangements

had letters of credit outstanding totaling $ 6.7 million on February 2, 2025.

We utilize letters of credit to collateralize certain imported

inventory purchases and certain insurance arrangements.

the ordinary course of our business, we may become involved in legal proceedings involving contractual and employment relationships,

product liability claims, intellectual property rights and a variety of other matters.

We do not believe that any pending legal proceedings

will have a material impact on our financial position or results of operations.

business is subject to a number of significant risks and uncertainties, including our reliance on offshore sourcing, any of which can

adversely affect our business, results of operations, financial condition or future prospects.

20 – CONCENTRATIONS OF RISK

Products Sourcing

source imported products through multiple vendors, located in six countries.

Because of the large number and diverse nature of the foreign

factories from which we can source our imported products, we have some flexibility in the placement of products in any particular factory

located in Vietnam are a critical resource for Hooker Furnishings.

In fiscal 2025, imported products sourced from Vietnam accounted for

76 % of our import purchases and our top five suppliers accounted for 63 % of our fiscal 2025 import purchases.

A disruption in our supply

chain from Vietnam could significantly impact our ability to fill customer orders for products manufactured at that factory or in that

Materials Sourcing for Domestic Upholstery Manufacturing

five largest domestic upholstery suppliers accounted for 31 % of our raw materials supply purchases for domestic upholstered furniture

manufacturing operations in fiscal 2025.

One supplier accounted for 7 % of our raw material purchases in fiscal 2025.

Should disruptions

with these suppliers occur, we believe we could successfully source these products from other suppliers without significant disruption

to our operations.

Concentration

of Sales and Accounts Receivable

customer accounted for approximately 6 % of our consolidated sales in fiscal 2025.

Our top five customers accounted for 24 % of our fiscal

2025 consolidated sales.

The loss of any one or more of these customers could adversely affect our

earnings, financial condition and liquidity.

At February 2, 2025, 36 % of our consolidated accounts receivable is concentrated

in our top five customers.

21 – RELATED PARTY TRANSACTIONS

lease the four properties utilized in Shenandoah’s operations.

One of our employees has an ownership interest in the entities that

own these properties.

The leases commenced on September 29, 2017 with an option to renew each for an additional seven years .

leases include annual rent escalation clauses with respect to minimum lease payments after the initial 84-month term of the lease is

In addition to monthly lease payments, we also incur expenses for property taxes, routine repairs and maintenance and other

operating expenses.

The total amount of the lease expenses and other expenses do not have a material effect on our consolidated financial

22 – SUBSEQUENT EVENTS

March 5, 2024, our Board of Directors declared a quarterly cash dividend of $ 0.23 per share, payable on March 31, 2024 to shareholders

of record at March 17, 2025.

Warehouse Exit

On March 24, 2025, we announced our planned exit

of our Savannah, Georgia warehouse facility and the consolidation of warehousing operations in existing facilities.

We recorded $ 1.3 million

in non-cash related charges in fiscal 2025 and currently expect to record between $ 3.0 -$ 4.0 million in non-cash related charges in fiscal

2026 in connection with this exit.

Amounts recorded in fiscal 2025 consist of inventory reserves for items at or near the end of their

product life cycles that would incur significant costs to move to our existing facilities.

Amounts expected to be recorded in fiscal 2026

consist of fixed asset impairment, severance, and moving costs, net of an expected gain upon lease termination.

The amounts of expected

fiscal 2026 non-cash charges and savings are largely dependent on the timing of the completion of the exit and could differ from these

preliminary estimates.

No significant long-lived assets were held outside

the United States at either February 1, 2026 or February 2, 2025.

International customers accounted for less than 2 % of consolidated invoiced

sales in fiscal 2026, 2025, and 2024.

We define international sales as sales outside of the United States and Canada.

NOTE 18 – COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET

Commitments and Off-Balance Sheet Arrangements

We had letters of credit outstanding totaling

$ 3.6 million on February 1, 2026.

We utilize letters of credit to collateralize certain imported inventory purchases and certain insurance

arrangements.

In the ordinary course of our business, we may

become involved in legal proceedings involving contractual and employment relationships, product liability claims, intellectual property

rights and a variety of other matters.

We do not believe that any pending legal proceedings will have a material impact on our financial

position or results of operations.

Our business is subject to a number of significant

risks and uncertainties, including our reliance on offshore sourcing, any of which can adversely affect our business, results of operations,

financial condition or future prospects.

NOTE 19 – CONCENTRATIONS OF RISK

Imported Products Sourcing

We source imported products through multiple vendors,

located in seven countries.

Because of the large number and diverse nature of the foreign factories from which we can source our imported

products, we have some flexibility in the placement of products in any particular factory or country.

Factories located in Vietnam are a critical resource

for Hooker Furnishings.

In fiscal 2026, imported products sourced from Vietnam accounted for 87 % of our import purchases and our top five

suppliers accounted for 69 % of our fiscal 2026 import purchases.

A disruption in our supply chain from Vietnam could significantly impact

our ability to fill customer orders for products manufactured at that factory or in that country.

Raw Materials Sourcing for Domestic Upholstery

Manufacturing

Our five largest domestic upholstery suppliers

accounted for 30 % of our raw materials supply purchases for domestic upholstered furniture manufacturing operations in fiscal 2026.

supplier accounted for 8 % of our raw material purchases in fiscal 2026.

Should disruptions with these suppliers occur, we believe we could

successfully source these products from other suppliers without significant disruption to our operations.

Concentration of Sales and Accounts Receivable

One customer accounted for approximately 9 % of

our consolidated sales in fiscal 2026.

Our top five customers accounted for 26 % of our fiscal 2026 consolidated sales.

The loss of any

one or more of these customers could adversely affect our earnings, financial condition and liquidity.

At February 1, 2026, 23 % of our

consolidated accounts receivable is concentrated in our top five customers.

NOTE 20 - RELATED PARTY TRANSACTIONS

We lease the four properties utilized in Shenandoah’s

One of our employees has an ownership interest in the entities that own these properties.

The leases commenced on September

29, 2017 with an option to renew each for an additional seven years .

All four leases include annual rent escalation clauses with respect

to minimum lease payments after the initial 84-month term of the lease is completed.

In addition to monthly lease payments, we also incur

expenses for property taxes, routine repairs and maintenance and other operating expenses.

The total amount of the lease expenses and

other expenses do not have a material effect on our consolidated financial statements.

NOTE 21 - SUBSEQUENT EVENTS

Cash Dividend

On March 5, 2026 , our Board of Directors declared

a quarterly cash dividend of $ 0.115 per share, payable on March 31, 2026 to shareholders of record at March 16, 2026 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures