UNITED STATES

 SECURITIES AND
EXCHANGE COMMISSION

 Washington, DC 20549

 Form 10-K

 Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

 For the fiscal year ended February 2, 2025

 Commission file number 000-25349

 HOOKER
FURNISHINGS CORPORATION

 (Exact name of registrant as specified in its
charter)

 Virginia

 54-0251350

 (State or other jurisdiction of incorporation or organization)

 (I.R.S. Employer Identification Number)

 440 East
Commonwealth Boulevard, Martinsville, VA 24112

 (Address of principal executive offices, Zip
Code)

 ( 276) 632-2133

 (Registrant's telephone number, including
area code)

 (Former name, if changed since last report)

 Securities registered pursuant to Section 12(b)
of the Act:

 Title of Each Class

 Trading Symbol(s)

 Name of Each Exchange on Which Registered

 Common Stock, no par value

 HOFT

 NASDAQ Global Select Market

 Securities registered pursuant to Section 12(g)
of the Act: None

 Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes No

has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
 No

is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company",
and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated Filer
 Accelerated filer

 Non-accelerated Filer
 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.

has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to §240.10D-1(b).

is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 State the aggregate market value of the voting
and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the
average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second
fiscal quarter: $ 164.7 million.

 Indicate the number of shares outstanding of each
of the registrant's classes of common stock as of April 7, 2025:

 Common stock, no par value

 10,702,685

 (Class of common stock)

 (Number of shares)

 Documents incorporated by reference: Portions
of the registrant's definitive Proxy Statement for its Annual Meeting of Shareholders scheduled to be held June 3, 2025 are incorporated
by reference into Part III.

 Page

 Part
 I

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Information about our Executive Officers

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 Reserved

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accounting Fees and Services

 Item 15.

 Exhibits, Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 Signatures

 Index to Consolidated Financial Statements

 All references to 2025, 2024, 2023, 2022, and 2021 or other years
are referring to our fiscal years, unless otherwise stated. Our fiscal years end on the Sunday closest to January 31, with fiscal 2025
ending on February 2, 2025. Our quarterly periods are based on thirteen-week "reporting periods" (which end on a Sunday) rather
than quarterly periods consisting of three calendar months. As a result, each quarterly period generally is thirteen weeks, or 91 days
long, except as noted below. In some years (generally once every six years) the fourth quarter will be fourteen weeks long and the fiscal
year will consist of fifty-three weeks. The 2025 fiscal year that ended on February 2, 2025 was a 53-week fiscal year.

 All references to the "Company," "we," "us"
and "our" in this document refer to Hooker Furnishings Corporation and its consolidated subsidiaries, unless specifically
referring to segment information. All references to the "Hooker," "Hooker Division(s)," "Hooker Legacy Brands"
or "traditional Hooker" divisions or companies refer to all current business units and brands except for those in the Home
Meridian segment. The Hooker Branded segment includes Hooker Casegoods and Hooker Upholstery. The Domestic Upholstery segment includes
Bradington-Young, HF Custom (formerly Sam Moore), Shenandoah Furniture and Sunset West. All Other includes H Contract and BOBO Intriguing
Objects, a business acquired during fiscal 2024.

 Forward-Looking Statements

 Certain statements made in this report, including statements under
Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in the
notes to the consolidated financial statements included in this report, are not based on historical facts, but are forward-looking statements.
These statements reflect our reasonable judgment with respect to future events and typically can be identified by the use of forward-looking
terminology such as "believes," "expects," "projects," "intends," "plans,"
"may," "will," "should," "would," "could" or "anticipates," or
the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy. Forward-looking statements
are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.
Those risks and uncertainties include but are not limited to:

 (1) general economic or business conditions, both domestically and
internationally, including the current macro-economic uncertainties and challenges to the retail environment for home furnishings along
with instability in the financial and credit markets, in part due to inflation and high interest rates, including their potential impact
on (i) our sales and operating costs and access to financing, (ii) customers, and (iii) suppliers and their ability to obtain financing
or generate the cash necessary to conduct their respective businesses;

 (2) adverse political acts or developments in,
or affecting, the international markets from which we import products and some components used in our Domestic Upholstery segment, including
duties or tariffs imposed on those products by foreign governments or the U.S. government, such as the current ten percent tariff and
potential additional reciprocal tariffs on imports imposed by the current U.S. administration, affecting the countries from which we source
imported home furnishings and components, including the possible adverse effects on our sales, earnings, and liquidity;

 (3) the cyclical nature of the furniture industry, which is particularly
sensitive to changes in consumer confidence, the amount of consumers' income available for discretionary purchases, and the availability
and terms of consumer credit;

 (4) risks associated with the ultimate outcome of our cost reduction
plans, including the amounts and timing of savings realized and the ability to scale the business appropriately as customer demand increases
or decreases based on the macroeconomic environment;

 (5) risks associated with the outcome of the Home Meridian (HMI) segment
restructuring, including whether we can return the segment to consistent profitability;

 (6) risk associated with the planned exit of our Savannah, Georgia
warehouse, including executing the exit in a timely manner, the costs and availability of temporary warehousing, moving and start-up costs,
ERP and technology-related risks, the timing and amounts of related restructuring charges and expected cost savings, as well as possible
related disruptions to sales, earnings, revenue;

 (7) risks associated with our new warehouse facility in Vietnam, including
our ability to execute the planned shift of inventories from domestic facilities to Vietnam without increasing overall inventories and
adversely affecting working capital levels and start-up risks including technology-related risks or disruption in our offshore suppliers
or the transportation and handling industries, including labor stoppages, strikes, or slowdowns, and the ability to timely fulfill customer
orders;

 (8) the risks specifically related to the concentrations
of a material part of our sales and accounts receivable in only a few customers, including the loss of several large customers through
business consolidations, failures or other reasons, or the loss of significant sales programs with major customers;

 (9) risks associated with our reliance on offshore sourcing and the
cost of imported goods, including fluctuation in the prices of purchased finished goods, customs issues, freight costs, including the
price and availability of shipping containers, ocean vessels, domestic trucking, and warehousing costs and the risk that a disruption
in our supply chain or the transportation and handling industries, including labor stoppages, strikes, or slowdowns, could adversely affect
our ability to timely fulfill customer orders;

 (10) the impairment of our long-lived assets,
which can result in reduced earnings and net worth;

 (11) difficulties in forecasting demand for our
imported products and raw materials used in our domestic operations;

 (12) our inability to collect amounts owed to
us or significant delays in collecting such amounts;

 (13) the risks associated with our Amended and Restated Loan Agreement,
including the fact that our asset-based lending facility is secured by substantially all of our assets and contains provisions which limit
the amount of our future borrowings under the facility, as well as financial and negative covenants that, among other things, may limit
our ability to incur additional indebtedness;

 (14) interruption, inadequacy, security breaches
or integration failure of our information systems or information technology infrastructure, related service providers or the internet
or other related issues including unauthorized disclosures of confidential information, hacking or other cybersecurity threats or inadequate
levels of cyber insurance or risks not covered by cyber insurance;

 (15) risks associated with domestic manufacturing
operations, including fluctuations in capacity utilization and the prices and availability of key raw materials, as well as changes in
transportation, warehousing and domestic labor costs, availability of skilled labor, and environmental compliance and remediation costs;

 (16) disruptions and damage (including those due
to weather) affecting our Virginia, North Carolina or Georgia warehouses, our Virginia, North Carolina or California administrative and
manufacturing facilities, our High Point, Las Vegas, and Atlanta showrooms or our representative offices or warehouses in Vietnam and
China;

 (17) changes in U.S. and foreign government regulations
and in the political, social and economic climates of the countries from which we source our products;

 (18) risks associated with product defects, including
higher than expected costs associated with product quality and safety, regulatory compliance costs related to the sale of consumer products
and costs related to defective or non-compliant products, product liability claims and costs to recall defective products and the adverse
effects of negative media coverage;

 (19) the direct and indirect costs and time spent
by our associates related to the implementation of our Enterprise Resource Planning system ("ERP"), including costs resulting
from unanticipated disruptions to our business;

 (20) achieving and managing growth and change,
and the risks associated with new business lines, acquisitions, including the selection of suitable acquisition targets, restructurings,
strategic alliances and international operations;

 (21) risks associated with distribution through
third-party retailers, such as non-binding dealership arrangements;

 (22) the cost and difficulty of marketing and
selling our products in foreign markets, including the risks associated with our new UK sales initiative;

 (23) changes in domestic and international monetary
policies and fluctuations in foreign currency exchange rates affecting the price of our imported products and raw materials;

 (24) price competition in the furniture industry; and

 (25) changes in consumer preferences, including
increased demand for lower-priced furniture;

 Our forward-looking statements could be wrong
in light of these and other risks, uncertainties and assumptions. The future events, developments or results described in this report
could turn out to be materially different. Any forward-looking statement we make speaks only as of the date of that statement, and we
undertake no obligation, except as required by law, to update any forward-looking statements whether as a result of new information, future
events or otherwise and you should not expect us to do so.

 Also, our business is subject to a number of significant
risks and uncertainties, any of which can adversely affect our business, results of operations, financial condition or future prospects.
For a discussion of risks and uncertainties that we face, see the Forward-Looking Statements detailed above and Item 1A, "Risk Factors"
below.

 Investors should also be aware that while we
occasionally communicate with securities analysts and others, it is against our policy to selectively disclose to them any material nonpublic
information or other confidential commercial information. Accordingly, investors should not assume that we agree with any projection,
forecast or report issued by any analyst regardless of the content of the statement or report, as we have a policy against confirming
information issued by others.

 ITEM 1. BUSINESS

 Hooker Furnishings Corporation, incorporated in
Virginia in 1924, is a designer, marketer and importer of casegoods (wooden and metal furniture), leather furniture, fabric-upholstered
furniture, lighting, accessories, and home decor for the residential, hospitality and contract markets. We also domestically manufacture
premium residential custom leather, custom fabric-upholstered furniture and outdoor furniture.

 Reportable Segments

 Furnishings sales account for all of our net sales.
For financial reporting purposes and as described further below, we are organized into three reportable segments, Hooker Branded, Home
Meridian and Domestic Upholstery. Our other businesses are aggregated into "All Other". See Note 18 -Segment Information to
our Consolidated Financial Statements for additional financial information regarding our operating segments.

 Products

 Our product lines cover the design spectrum of
residential furnishings: traditional, contemporary and transitional. Further, our product lines are in the "good", "better"
and "best" product categories, which carry medium and upper price points. Hooker Furnishings Corporation consists of the following
three operating segments and "All Other":

 The Hooker Branded segment which includes two
businesses:

 Hooker Casegoods, which covers a wide range of design categories and includes home entertainment, home
office, accent, dining and bedroom furniture in the upper-medium price points sold under the Hooker Furniture brand; and

 Hooker Upholstery, imported upholstered furniture targeted at the upper-medium
price range.

 The Home Meridian segment which includes the
following brands/marketing units:

 Pulaski Furniture, casegoods covering the complete design spectrum in a wide range of bedroom, dining
room, accent and display cabinets at medium price points;

 Samuel Lawrence Furniture, value-conscious offerings in bedroom, dining room, home office and youth furnishings;

 Samuel Lawrence Hospitality, a designer and supplier of hotel furnishings
targeted toward four-and five-star hotels; and

 Prime Resources International (PRI), value-conscious imported leather motion upholstery.

 The Domestic Upholstery segment which includes
the following operations:

 Bradington-Young, a seating specialist in upscale motion and stationary leather furniture;

 HF Custom (formerly Sam Moore Furniture), a specialist in fashion forward
custom fabric upholstery offering a selection of chairs, sofas, sectionals, recliners and a variety of accent upholstery pieces;

 Shenandoah Furniture, an upscale upholstered furniture business specializing in private label sectionals,
modulars, sofas, chairs, ottomans, benches, beds and dining chairs in the upper-medium price points for lifestyle specialty retailers;
and

 Sunset West, a designer and manufacturer of comfortable, stylish and high-quality outdoor furniture.

 All Other consisting of:

 The H Contract product line which supplies upholstered seating and casegoods to upscale senior living
and assisted living facilities through designers, design firms, industry dealers and distributors that service that market; and

 BOBO Intriguing Objects (BOBO), a lighting, accessories and home d cor source acquired in fiscal
2024 that offers a variety of one-of-a-kind designs.

 Sourcing

 Imported Products

 We have sourced products from foreign manufacturers
for over thirty years, predominantly from Asia. Imported casegoods and upholstered furniture together accounted for approximately 71%,
70%, and 72% of our net sales in fiscal 2025, fiscal 2024, and fiscal 2023, respectively.

 Our imported furniture business is subject to
inherent risks in importing products manufactured abroad, including, but not limited to: supply disruptions and delays due to a variety
of reasons, including our foreign suppliers' factory capacities, factory shutdowns and delays, fluctuations in ocean freight costs,
container and vessel space availability, currency exchange rate fluctuations, economic and political developments and instability, as
well as the laws, policies and actions of foreign governments and the United States. These laws, policies and actions may include regulations
affecting trade or the application of tariffs, such as the current ten percent tariff and the potential additional reciprocal tariffs
on imports imposed by the current U.S. administration, affecting the countries from which we source imported home furnishings and components,
including the possible adverse effects on our sales, earnings, and liquidity.

 Because of the large number and diverse nature
of the foreign suppliers in Vietnam, China, Mexico, India, and Malaysia from which we source our imported products, we have flexibility
in the sourcing of products among any particular supplier or country. However, a disruption in our supply chain from a major supplier
or from Vietnam in general, could significantly compromise our ability to fill customer orders for products manufactured at that factory
or in that country. Supply disruptions and delays on selected items could occur for six months or longer. If we were to be unsuccessful
in obtaining those products from other sources or at a comparable cost, a disruption in our supply chain from a major furniture supplier,
or from Vietnam in general, could decrease our sales, earnings and liquidity.

 Given the sourcing capacity available in Vietnam
and other low-cost producing countries such as China, Mexico, Malaysia, and India, as well as our supply chain diversification efforts,
we believe the risks from these potential supply disruptions are manageable in the long-term. However, our insight into the probability
of a wide scale global or regional disruption or pandemic, like the COVID-19 pandemic, remains limited. See Item 1A, "Risk Factors"
for additional information on our risks related to imported products.

 For imported products, we generally negotiate
firm pricing with foreign suppliers in U.S. Dollars, typically for a term of at least one year. However, under certain circumstances,
we may re-negotiate pricing during the year. We accept the exposure to exchange rate movements during these negotiated periods. We do
not use derivative financial instruments to manage this risk but could choose to do so in the future. Since we transact our imported product
purchases in U.S. Dollars, a relative decline in the value of the U.S. Dollar compared to the currencies from which we obtain our imported
products could increase the price we pay for imported products beyond the negotiated periods. We generally expect to reflect substantially
all of the effects of any price increases from suppliers in the prices we charge for imported products. However, these price changes could
adversely impact sales volume and profit margin during the affected periods, and potential competitive pricing pressures could limit the
company's ability to pass cost increases to vendors or customers. Additionally, we generally do not apply price increases on order
backlog, which could adversely affect our earnings. Conversely, a relative increase in the value of the U.S. Dollar compared to the currencies
from which we obtain our imported products could decrease the cost of imported products and favorably impact net sales and profit margins
during the affected period. However, due to other factors, such as inflationary pressure, we may not fully realize savings when exchange
rates fall. Therefore, lower exchange rates may only have a tempering effect on future price increases by merely delaying cost increases
on imported products. See also Item 7A. "Quantitative and Qualitative Disclosures About Market Risk."

 Raw Materials

 Significant materials used in manufacturing our domestic upholstered
furniture products include leather, fabric, foam, wooden and metal frames and electronic mechanisms. Most of the leather is imported from
Italy and South America and is purchased as full hides and cut and sewn in our facilities or is purchased as pre-cut and sewn kits processed
by our vendors to our pattern specifications. We believe our sources for raw materials are adequate and that we are not overly dependent
on any one supplier. Our five largest domestic upholstery suppliers accounted for 31% of our raw materials purchases for domestic upholstered
furniture manufacturing operations in fiscal 2025. Should disruptions with these suppliers occur, other than macro disruptions affecting
all such suppliers, we believe we could successfully source these products from other suppliers without significant disruption to our
operations. After the implementation of the initial reciprocal tariffs in April 2025, we have observed price increases in imported raw
materials, including fabrics, steel, and hides. Generally, we engage in negotiations with our suppliers to share a portion of the tariff
burden. However, if we are unable to offset the tariff costs on these imported materials, it may lead to increased product costs, potentially
adversely affecting net sales and profit margins.

 Customers

 Our home furnishings products are sold through
a variety of retailers including independent furniture stores, department stores, mass merchants, national chains, catalog merchants,
interior designers, and e-commerce retailers. No single customer accounted for more than 7% of our consolidated sales in fiscal 2025.
Our top five customers accounted for approximately 24% of our fiscal 2025 consolidated sales. The loss of any one or more of these customers
would have a material adverse impact on our business. Less than 2% of our sales in fiscal 2025 were to international customers. We define
sales to international customers as sales to customers outside of the United States and Canada since our independent domestic sales force
services both countries.

 Competition

 The furniture industry is highly competitive and
includes a large number of foreign and domestic manufacturers and importers, none of which dominates the market in our price points. While
the markets in which we compete include a large number of relatively small and medium-sized manufacturers, certain competitors have substantially
greater sales volumes and financial resources than we do. U.S. imports of furniture produced overseas, such as from Vietnam and China,
have stabilized in recent years. The primary competitive factors for home furnishings in our price points include price, style, availability,
service, quality and durability. Competitive factors in the hospitality and contract furniture markets include product value and utility,
lead times, on-time delivery and the ability to respond to requests for special and non-standard products. We believe our design capabilities,
ability to import and/or manufacture upholstered furniture, product value, longstanding customer and supplier relationships, significant
sales, distribution and inventory capabilities, ease of ordering, financial strength, experienced management and customer support are
significant competitive advantages.

 Warehousing and Distribution

 We distribute furniture to retailers directly from factories and warehouses
in Asia via our container direct programs and from our facilities in Virginia, North Carolina, Georgia and California, and in limited
cases, from customer operated warehouses in strategic locations. Due to our exit from the Accentrics Home ("ACH") business
unit which demanded significant amounts of inventory to meet the quick shipping requirements of its e-commerce model, we reduced the physical
footprint of the Georgia warehouse by 400,000 square feet over the course of fiscal 2024. In March 2025, we announced the planned exit
from our Georgia warehouse. The exit strategy involves several risks, including the timely execution of the exit, costs and availability
of temporary warehousing, expenses related to relocation and start-up, and potential challenges with ERP and technology systems. Additional
considerations include the timing and magnitude of restructuring charges, anticipated cost savings, and the potential for disruptions
to sales, earnings, and revenue. See additional information in Management's Discussion and Analysis and Note 22 Subsequent Events
on page 23 and F-33.

 Working Capital Practices

 Inventory

 We generally import casegoods inventory and certain
upholstery items in amounts that enable us to meet the delivery requirements of our customers, our internal in-stock goals and minimum
purchase requirements from our sourcing partners. The majority of products in the Hooker Branded segment are shipped from our U.S. warehouses,
while a large percentage of products sold at our Home Meridian segment are not warehoused by us but ship directly to our customers and
thus are not included in our inventory. Our Domestic Upholstery segment products are made to order and shipped shortly after they are
produced; however, this segment carries significant amounts of raw materials for production. We do not carry significant amounts of hospitality
products, as most of these products are built to order and are shipped shortly after their manufacture directly to the customer.

 Accounts receivable

 Substantially all of our trade accounts receivable
are due from retailers and dealers that sell residential home furnishings or commercial purchasers of our hospitality and senior living
products, which consist of a large number of entities with a broad geographic dispersion. We perform credit evaluations of our customers
and generally do not require collateral. For qualified customers, we offer payment terms, generally requiring payment 30 days from shipment.
However, we may offer extended payment terms in certain circumstances, including to promote sales of our product. We purchase accounts
receivable insurance on certain customers if their risk profile warrants it and the insurance is available. Due to the highly customized
nature of our hospitality products, we typically require a 50% deposit upon order, a 40% deposit before goods reach a U.S. port and the
remaining 10% balance due within 30 days of the receipt of goods by the customer. For our outdoor furnishings, smaller orders require
full prepayment and most larger orders require a 50% deposit upon order and the balance when production is started. Additionally, some
customers request and qualify for payment terms.

 Accounts payable

 Payment for our imported products warehoused first
in Asia is due 10 to 14 days after our quality audit inspections are complete and the vendor invoice is presented. Payment for goods which
are shipped to our U.S. warehouses or container direct to our customers FOB Origin (free on board origin, which means the buyer is responsible
for the costs and liability of the freight during transport) is generally due upon proof of lading onto a U.S.-bound vessel and invoice
presentation; however, payment terms, depending on the supplier, can stretch up to 45 days from invoice date. Payment terms for domestic
raw materials and non-inventory related charges vary but are generally 30 days from invoice date.

 Order Backlog

 At February 2, 2025, our backlog of unshipped
orders was as follows:

 Order Backlog

 (Dollars in 000s)

 *February 2, 2020

 Reporting Segment

 Dollars

 Weeks

 Dollars

 Weeks

 Dollars

 Weeks

 $
 11,984

 4.3

 $
 15,416

 5.1

 $
 10,979

 3.5

 21,002

 8.5

 36,013

 85,556

 13.1

 18,123

 8.4

 18,920

 7.8

 14,705

 1,527

 13.6

 1,475

 12.2

 2,520

 10.5

 $
 52,636

 7.0

 $
 71,824

 8.6

 $
 113,760

 9.7

 In the discussion below and herein, we reference
changes in sales orders or "orders" and sales order backlog (unshipped orders at a point in time) or "backlog"
over and compared to certain periods of time and changes discussed are in sales dollars and not units of inventory, unless stated otherwise.
We believe orders are generally good current indicators of sales momentum and business conditions. If the items ordered are in stock and
the customer has requested immediate delivery, we generally ship products in about seven days or less from receipt of order; however,
orders may be shipped later if they are out of stock or there are production or shipping delays or the customer has requested the order
to be shipped at a later date or has requested that we ship the order "in-full", meaning all products ordered for the end-user
must ship together. It is our policy and industry practice to allow order cancellation for casegoods up to the time of shipment or, in
the case of container direct orders, up until the time the container is booked with the ocean freight carrier; therefore, customer orders
for casegoods are not firm. However, domestically produced upholstered products are predominantly custom-built and consequently, cannot
be cancelled once the leather or fabric has been cut. Additionally, our hospitality products are highly customized and are generally not
cancellable. Similarly, for our outdoor furnishings, most orders require a deposit upon order and the balance before production is started,
and hence are generally not cancellable.

 For the Hooker Branded and Domestic Upholstery
segments and All Other, we generally consider backlogs to be one helpful indicator of sales for the upcoming 30-day period, but because
of our relatively quick delivery and our cancellation policies, we do not consider order backlogs to be a reliable indicator of expected
long-term sales. We generally consider the Home Meridian segment's backlog to be one helpful indicator of that segment's sales
for the upcoming 90-day period. Due to (i) the average sales order sizes of its mass and mega account channels of distribution, (ii) the
proprietary nature of many of its products and (iii) the project nature of its hospitality business, for which average order sizes tend
to be larger and consequently, the Home Meridien segment's order backlog tends to be larger.

 There have been exceptions to the general predictive
nature of our orders and backlogs noted in this paragraph, such as during times of extremely high demand and supply chain challenges as
experienced during the immediate aftermath of the initial COVID-19 crisis and subsequent recovery. Orders were not being converted to
shipments as quickly as would be expected compared to the pre-pandemic environment due to the lack and cost of shipping containers and
vessel space as well as limited overseas vendor capacity. As a result, backlogs were significantly elevated and reached historical levels
at the end of fiscal 2021 and 2022.

 At the end of fiscal 2025, our consolidated order
backlog decreased by $19.2 million as compared to the prior year-end, representing a 27% decrease year-over-year. This decrease was primarily
driven by a $15 million reduction in the Home Meridian backlog and a $3.4 million reduction in the Hooker Branded backlog, both due to
weak demand in the home furnishings market.

 * For comparison purposes, we included order backlog
as of fiscal 2020 year-end, the year before the COVID crisis. At fiscal 2020 year-end, Home Meridian backlog included approximately $18
million orders from the unprofitable Clubs and Accentrics Home e-commerce (ACH) businesses which we decided to exit in fiscal 2022 and
fiscal 2023, respectively. Domestic Upholstery backlog did not include Sunset West, the business we acquired in the beginning of fiscal
2023. At fiscal 2020 year-end, Sunset West had approximately $1.6 million in backlog.

 Seasonality

 Generally, sales in our fiscal first quarter are
lower than our other fiscal quarters due to the post-Lunar New Year shipping lag and sales in our fiscal fourth quarter are generally
stronger due to the pre-Lunar New Year surge in shipments from Asia.

 Environmental Matters

 As a part of our business operations, our manufacturing
sites generate both non-hazardous and hazardous waste; the treatment, storage, transportation and disposal of which are subject to various
local, state and federal laws relating to environmental protection. Our policy is to record monitoring commitments and environmental liabilities
when expenses are probable and can be reasonably estimated. The costs associated with our environmental responsibilities, compliance with
federal, state and local laws regulating the discharge of materials into the environment, or costs otherwise relating to the protection
of the environment, have not had and are not expected to have a material effect on our financial position, results of operations, capital
expenditures or competitive position.

 We are actively working to refine and align our
environmental stewardship based on current best practices, shareholder expectations and regulatory developments through our Environmental,
Social and Governance (ESG) focused employee committee called CARE (Community Action & Responsibility for our Environment). It regularly
updates management and updates the Board at least quarterly on these initiatives. We note the following recent and ongoing activities
and new developments:

 We have put in place several initiatives focused on promoting sustainability and preserving natural resources. We maintain an annual Greenhouse Gas (GHG) emissions inventory and verification. The third-party verification of GHG emissions issued in calendar year 2024 stated that we have established appropriate systems for the collection, aggregation and analysis of quantitative data for determination of these GHG emissions for the stated period and boundaries.

 Since 2021, we have started projects to reduce our carbon footprint
by investment in renewable energy and in projects to reduce energy consumption. We have purchased renewable energy from solar farms for
several domestic manufacturing facilities since 2022. Sunset West is operating on 100% renewable energy; HF Custom (formerly Sam Moore)
is operating on 100% renewable energy; and the Savannah distribution center is operating on 30% renewable energy. All remaining facilities
will be added as renewable energy programs are available in those locations. We are recognized as an Appalachian Power 2024 Top Performer
for energy efficiency in the Martinsville area.

 We continue to partner with the Arbor Day Foundation, the Sustainable Furnishings Council, and the Eco Ambassador Council for their commitment to environmental responsibility and sustainability, including financial assistance, educating employees on the necessity of preserving and replenishing resources, and supporting various projects within the Dan River Basin area. We also support the Virginia Museum of Natural History's Cultural Heritage Monitoring lab, which provides global monitoring capability for cultural heritage sites threatened by armed conflict and natural disaster.

 Human Capital Resources

 As of February 2, 2025, we had 1,034 full-time
employees, of which 233 were employed in our Hooker Branded segment, 173 were employed in our Home Meridian segment, 623 were employed
in our Domestic Upholstery segment and 5 were employed in All Other. By geographical area, 895 employees were located in the United States
and 139 were located in Asia. None of our employees are represented by a labor union. We consider our relations with our employees to
be good.

 Our employees are critical to our success, and
we are committed to attracting, developing, and retaining top talent to drive our business forward. The core values of our Company include
integrity, caring and inclusivity that affirms every individual. Our leadership team is committed to fostering an environment where everyone
is welcomed, respected, listened to and valued for their unique contributions to the organization, and to providing a work environment
that is free from all forms of harassment, discrimination and inequality. We recruit, employ, train, promote and compensate our employees
without regard to race, ethnicity, age, gender, gender identity, religion, national origin, citizenship, marital status, veteran's
status or disability. All facilities have established human resource departments with formal hiring processes and controls in place to
ensure ethical and fair hiring practices. Some of the action steps we have taken recently or are working on currently include:

 We carefully evaluate the overall compensation and benefits packages regularly
to ensure the economic security, health, and safety of our employees, including;

 compensating employees competitively relative to the industry and local labor markets, and in accordance
with all applicable federal, state, and local wage, work hour, overtime, and benefits laws; and

 providing affordable and comprehensive health benefits to employees focused on financial, emotional, and
physical health and well-being, including a standardized process of reporting worker's compensation claims which we believe promotes
the health and safety of our employees.

 We maintain standardized safety procedures and
training at all locations including established safety committees, under the leadership of our Director of Facilities & Safety, which
consist of management and employee representatives, with tasks of identifying and reporting hazards and unsafe work practices, removing
obstacles to accident prevention, and minimizing the risks of accidents, injury and impacts on health. We are committed to implementing
and improving safety measures to achieve a safe, healthy, secure, and productive workplace;

 We are committed to employees' professional success and growth by providing extensive safety training, on-the-job coaching, formal training sessions, and online learning resources. The Company also provides continuing education opportunities, including an independently operated educational foundation originally funded by the Company, comprehensive leadership development programs, and a renewable tuition reimbursement program to children and spouses of all employees, excluding family members of current and former executive officers and board directors;

 We are committed to fostering a culture of opportunity
and respect for all members of our team. We have done this by:

 Expanding Talent Pipelines

 We expanded our Furniture Market Internship, providing aspiring professionals with hands-on experience
and exposure to the furniture industry in areas such as customer service, hospitality, marketing, and sales.

 We established a formal summer internship program aligned with roles of interest for recent graduates.
During the summer of 2024, the program focused on marketing, with three interns contributing to various aspects of the department and
gaining valuable experience.

 We strengthened our partnerships with local HBCUs and participated in the State of North Carolina's
HBCU Internship Program, hosting a supply chain intern to support skill development in key roles.

 Enhancing Employee Training

 We introduced feedback training and conflict management training for people leaders to improve workplace
communication and foster a collaborative environment.

 We developed plans for future training initiatives, including programs focused on mental health awareness,
boundary-spanning skills, and change management to support employee growth, adaptability, and well-being.

 Strengthening Community Partnerships

 We continue to maintain and grow community partnerships in the communities where our employees live and
work. For example, we deepened our collaboration with the Resource Access Network in Lynchburg, which led to receiving the Champions of
Disability Employment Award for our efforts to create meaningful employment opportunities for individuals with disabilities.

 In calendar 2024, we participated in job fairs, workshops, and university events, offering resume reviews,
mock interviews, and insights into careers at Hooker Furnishings to strengthen community ties and support workforce development.

 We
maintain a Code of Business Conduct and Ethics. All employees are required to sign off on the Code at hiring and reaffirm their understanding
and compliance with the Code, as well as anti-corruption and anti-bribery training on an annual basis. In addition, the Company has both
import and domestic suppliers to sign a Vendor Code of Conduct. The Company also has audits in place for both Environmental Social and
Governance (ESG) and the US Customs Trade Partnership Against Terrorism certification (CTPAT) and conducts them every 6 months and produces
a scorecard that can be used in future purchasing decisions based upon the vendor's performance. The CTPAT audit process involves
a comprehensive self-assessment of our supply chain covering facilities, logistics, and personnel, IT, etc., and the implementation of
security best practices, to ensure our entire supply chain is secure. This self-assessment is ultimately audited by US Customs and Border
Protection. Adherence to this program allows for quicker processing of shipments through US Customs. Our ESG audit involves a systematic
evaluation of our performance across the ESG spectrum aiming to identify strengths, weaknesses, opportunities, and risks, and to provide
stakeholders with a comprehensive view of our sustainability efforts and adherence to ESG principles

 Patents and Trademarks

 The Hooker Furnishings, Hooker Furniture, Bradington-Young,
Sam Moore, Pulaski Furniture, Samuel Lawrence Furniture, Samuel Lawrence Hospitality, Home Meridian International, Prime Resources International,
Shenandoah, H Contract, Sunset West, HF Custom and BOBO trade names represent many years of continued business. We believe these
trade names are well-recognized and associated with quality and service in the furnishings industry. We also own a number of patents and
trademarks, both domestically and internationally, none of which is considered to be material.

 Governmental Regulations

 Our company is subject to U.S. federal, state
and local laws and regulations in the areas of safety, health, employment and environmental pollution controls, as well as U.S. and international
trade laws and regulations, including tariffs. We are also subject to foreign laws and regulations. In the past, compliance with these
laws and regulations has not had any material effect on our earnings, capital expenditures or competitive position in excess of those
affecting others in our industry; however, the effect of compliance in the future cannot be predicted. We believe we are in material compliance
with applicable U.S. and international laws and regulations.

 Additional Information

 You may visit us online at hookerfurnishings.com,
hookerfurniture.com, bradington-young.com, hfcustomfurniture.com, shenandoahfurniture.com, mfurnishings.com, sunsetwestusa.com, homemeridian.com,
pulaskifurniture.com, slf-co.com, slh-co.com, hcontractfurniture.com, and bobointriguingobjects.com. We make available, free of charge
through our Hooker Furnishings website hookerfurnishings.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K, amendments to those reports, and other documents as soon as practical after they are filed with or furnished to the
Securities and Exchange Commission ("SEC"). A free copy of our annual report on Form 10-K may also be obtained by contacting
Earl Armstrong, Chief Financial Officer, Senior Vice-President Finance and Corporate Secretary at CorpSec@hookerfurnishings.com or by
calling 276-632-2133.

 ITEM 1A. RISK FACTORS

 Our business is subject to a variety of risks.
The risk factors discussed below should be considered in conjunction with the other information contained in this annual report on Form
10-K. If any of these risks actually materialize, our business, results of operations, financial condition or future prospects could be
negatively impacted. These risks are not the only ones we face. There may be additional risks that are presently unknown to us or that
we currently believe to be immaterial that could affect us.

 Economic downturns could result in decreased
sales, earnings and liquidity.

 The furniture industry is particularly sensitive
to cyclical variations in the general economy and the current macro-economic uncertainties, including the current sustained economic downturn
caused by persistent inflation and higher interest rates, the slow housing market, and after-effects of COVID-19. Home furnishings are
generally considered a discretionary and postponable purchase by most consumers. Economic downturns could affect consumer spending habits
by decreasing the overall demand for home furnishings. Changes in interest rates, consumer confidence, new housing starts, existing home
sales, the availability of consumer credit and broader national or geopolitical factors have particularly significant effects on our business.
We have seen negative effects on all of these measures due to the COVID-19 pandemic and persistent macroeconomic headwinds of the last
few years. A recovery in our sales could lag significantly behind a general recovery in the economy after an economic downturn, due to,
among other things, the nature and relatively significant cost of home furnishings purchases resulting in a temporary shift in consumer
discretionary spending away from home furnishings, or scarcity of transportation and Asian manufacturing capacity during times of increased
demand. Additionally, most of our sales are of wooden or metal Casegoods products, which have a slower replacement cycle than our upholstered
home furnishings products. These factors also impact retailers, who are our primary customers, possibly adversely affecting our sales,
earnings, financial condition and liquidity.

 We rely on offshore sourcing from Vietnam for
most of our sales and source other products internationally as well. Consequently:

 Potential future increases in tariffs or new
tariffs imposed on other countries from which we source, including Vietnam, China, or Mexico, could adversely affect our business.

 There is a potential that the current
U.S. administration will impose additional reciprocal tariffs on nearly all the countries from which we source our product, including
Vietnam and China, which accounted for 76% and 13% of our total imports in fiscal 2025, respectively. Inability to reduce product costs,
pass through price increases or find other suitable manufacturing sources may have a material adverse impact on sales volume, earnings
and liquidity. In addition, the tariffs, and our responses to the tariffs, may cause our products to become less competitive due to price
increases or less profitable due to lower margins. Our inability to effectively manage the negative impacts of changing U.S. and foreign
trade policies could adversely affect our business and financial results.

 Our inability to accurately forecast demand for our imported products could cause us to purchase
 too much, too little or the wrong mix of inventory.

 Manufacturing and delivery lead times
for our imported products necessitate that we make forecasts and assumptions regarding current and future demand for these products. If
our forecasts and assumptions are inaccurate, we may purchase excess or insufficient amounts of inventory. If we purchase too much or
the wrong mix of inventory, we may be forced to sell it at lower margins, which could adversely affect our sales, earnings, financial
condition and liquidity. If we purchase too little or the wrong mix of inventory, we may not be able to fill customer orders and may lose
market share and weaken or damage customer relationships, which also could adversely affect our sales, earnings, financial condition and
liquidity.

 A disruption in supply from Vietnam or from
our most significant suppliers in Asia could adversely affect our ability to timely fill customer orders for these products and decrease
our sales, earnings and liquidity.

 In fiscal 2025, imported products sourced
from Vietnam accounted for 76% of our import purchases and our top five suppliers in Vietnam accounted for 62% of our fiscal 2025 import
purchases. Our supply chain could be adversely impacted by the uncertainties of health concerns such as COVID-19 or similar pandemics
and governmental restrictions. A disruption in our supply chain, or from Vietnam in general, such as the COVID-19 related lockdown in
certain parts of Asia in the Summer of calendar 2021, could significantly impact our ability to fill customer orders for products manufactured
in those countries. In some cases, we believe we would have sufficient inventory on hand and in-transit or be able to provide substitutions
from our domestic warehouses but may not be enough to entirely mitigate the lost sales. Supply disruptions and delays on selected items
could occur for six months or longer before the impact of remedial measures would be reflected in our results. If we are unsuccessful
in obtaining those products from other sources or at comparable cost, a disruption in our supply chain from our largest import furniture
suppliers, or from Vietnam in general, could adversely affect our sales, earnings, financial condition and liquidity.

 Increased transportation costs, including
freight costs on imported products, could decrease earnings and liquidity.

 Transportation costs on our imported
products are affected by a myriad of factors including the global economy, petroleum prices and ocean freight carrier capacity. In the
recent past, especially after the COVID-19 pandemic, transportation costs, including ocean freight costs and domestic trucking costs,
on imported products represented a significant portion of the cost of those products. We saw a significant spike in these costs during
that time and our profitability was materially impacted. To mitigate the increased costs, we implemented price increases and surcharges;
however, there can be no assurance that we will be successful in increasing prices or receiving freight surcharges in the future or that
we can do it quickly enough to offset increased costs. Increased transportation costs, both domestically and internationally, in the future
would likely adversely affect our earnings, financial condition and liquidity.

 Our dependence on suppliers could, over time,
adversely affect our ability to service customers.

 We rely heavily on suppliers we do not
own or control, including a large number of non-U.S. suppliers. All of our suppliers may not provide goods that meet our quality, design
or other specifications in a timely manner and at a competitive price. If our suppliers do not meet our specifications, we may need to
find alternative suppliers, potentially at a higher cost, or may be forced to discontinue products. Also, delivery of goods from non-U.S.
suppliers may be delayed for reasons not typically encountered for domestically manufactured furniture, such as shipment delays caused
by customs issues, labor issues, port-related issues such as weather, congestion or port equipment, decreased availability of shipping
containers and/or the inability to secure space aboard shipping vessels to transport our products. Our failure to timely fill customer
orders due to an extended business interruption for a major supplier, or due to transportation issues, could negatively impact existing
customer relationships and adversely affect our sales, earnings, financial condition and liquidity.

 We are subject to changes in U.S. and foreign
government regulations and in the political, social and economic climates of the countries from which we source our products.

 Changes in political, economic and social
conditions, as well as in the laws and regulations in the foreign countries from which we source our products could adversely affect our
sales, earnings, financial condition and liquidity. These changes could make it more difficult to provide products and service to our
customers or could increase the cost of those products. International trade regulations and policies of the United States and the countries
from which we source finished products could adversely affect us. Imposition of trade sanctions relating to imports, taxes, import duties
and other charges on imports affecting our products could increase our costs and decrease our earnings.

 Changes in the value of the U.S. Dollar compared
to the currencies for the countries from which we obtain our imported products could adversely affect our sales, earnings, financial condition
and liquidity.

 For imported products, we generally
negotiate firm pricing with our foreign suppliers in U.S. Dollars, typically for periods of at least one year. We accept the exposure
to exchange rate movements during these negotiated periods. We do not use derivative financial instruments to manage this risk but could
choose to do so in the future. Since we transact our imported product purchases in U.S. Dollars, a relative decline in the value of the
U.S. Dollar could increase the price we must pay for imported products beyond the negotiated periods. These price changes could decrease
our sales, earnings, financial condition and liquidity during the periods affected.

 Supplier transitions, including cost or quality
issues, could result in longer lead times and shipping delays.

 In the past, inflation concerns, and
to a lesser extent quality and supplier viability concerns, affecting some of our imported product suppliers located in China prompted
us to source more of our products from lower cost suppliers located in other countries, such as Vietnam. Additionally, in the past we
transitioned a significant portion of our imported product purchases from China to Vietnam due to the imposition of tariffs in 2018 on
most furniture and component parts imported from China. As conditions dictate, we could be forced to make similar transitions in the future.
When undertaken, transitions of this type involve significant planning and coordination by and between us and our new suppliers in these
countries. Despite our best efforts and those of our new sourcing partners, these transition efforts are likely to result in longer lead
times and shipping delays over the short term. Risks associated with product defects, including higher than expected costs associated
with product quality and safety, and regulatory compliance costs related to the sale of consumer products and costs related to defective
or non-compliant products, including product liability claims and costs to recall defective products. One or a combination of these issues
could adversely affect our sales, earnings, financial condition and liquidity.

 We may fail to realize the benefits of HMI
segment restructuring and cost-savings efforts.

 During the fourth quarter of fiscal 2023, management
approved a plan to exit the Accentrics Home (ACH) e-commerce brand of the HMI segment along with repositioning the PRI brand as a direct-container
only business model. We recorded a $24.4 million charge in the fiscal 2023 fourth quarter to write-down certain segment inventories to
market and also recorded severance expenses. We also reduced the physical footprints at our Savannah, GA warehouse and High Point, NC
administrative office over the course of the 2024 fiscal year with a concurrent reduction in lease, warehouse, and related expenses. In
March 2025, we announced the planned exit of our Savannah, GA warehouse and the consolidation of warehouse operations at existing and
temporary facilities. We recorded $1.3 million in inventory reserves on end-of-life and near-end of life cycle products that we don't
plan to move to these existing or temporary facilities due to the moving costs involved. We expect to record between $3 million to $4
million in exit charges in the fiscal 2026 first half consisting of a combination of severance and fixed asset impairment. We expect these
actions will return the HMI segment to future profitability assuming demand improves to more normalized levels. However, we may be unable
to realize these cost savings in a timely manner or at all. If these efforts are unsuccessful, in whole or in part, our ongoing business
and financial results may be adversely affected, which could adversely affect our sales, earnings, financial condition and liquidity.

 If demand for our domestically manufactured
upholstered furniture declines, we may respond by realigning manufacturing or implementing cost-saving measures.

 Our domestic manufacturing operations make only
upholstered furniture. A decline in demand for our domestically produced upholstered furniture could result in the realignment of our
domestic manufacturing operations and capabilities and the implementation of cost-saving measures. These programs could include the consolidation
and integration of facilities, functions, systems and procedures. We may decide to source certain products from other suppliers instead
of continuing to manufacture them. These realignments and cost-saving measures typically involve initial upfront costs and could result
in decreases in our near-term earnings before the expected cost savings are realized, if they are realized at all. We may not always accomplish
these actions as quickly as anticipated and may not achieve the expected cost savings, which could adversely affect our sales, earnings,
financial condition and liquidity.

 A disruption affecting our domestic facilities
could disrupt our business.

 The facilities in which we store our inventory
in Virginia, North Carolina, Georgia and California are critical to our success. Our corporate and divisional headquarters, which house
our administration, sourcing, sales, finance, merchandising, customer service and logistics functions for our imported and domestic products
are located in Virginia, North Carolina and California. Additionally, our primary showrooms are located in North Carolina.

 Our domestic upholstery manufacturing facilities
are located in Virginia, North Carolina and California. Furniture manufacturing creates large amounts of highly flammable wood dust and
may utilize other highly flammable materials such as foam, varnishes and solvents in its manufacturing processes and is therefore subject
to the risk of losses arising from explosions and fires. Additionally, our domestic operations could be negatively affected by natural
disasters such as hurricanes and floods, and public health events, such as the COVID-19 pandemic. Any disruption affecting our domestic
facilities, even for a relatively short period of time, could adversely affect our ability to ship our furniture products and disrupt
our business, which could adversely affect our sales, earnings, financial condition and liquidity.

 Fluctuations in the price (including tariffs),
availability or quality of raw materials for our domestically manufactured upholstered furniture could cause manufacturing delays, adversely
affect our ability to provide goods to our customers or increase our costs.

 We use various types of wood, leather, fabric,
foam and other filling material, high-carbon spring steel, bar and wire stock and other raw materials in manufacturing upholstered furniture.
We depend on outside suppliers for raw materials and must obtain sufficient quantities of quality raw materials from these suppliers at
acceptable prices and in a timely manner. We do not have long-term supply contracts with our suppliers. Unfavorable fluctuations in the
price (including those due to the potential implementation of additional reciprocal tariffs), quality or availability of required raw
materials could negatively affect our ability to meet the demands of our customers. We may not always be able to pass price increases
on raw materials through to our customers due to competition and other market pressures. In addition, the price increases are frequently
implemented on future orders instead of existing order backlogs. Considering our lead times during periods of high demand, the benefits
of new pricing could be offset by continued price increases from our suppliers, which could impact us before we realize the benefit from
our price increases. The inability to meet customers' demands or recover higher costs could adversely affect our sales, earnings,
financial condition and liquidity.

 The implementation of our ERP system could
disrupt our business.

 We implemented a common ERP system across all
Hooker Legacy divisions in 2022 and 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. The risk in pausing this effort is that HMI's current version of
SAP will no longer be supported after December 2025. We expect to mitigate this risk by engaging a third party who supports end-of-life
SAP instances. Although we currently expect the ERP implementation to increase efficiencies by leveraging a common, cloud-based system
throughout all divisions and standardizing processes and reporting, our ERP system implementation may not result in improvements that
outweigh its costs and may disrupt our operations. Our inability to mitigate existing and future disruptions could adversely affect our
sales, earnings, financial condition and liquidity. When the ERP system went live at Sunset West and legacy Hooker divisions, the conversion
process significantly impacted shipping activities and negatively impacted sales and profitability in the respective periods, due to longer
than expected post-implementation stabilization. The ERP system implementation subjects us to substantial costs and inherent risks associated
with migrating from our legacy systems. These costs and risks could include, but are not limited to:

 Significant capital and operating expenditures;

 Disruptions to our domestic and international supply chains;

 Inability to fill customer orders accurately and on a timely basis, or at
all;

 Inability to process payments to suppliers, vendors and associates accurately
and in a timely manner;

 Disruption to our system of internal controls;

 Inability to fulfill our SEC or other governmental reporting requirements
in a timely or accurate manner;

 Inability to fulfill international, federal, state or local tax filing requirements
in a timely or accurate manner; and

 Increased demands on management and staff time to the detriment of other
corporate initiatives.

 We may not be able to maintain, raise prices, or raise prices in
a timely manner in response to inflation and increasing costs.

 Competitive and market forces could prohibit or
delay future successful price increases for our products in order to offset increased costs of labor, finished goods, raw materials, freight
and other product-related costs on a timely basis, which could adversely affect our sales, earnings, financial condition and liquidity.

 We may experience impairment of our long-lived
assets, which would decrease our earnings and net worth.

 At February 2, 2025, we had $65.3 million in net
long-lived assets, consisting primarily of property, plant and equipment, trademarks, trade names and goodwill. Our goodwill, some trademarks
and tradenames 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 definite-lived
assets consist of property, plant and equipment and certain intangible assets related to our recent acquisitions and are tested for impairment
whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. The outcome of impairment testing
could result in the write-down of all or a portion of the value of these assets. A write-down of our assets would, in turn, reduce our
earnings and net worth.

 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, increased freight costs, 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 discounted cash flow 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. See Note 10 to our Consolidated Financial Statements for additional information.

 Our sales and operating results could be adversely
affected by product safety concerns.

 If our product offerings do not meet applicable
safety standards or consumers' expectations regarding safety, we could experience decreased sales, increased costs and/or be exposed to
legal and reputational risk. Events that give rise to actual, potential or perceived product safety concerns could expose us to regulatory
enforcement action and/or private litigation. While we carry general and umbrella liability insurance for such events, settlements or
jury awards could exceed our policy limits. Reputational damage caused by real or perceived product safety concerns or failure to prevail
in private litigation against us could adversely affect our business, sales, earnings, financial condition and liquidity.

 A material part of our sales and accounts receivable
are concentrated in a few customers. The loss of several large customers through business consolidations or otherwise, the loss of a major
customer or significant sales programs with major customers, failures or other reasons, including economic downturn and the adverse economic
effects of a future pandemic or similar events, could adversely affect our business.

 One customer accounted for approximately 6% of
our consolidated sales in fiscal 2025, and our top five customers accounted for about 24% of our fiscal 2025 consolidated sales. Approximately
36% of our consolidated accounts receivable is concentrated in our top five customers. Should any one of these receivables become uncollectible,
it would have an immediate and material adverse impact on our financial condition and liquidity. The loss of any one or more of these
customers could adversely affect our sales, earnings, financial condition and liquidity. The loss of several of our major customers through
business consolidations, the loss of major product placements, failures or otherwise, could adversely affect our sales, earnings, financial
condition and liquidity and the resulting loss in sales may be difficult or impossible to replace. Amounts owed to us by a customer whose
business fails, or is failing, may become uncollectible (in whole or in part), and we could lose future sales, any of which could adversely
affect our sales, earnings, financial condition and liquidity. In fiscal 2025, we recorded $3.1 million in bad debt expense due to a large
customer's bankruptcy.

 We may not be able to collect amounts owed
to us.

 We grant payment terms to most customers ranging
from 30 to 60 days and do not generally require collateral. However, in some instances we provide longer payment terms. We purchase credit
insurance on certain customers' receivables and factor certain other customer accounts. Some of our customers have experienced,
and may in the future experience, credit-related issues. Were an economic downturn, pandemic or another major, unexpected event with negative
economic effects occur, we may not be able to collect amounts owed to us or such payment may only occur after significant delay. While
we perform credit evaluations of our customers, those evaluations may not prevent uncollectible trade accounts receivable. Credit evaluations
involve significant management diligence and judgment, especially in the current environment. We may be unable to obtain sufficient credit
insurance on certain customers' receivable balances. Should more customers than we anticipate experience liquidity issues, if payment
is not received on a timely basis, or if a customer declares bankruptcy or closes stores, we may have difficulty collecting amounts owed
to us by these customers, which could adversely affect our sales, earnings, financial condition and liquidity.

 Our existing and future debt obligations could impair our liquidity
and financial condition.

 Our Amended and Restated Loan Agreement, consisting
of an asset-based lending facility of up to $70 million from Bank of America, is secured by substantially all of our assets
and contains provisions that limit the amount of our future borrowings under that facility. Moreover, the terms of our Amended and Restated
Loan Agreement also include financial and negative covenants that, among other things, may limit our ability to incur additional indebtedness.
If we violate any loan covenants and do not obtain a waiver from our lender, our indebtedness under this arrangement would become immediately
due and payable, and the lender could foreclose on its security, which could materially adversely affect our business and future financial
condition and could require us to curtail or otherwise cease our existing operations.

 Labor shortages and rising labor costs could
disrupt operations at our domestic warehousing and manufacturing facilities.

 At times, especially during the post COVID-19
demand surge, we have experienced difficulties in recruiting skilled labor into our domestic upholstery plants and warehouses and in some
skilled or professional positions. Lack of qualified workers and high turnover in a variety of positions caused increased training costs
and adversely affected our production schedules and our ability to ship our furniture products. Furthermore, we experienced higher labor
costs and persistent inflationary pressure. Should these issues re-occur or increase due to future pandemics or for other reasons, our
sales, earnings, financial condition and liquidity could again be adversely affected.

 We may engage in acquisitions and investments
in companies, form strategic alliances and pursue new business lines. These activities could disrupt our business, divert management attention
from our current business, pose integration concerns or difficulties, dilute our earnings per share, decrease the value of our common
stock and decrease our earnings and liquidity.

 Growth by acquisition is highly dependent upon
finding attractive targets and there can be no assurance those targets will be found. We may acquire or invest in businesses such as those
that offer complementary products or that we believe offer competitive advantages. However, we may fail to identify significant liabilities
or risks that could negatively affect us or result in our paying more for the acquired company or assets than they are worth. We may also
have difficulty assimilating and integrating the operations and personnel of an acquired business into our current operations. Acquisitions
or strategic alliances may disrupt or distract management from our ongoing business. We may pay for future acquisitions using cash, stock,
the assumption of debt or a combination of these. Future acquisitions could result in dilution to existing shareholders and to earnings
per share and decrease the value of our common stock. We may pursue new business lines in which we have limited or no prior experience
or expertise. These pursuits may require substantial investment of capital, personnel and management attention. New business initiatives
may fail outright or fail to produce an adequate return, which could adversely affect our earnings, financial condition and liquidity.

 We may lose market share due to furniture retailers
by-passing us and sourcing directly from non-U.S. furnishings sources.

 Some large furniture retailers are sourcing directly
from non-U.S. furniture factories. Over time, this practice may expand to smaller retailers. As a result, we are continually subject to
the risk of losing market share to these non-U.S. furnishings sources, which could adversely affect our sales, earnings, financial condition
and liquidity.

 Failure to anticipate or timely respond to changes in fashion and
consumer tastes could adversely impact our business.

 Furniture is a styled product and is subject to
rapidly changing fashion trends and consumer tastes, as well as to increasingly shorter product life cycles. If we fail to anticipate
or promptly respond to these changes, we may lose market share or be faced with the decision of whether to sell excess inventory at reduced
prices. This could adversely affect our sales, earnings, financial condition and liquidity.

 Our results of operations for any quarter are not necessarily indicative
of our results of operations for a full year.

 Home furnishings sales fluctuate from quarter
to quarter due to factors such as changes in economic and competitive conditions, seasonality, weather conditions, availability of raw
materials and finished inventory and changes in consumer order patterns. From time to time, we have experienced, and may continue to experience,
volatility with respect to availability of and demand for our home furnishing products. Accordingly, our results of operations for any
quarter are not necessarily indicative of the results of operations to be expected for a full year or the next quarter.

 The interruption, inadequacy or security failure
of our information systems or information technology infrastructure or the internet or inadequate levels of cyber insurance could adversely
impact our business, sales, earnings, financial condition and liquidity.

 Our information systems (software) and information
technology (hardware) infrastructure platforms and those of third parties who provide these services to us, including internet service
providers and third parties who store data for us on their servers ("the cloud"), facilitate and support every facet of our
business, including the sourcing of raw materials and finished goods, planning, manufacturing, warehousing, customer service, shipping,
accounting, payroll and human resources. Our systems, and those of third parties who provide services to us, are vulnerable to disruption
or damage caused by a variety of factors including, but not limited to: power disruptions or outages; natural disasters or other so-called
"Acts of God"; computer system or network failures; viruses or malware; physical or electronic break-ins; the theft of computers,
tablets and smart phones utilized by our employees or contractors; unauthorized access, phishing and cyber-attacks. The risk of cyberattacks
also includes attempted breaches of contractors, business partners, vendors and other third parties. We have a cybersecurity program designed
to protect and preserve the integrity of our information systems. Additionally, we implemented a multi-factor authentication process in
order to enhance the security of our remote work environment. We have experienced and expect to continue to experience actual or attempted
cyberattacks of our information systems or networks; however, none of these actual or attempted cyberattacks had a material impact on
our operations or financial condition. Additionally, while we carry cyber insurance, including insurance for social engineering fraud,
the amounts of insurance we carry may be inadequate due either to inadequate limits available from the insurance markets or inadequate
coverage purchased. Because cyberthreat scenarios are inherently difficult to predict and can take many forms, cyber insurance may not
cover certain risks. Further, legislative or regulatory action in these areas is evolving, and we may be unable to adapt our information
systems or to manage the information systems of third parties to accommodate these changes. If these information systems or technologies
are interrupted or fail, or we are unable to adapt our systems or those of third parties as a result of legislative or regulatory actions,
our operations and reputation may be adversely affected, we may be subject to legal proceedings, including regulatory investigations and
actions, which could diminish investor and customer confidence which could adversely affect our sales, earnings, financial condition and
liquidity.

 Unauthorized disclosure of confidential information
provided to us by our customers, employees, or third parties could harm our business.

 We rely on the internet and other electronic methods
to transmit confidential information, and we store confidential information on our networks. If there was a disclosure of confidential
information by our employees or contractors, including accidental loss, inadvertent disclosure or unapproved dissemination of information,
or if a third party were to gain access to the confidential information we possess, our reputation could be harmed, and we could be subject
to civil or criminal liability and regulatory actions. A claim that is brought against us, successful or unsuccessful, that is uninsured,
or under-insured could harm our business, result in substantial costs, divert management attention and adversely affect our sales, earnings,
financial condition and liquidity.

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C. CYBERSECURITY

 Risk Management and Strategy

 The Company's cybersecurity risk management program
is integrated into the overall risk management framework, including risk identification, assessment, and mitigation across all business
areas. We have collaborated with third-party consultants and built a cybersecurity program designed to protect and safeguard the integrity
of our information systems, which aligns with industry standards and regulatory requirements. Key components of our cybersecurity risk
management and strategy include:

 Risk assessments, including vulnerability scans
and penetration testing to identify potential system weaknesses. These are performed internally and supported by third-party consultants;

 Alignment of our cybersecurity framework with
industry standards;

 Employee training and awareness: all employees
receive mandatory regular cybersecurity training, with additional specialized sessions for high-risk roles. We also conduct simulated
phishing exercises to enhance awareness and preparedness;

 Continuous monitoring and threat detection: our
IT security team uses advanced tools for real-time network and system monitoring, enabling rapid detection and response to potential threats;

 Comprehensive cyber insurance coverage, including
protection against social engineering fraud and other cyber incidents, to further mitigate potential financial losses.

 We have previously experienced actual or attempted
cyber-attacks on our information systems or networks; however, none of these incidents had a material impact on our operations or financial
condition. For additional information on the impact of cyber risks, refer to Part I, Item 1A. Risk Factors on page 12.

 Governance

 The board of directors oversees the Company's
practice for assessing, identifying and managing material risks from cybersecurity threats. The Audit Committee, consisting of all of
the board's independent directors, with one member holding the CERT Certificate in Cybersecurity Oversight, reviews and discusses
with management and the independent auditor on the Company's significant financial risk exposures for matters related to cybersecurity
risk, including the steps management has taken to monitor and manage such exposures.

 The Company's VP of enterprise systems and
applications leads the overall cybersecurity strategy and risk management program. This role oversees development and execution of risk
assessments, implementation of security policies and procedures, regular cybersecurity training for our employees, and leadership of the
IT security team and coordination with third-party consultants.

 Senior executives, including the Company's
 CEO and CFO, integrate cybersecurity risks into the overall business strategy and financial planning. The VP and IT security team provide
regular reports to senior management on the Company's identified vulnerabilities, progress on cybersecurity initiatives and remediation
efforts, and details of ongoing incidents. Management notifies the board of directors when significant incidents occur and provides the
Audit Committee with quarterly updates on the Company's cybersecurity practices.

 ITEM 2. PROPERTIES

 Set forth below is information with respect to
our principal properties on April 18, 2025. In March 2025, we announced the decision to exit the warehouse in Midway, Georgia. We expect
to complete the exit in the second half of fiscal 2026; however, the timing of the completion of the exit could differ from preliminary
estimate. We believe all of these properties are well-maintained and in good condition. During fiscal 2025, we estimate our upholstery
plants operated at approximately 60% of capacity on a one-shift basis. All our production facilities are equipped with automatic sprinkler
systems. All facilities maintain modern fire and spark detection systems, which we believe are adequate. We have leased certain warehouse
facilities for our distribution and import operations, typically on a short or medium-term basis. We expect that we will be able to renew
or extend these leases or find alternative facilities to meet our warehousing and distribution needs at a reasonable cost. All facilities
set forth below are active and operational, representing in the aggregate approximately 3.3 million square feet of owned space, leased
space or properties utilized under third-party operating agreements.

 Location

 Segment Use

 Primary Use

 Approximate Size

in Square Feet

 Owned or Leased

 Martinsville, VA

 All segments

 Corporate Headquarters, Distribution, Manufacturing and Warehousing

 1,489,766

 Owned / Leased

 High Point, N.C.

 All segments

 Office and Showrooms

 243,588

 Atlanta, GA

 DU

 Showroom

 55,508

 Savannah, GA

 HM, DU

 Warehouse

 590,240

 Bedford, VA

 DU

 Manufacturing and Offices

 327,000

 Owned

 Hickory, N.C.

 DU

 Manufacturing and Offices

 166,000

 Owned

 Mt. Airy, N.C.

 DU

 Manufacturing and warehousing

 104,150

 Valdese, N.C.

 DU

 Manufacturing and warehousing

 102,905

 Cherryville, N.C.

 DU

 Manufacturing Supply Plant

 53,000

 Owned

 Vista, CA

 DU

 Manufacturing, Warehousing, and Offices

 52,813

 Las Vegas, NV

 HB, DU, AO

 Showrooms

 9,717

 Ho Chi Minh City, VN

 HB, HM

 Office, Warehouse and Distribution

 106,157

 Dongguan, China

 HB, HM

 Office

 HB=Hooker
Branded, HM=Home Meridian, DU=Domestic Upholstery, AO=All Other

 ITEM 3. LEGAL PROCEEDINGS

 None.

 ITEM 4. MINE SAFETY DISCLOSURES

 None.

 INFORMATION ABOUT OUR EXECUTIVE OFFICERS

 Hooker Furnishings' executive officers and
their ages as of April 18, 2025 and the calendar year each joined the Company are as follows:

 Name

 Age

 Position

 Year Joined

Company

 Jeremy R. Hoff

 Chief Executive Officer and Director

 2017

 C. Earl Armstrong III

 Chief
 Financial Officer and Senior Vice President - Finance

 2009

 Anne J. Smith

 Chief Administration Officer and President - Domestic Upholstery

 2008

 Jeremy R. Hoff has been Chief Executive
Officer and Director since February 2021. Mr. Hoff served as President of Hooker Legacy Brands from February 2020 to January 2021, President
of the Hooker Branded segment from April 2018 to January 2020. Mr. Hoff joined the Company in August of 2017 as President of Hooker Upholstery.
Prior to that, Mr. Hoff served as President of Theodore Alexander USA from December 2015 to August 2017.

 C. Earl Armstrong III became the Company's
Chief Financial Officer, effective February 3, 2025, and in such role, he serves as the Company's principal financial officer and
principal accounting officer. Mr. Armstrong has served as Senior Vice President - Finance & Corporate Secretary since April 2024.
Mr. Armstrong joined Hooker in 2009 as the Company's Manager of Financial Reporting through January 2013. He served as Director
of Accounting from January 2013 to January 2016, Corporate Controller from February 2017 to June 2019 and Corporate Controller and Secretary
from June 2019 through April 2024. In February 2021 through the end of January 2025, he also served as Chief Financial Officer of the
Company's Home Meridian segment.

 Anne J. Smith has been Chief Administration
Officer and President – Domestic Upholstery since February 2021. Ms. Smith served as Chief Administration Officer from July 2018
to January 2021, Senior Vice President – Administration from January 2014 to June 2018, Vice President- HR and Administration from
January 2011 to January 2014 and Vice President-Human Resources from November 2008 to January 2011. Ms. Smith joined the Company in January
of 2008 as Director of Human Resources.

 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Our stock is traded on the NASDAQ Global Select
Market under the symbol "HOFT". As of February 2, 2025, we had approximately 6,500 beneficial shareholders. As we have done
in the past, we currently expect that future regular quarterly dividends will be declared and paid in the months of March, June, September
and December. Although we presently intend to continue to declare regular cash dividends on a quarterly basis for the foreseeable future,
the determination as to the payment and the amount of any future dividends will be made by the Board of Directors on a quarterly basis
and will depend on our then-current financial condition, capital requirements, results of operations and any other factors then deemed
relevant by the Board of Directors.

 Performance Graph (1)

 The following graph compares cumulative total shareholder return for
the Company with a broad performance indicator, the Russell 2000 Index (2), and a published industry index, the Household
Furniture Index (3), for the period from February 2, 2020 to February 2, 2025.

 (1)

 The graph shows the cumulative total return on $100 invested at the beginning of the measurement period in our common stock or the specified index, including reinvestment of dividends.

 (2)

 The Russell 2000 Index, prepared by Frank Russell Company, measures the performance of the 2,000 smallest companies out of the 3,000 largest U.S. companies based on total market capitalization and includes the Company.

 (3)

 Household Furniture Index as prepared by Zacks Investment Research, Inc. consists of companies under Standard Industrial Classification (SIC) Codes 2510 and 2511, which includes home furnishings companies that are publicly traded in the United States or Canada. At February 2, 2025, Zacks Investment Research, Inc. reported that these two SIC Codes consisted of Bassett Furniture Industries, Inc., Compass Diversified Holdings, Dorel Industries, Ethan Allen Interiors, Inc., Flexsteel Industries, Inc., Hooker Furnishings Corporation, Horrison Resources Inc., IDP Holdings (USA) Corp., La-Z-Boy, Inc., Leggett & Platt, Inc., Luvu Brands, Inc., MasterBrand, Inc., Natuzzi Spa, Nova Lifestyle, Inc., Purple Innovation Inc., The Rowe Companies, Sleep Number Corp. and Tempur Sealy International, Inc.

 ITEM 6. [RESERVED]

 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

 As you read Management's Discussion and Analysis,
please refer to the consolidated financial statements, including the related notes, contained elsewhere in this annual report. We especially
encourage you to familiarize yourself with:

 All of our recent public filings made with the
SEC which are available, without charge, at www.sec.gov and at

 The forward-looking statements disclaimer contained prior to Item 1 of this report, which describes the significant risks and uncertainties that could cause actual results to differ materially from those forward-looking statements made in this report, including those contained in this section of our annual report on Form 10-K;

 The company-specific risks found in Item 1A.
"Risk Factors" of this report. This section contains critical information regarding significant risks and uncertainties that
we face. If any of these risks materialize, our business, financial condition and future prospects could be adversely impacted; and

 Our commitments and contractual obligations and off-balance sheet arrangements described on page 30 and in Note 17 to our Consolidated Financial Statements on page F-29 of this report. This note describes commitments, contractual obligations and off-balance sheet arrangements, some of which are not reflected in our consolidated financial statements.

 In Management's Discussion and Analysis,
we analyze and explain the annual changes in some specific line items in the consolidated financial statements for fiscal 2025 compared
to fiscal 2024. We also provide information regarding the performance of each of our operating segments and All Other. The analysis and
discussions of fiscal 2024 compared to fiscal 2023 results are in our 2024 Form-10K available through Hooker Furnishings and SEC websites.

 Unless otherwise indicated, references to the
"Company," "we," "our" or "us" refer to Hooker Furnishings Corporation and its consolidated
subsidiaries, unless specifically referring to segment information. All references to the "Hooker," "Hooker Division,"
"Hooker Legacy Brands" or "traditional Hooker" divisions or companies refer to the current components of our Hooker
Branded segment, the Domestic Upholstery segment including Bradington-Young, HF Custom, Shenandoah Furniture and Sunset West, and All
Other which includes H Contract, and BOBO.

 Furnishings sales account for all of our net sales.
For financial reporting purposes, we are organized into three reportable segments- Hooker Branded, Home Meridian and Domestic Upholstery,
with our other businesses included in All Other. We regularly monitor our reportable segments for changes in facts and circumstances to
determine whether changes in the identification or aggregation of operating segments are necessary. See Note 16 to our consolidated financial
statements for additional financial information regarding our segments.

 Executive Summary- Fiscal 2025 Results of Operations

 Fiscal 2025 consolidated net sales totaled $397.5
million, reflecting a decrease of $35.8 million, or 8.3%, compared to the previous fiscal year. All three reportable segments experienced
sales decreases, driven by weak demand, a depressed housing market, and broader macroeconomic uncertainties impacting the broader home
furnishings industry. The Company reported a consolidated operating loss of $18.1 million, primarily due to lower sales volumes, $4.9
million in restructuring costs related to its cost reduction plan, $3.1 million in bad debt expense from a major customer's bankruptcy,
and $2.8 million in a non-cash tradename impairment. Consolidated net loss amounted to $12.5 million, or $1.19 per diluted share.

 Despite the operating loss, the Company achieved significant
milestones in fiscal 2025. These included the Margaritaville licensing agreement, the launch of Hooker Branded's new merchandising
strategy, Sunset West's east coast expansion, key inventory investments, and market share gains amid a tough market. Additionally,
the Company secured a new credit agreement, ensuring sufficient financial resources to sustain operations and pursue growth initiatives.

 Our fiscal 2025 performance is discussed in greater
detail below under "Results of Operations".

 Results of Operations

 The following table sets forth the percentage
relationship to net sales of certain items for the annual periods included in the consolidated statements of operations:

 2025

 2024

 Net sales

 %

 %

 Cost of sales

 77.7

 74.9

 Gross profit

 22.3

 25.1

 Selling and administrative expenses

 25.2

 21.4

 Trade name impairment charges

 0.7

 -

 Intangible asset amortization

 0.9

 0.8

 Operating (loss) / income

 (4.6
)

 2.9

 Other income, net

 0.7

 0.4

 Interest expense, net

 0.3

 0.4

 (Loss) / income before income taxes

 (4.1
)

 2.9

 Income tax (benefit) / expense

 (1.0
)

 0.6

 (3.1
)

 2.3

 Fiscal 2025 Compared to Fiscal 2024

 $
 146,470

 36.9
 %

 $
 156,590

 36.2
 %

 $
 (10,120
)

 -6.5
 %

 130,816

 32.9
 %

 143,538

 33.1
 %

 (12,722
)

 -8.9
 %

 114,216

 28.7
 %

 126,827

 29.3
 %

 (12,611
)

 -9.9
 %

 5,963

 1.5
 %

 6,271

 1.4
 %

 (308
)

 -4.9
 %

 $
 397,465

 %

 $
 433,226

 %

 $
 (35,761
)

 -8.3
 %

 Unit Volume and Average Selling Price ("ASP")

 Unit Volume

 FY25 % Increase / (Decrease)

 vs. FY24

 Average Selling Price

 FY25 % Increase / (Decrease)

 vs. FY24

 2.9
 %

 -5.7
 %

 -29.9
 %

 24.4
 %

 -8.0
 %

 -1.4
 %

 -32.8
 %

 -28.6
 %

 -21.8
 %

 16.1
 %

 Because we report on a fiscal year that ends on
the Sunday closest to January 31 st of each year, the 2025 fiscal year was one week longer than the comparable 2024 fiscal year.
The following table presents average net sales per shipping day in thousands for the 2025 and 2024 fiscal years:

 Average Net Sales Per Shipping Day

 2025

2024

 $

Change

 %

Change

 $

 $

 $
 (51
)

 -8.3
 %

 (61
)

 -10.6
 %

 (59
)

 -11.7
 %

 (2
)

 -6.8
 %

 $
 1,547

 $
 1,719

 $
 (173
)

 -10.0
 %

 Shipping Days

 Consolidated net sales decreased year-over-year
due to the ongoing soft market conditions affecting all segments.

 Hooker Branded segment's net sales decreased
by $10.1 million, or 6.5%, compared to the prior fiscal year. This decrease was primarily driven by a 5.7% decrease in ASP, which was
partially offset by a 2.9% increase in unit volume. Net sales decreased during the first three quarters but recovered with a 10% increase
in the fourth quarter, partially due to one additional week, though this recovery was not enough to reverse the annual decrease. The lower
ASP resulted from price reductions implemented to align with decreased freight costs compared to the historic high in the prior two years.
In addition, discounts increased by 140 bps compared to the prior year due to the effort to rebalance our inventory mix and levels. While
unit volume increased by 2.9% for the year, driven by a 14% surge in the fourth quarter, this increase was insufficient to fully offset
the impact of the lower ASP.

 Home Meridian segment's net sales decreased
by $12.7 million, or 8.9%, compared to the prior fiscal year, primarily due to a 29.9% decrease in unit volume. The absence of sales from
previously exited unprofitable product lines accounted for $11.5 million, representing 78% of the total unit volume decrease. Traditional
channels, including mass merchants, independent furniture stores, and major furniture chains, all experienced sales decreases due to challenges
in the home furnishings industry driven by the sustained industry downturn attributed to macroeconomic headwinds. The loss of a major
customer due to its bankruptcy accounted for approximately 22% of the sales decrease in these channels. These channel decreases were partially
offset by a 58% increase in hospitality sales, driven by double-digit growth in both unit volume and ASP, as a result of the continued
growth in the hospitality industry. The segment's ASP increased by 24.4%, as discounts decreased by 1,190 bps due to the absence
of liquidation sales from the previously exited businesses.

 Domestic Upholstery's net sales decreased by $12.6 million, or 9.9%, compared to the prior year. This decrease was driven by sales decreases at Bradington Young, Shenandoah, and HF Custom, partially offset by a 6.8% sales increase at Sunset West. Sunset West's sales growth was driven by its expansion on the East Coast, which helped support a 15.6% increase in orders for the year. In addition, Sunset West also benefited from the stabilization of its ERP system. While the ASP remained relatively stable across all four divisions, unit volume decreased at Bradington Young, HF Custom and Shenandoah, but increased by 9.6% at Sunset West.

 Gross Profit and Margin

 % Segment

 % Segment

 $
 45,187

 30.9
 %

 $
 58,387

 37.3
 %

 $
 (13,200
)

 -22.6
 %

 25,386

 19.4
 %

 24,367

 17.0
 %

 1,019

 4.2
 %

 18,289

 16.0
 %

 24,048

 19.0
 %

 (5,759
)

 -23.9
 %

 (214
)

 -3.6
 %

 1,890

 30.1
 %

 (2,104
)

 -111.3
 %

 $
 88,648

 22.3
 %

 $
 108,692

 25.1
 %

 $
 (20,044
)

 -18.4
 %

 Consolidated gross profit and margin decreased,
primarily due to decreases in the Hooker Branded and Domestic Upholstery segments, as well as approximately $1.2 million inventory write-downs
and restructuring costs at All Other related to the consolidation of the BOBO business. However, this decrease was partially offset by
improved gross profit and margin at Home Meridian.

 The Hooker Branded segment's gross profit
decreased by $13.2 million compared to the previous fiscal year, primarily due to a $10.1 million decrease in net sales. Additionally,
the cost of goods sold (COGS) increased by $3.1 million, or 570 bps, largely because the prior year's COGS were unusually low, benefiting
from the combination of higher selling prices and lower ocean freight costs. This made the year-over-year comparison more significant.
To a lesser extent, reduced profit on discounted sales also contributed to the decrease in gross margin. While warehousing and distribution
expenses remained unchanged in absolute terms, they increased by 70 bps due to the decrease in net sales.

 The Home Meridian segment's gross profit
increased by $1.0 million, and its gross margin improved by 240 bps, despite a decrease in net sales. This progress reflected years of
restructuring efforts aimed at achieving sustainable profitability in this segment. The improvement was primarily driven by a $3.0 million
reduction in warehousing and distribution expenses, including $2.3 million in cost savings at the Georgia warehouse driven by a reduction
in footprint and $800,000 from international operations, increasing gross margin by 180 bps. Additionally, COGS decreased by 60 bps, supported
by strong performance in the hospitality business. However, this was partially offset by lower margins in traditional channels and $618,000
in inventory write-downs related to the planned exit of the Georgia warehouse.

 Domestic Upholstery segment gross profit decreased
by $5.8 million, primarily due to lower net sales, while its gross margin decreased by 300 bps, due to the under-absorption of overhead
caused by reduced net sales and higher warehousing and distribution expenses. Weak demand for home furnishings led to decreased incoming
orders and reduced production schedules at Bradington Young, HF Custom and Shenandoah to align with backlog levels. As a result, direct
labor costs decreased in absolute terms but remained flat as a percentage of net sales. Indirect costs also decreased in absolute terms,
driven by lower headcount and other cost-saving measures, but increased by 120 bps due to the sales decrease. Direct material costs fluctuated
across divisions but remained steady for the segment. Warehousing and distribution expenses increased by 160 bps primarily driven by higher
rent expenses related to the redeploying of a portion of the Georgia warehouse to support Sunset West's East Coast expansion.

 Selling and Administrative Expenses ("S&A")

 % Segment

 % Segment

 $
 46,149

 31.5
 %

 $
 40,829

 26.1
 %

 $
 5,320

 13.0
 %

 29,593

 22.6
 %

 28,575

 19.9
 %

 1,018

 3.6
 %

 21,287

 18.6
 %

 20,582

 16.2
 %

 3.4
 %

 3,186

 53.4
 %

 2,692

 42.9
 %

 18.4
 %

 $
 100,215

 25.2
 %

 $
 92,678

 21.4
 %

 $
 7,537

 8.1
 %

 Consolidated S&A expenses increased by $7.5
million or 380 bps compared to the previous year due to increases in all three segments and All Other. Consolidated S&A expenses increased
as a percentage of net sales also due to a decrease in net sales.

 Hooker Branded segment's S&A expenses increased by $5.3 million, or 540 bps, compared to the previous year. This increase was driven by several key factors: approximately $1.4 million in severance costs associated with the Company's cost reduction plan; additionally, this segment assumes a significant portion of the Company's S&A expenses, which include compensation for corporate staff and executives, professional service fees such as consulting and compliance costs, and IT-related expenses. These costs totaled approximately $17 million for the current year, an increase of $1.6 million over the prior year, primarily due to wage inflation, investment in talent, IT maintenance, and investments to support strategic growth, including international expansion. Other factors contributing to the increase included higher bad debt provision, travel expenses, and banking fees. These increases were partially offset by lower variable compensation expense due to the Company not meeting its profit targets, as well as decreased rent and other expenses resulting from cost saving measures.

 Home Meridian segment's S&A expenses
increased by $1.0 million, or 270 bps, compared to the previous year. This increase was primarily due to a $3.1 million bad debt expense
resulting from the bankruptcy of a major customer. Additionally, the segment incurred $233,000 in severance costs related to the company's
cost reduction plan. However, these increases were partially offset by several factors: a $1.2 million decrease in compensation expenses
due to organizational restructuring and personnel changes, a $400,000 reduction in selling costs due to lower sales, a $300,000 decrease
in insurance costs due to reduced inventory levels, and savings from other cost reduction initiatives.

 Domestic Upholstery segment's S&A expenses
increased by $705,000, or 240 bps, compared to the previous year. This increase included approximately $640,000 in severance costs, as
well as higher compliance costs and showroom rent expenses. These increases were partially offset by reductions in variable compensation
expense, medical claims, and selling costs.

 All Other's S&A expenses increased
by $494,000 compared to the previous year, primarily due to approximately $850,000 in restructuring costs associated with the consolidation
of the BOBO business.

 Intangible Asset Impairment and Amortization

 Tradenames impairment

 $
 2,831

 0.7
 %

 $
 -

 0.0
 %

 $
 (2,831
)

 -100
 %

 Intangible asset amortization

 3,687

 0.9
 %

 3,656

 0.8
 %

 0.8
 %

 Intangible asset amortization expense stayed flat
in fiscal 2025. The $2.8 million non-cash impairment charge was related to certain indefinite-lived trade names in the Home Meridian segment.
See Note 10 Intangible Assets and Goodwill to our Consolidated Financial Statements for additional information about the impairment charges
and our amortizable intangible assets.

 Operating (Loss) / Income and Margin

 %Segment

 %Segment

 $
 (962
)

 -0.7
 %

 $
 17,560

 11.2
 %

 $
 (18,522
)

 -105.5
 %

 (8,349
)

 -6.4
 %

 (5,530
)

 -3.9
 %

 (2,819
)

 -51.0
 %

 (5,374
)

 -4.7
 %

 1,131

 0.9
 %

 (6,505
)

 -575.2
 %

 (3,400
)

 -57.0
 %

 (803
)

 -12.8
 %

 (2,597
)

 -323.4
 %

 $
 (18,085
)

 -4.6
 %

 $
 12,358

 2.9
 %

 $
 (30,443
)

 -246.3
 %

 The Company reported an operating loss of $18.1
million in fiscal 2025 due to decreased sales volume, $4.9 million in restructuring costs, $3.1 million in bad debt, and $2.8 million
in intangible asset impairment, as well as other factors discussed above.

 Interest Expense, net

 Consolidated interest expense

 $

 1,274

 0.3

 %

 $

 1,573

 0.4

 %

 $

 (300

)

 -19.1

 %

 Consolidated interest expense decreased slightly
in fiscal 2025 due to decreased principal balance, as well as reduced interest rates in the second half of the year.

 Income Taxes

 Consolidated income tax (benefit) / expense

 $
 (3,919
)

 -1.0
 %

 $
 2,573

 0.6
 %

 $
 (6,492
)

 -252.3
 %

 Effective Tax Rate

 23.9
 %

 20.7
 %

 We recorded income tax benefit of $3.9 million for
fiscal 2025, compared to income tax expense of $2.6 million for fiscal 2024. The effective tax rates for fiscal 2025 and fiscal 2024 were
23.9% and 20.7%, respectively. The effective tax rate was higher in fiscal 2025 due to the impact of state tax benefits and the cash surrender
value of company-owned life insurance which were added to the favorable tax impact of the pretax loss, versus a subtraction from tax expense
in the case of a pretax profit in the previous year. See Note 17 Income Taxes to our Consolidated Financial Statements for additional
information about our income taxes.

 Net (Loss) / Income and (Loss) / Earnings Per
Share

 $
 (12,507
)

 -3.1
 %

 $
 9,865

 2.3
 %

 $
 (22,372
)

 -226.8
 %

 Diluted (loss) / earnings per share

 $
 (1.19
)

 $
 0.91

 The analysis and discussion of fiscal 2024 compared to fiscal 2023
results are available in Item 7 of our 2024 Annual Report on Form-10K available through Hooker Furnishings and SEC websites.

 Financial Condition, Liquidity and Capital Resources

 Summary Cash Flow Information – Operating,
Investing and Financing Activities

 2025

 2024

 2023

 Net cash (used in) / provided by operating activities

 $
 (23,016
)

 $
 55,471

 $
 (21,718
)

 Net cash used in investing activities

 (2,699
)

 (8,558
)

 (29,965
)

 Net cash (used in) / provided by financing activities

 (11,149
)

 (22,756
)

 1,319

 Net (decrease) / increase in cash and cash equivalents

 $
 (36,864
)

 $
 24,157

 $
 (50,364
)

 During fiscal 2025, we used cash on hand and $936,000
life insurance proceeds to fund $9.9 million in cash dividends to shareholders, $8.9 million increase in inventory levels, $3.2 million
capital expenditures, $3.0 million toward the development of the ERP system, $480,000 debt issuance cost and $395,000 in life insurance
premiums on Company-owned life insurance policies. Company-owned life insurance policies are in place to compensate us for the loss of
key employees and to facilitate business continuity.

 During fiscal 2024, we used a portion of the $55.5
million cash generated from operations and $1.0 million life insurance proceeds to fund $11.7 million share repurchases, $9.7 million
in cash dividends to our shareholders, $6.8 million capital expenditures including investments in our new showrooms, $5.1 million for
development of our cloud-based ERP system, $2.4 million on the BOBO acquisition, and $406,000 in life insurance premiums on Company-owned
life insurance policies.

 During fiscal 2023, we used a portion of the $25
million term-loan proceeds and existing cash and cash equivalents on hand to fund the $25 million Sunset Acquisition, pay $13.3 million
in purchases and retirement of common stock, build up inventory levels by $12 million, $9.6 million in cash dividends, $5.4 million for
the development of our new cloud-based ERP system, $4.2 million capital expenditures to enhance our business systems and facilities, and
$492,000 in life insurance premiums on Company-owned life insurance policies.

 Liquidity, Financial Resources and Capital
Expenditures

 Our sources of liquidity are:

 available cash and cash equivalents, which are
highly dependent on incoming order rates and our operating performance;

 expected cash flow from operations;

 available lines of credit; and

 cash surrender value of Company-owned life-insurance.

 The most significant components of our working
capital are inventory, accounts receivable and cash and cash equivalents reduced by accounts payable and accrued expenses.

 Our most significant ongoing short-term cash requirements
relate primarily to funding operations (including expenditures for inventory, lease payments and payroll), quarterly dividend payments
and capital expenditures related primarily to showroom renovations and upgrading systems, buildings and equipment. The timing of our working
capital needs can vary greatly depending on demand for and availability of raw materials and imported finished goods but is generally
the greatest in the mid-summer as a result of inventory build-up for the traditional fall selling season. Long-term cash requirements
relate primarily to repayment of long-term debt and funding lease payments.

 Loan Agreements and Revolving Credit Facility

 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 provides
for a revolving credit facility in a committed principal amount of up to $70,000,000 (the "Revolving Commitment"), including
subline of $8,000,000 for letters of credit, and an option to increase the Revolving Commitment by up to $30,000,000 upon meeting certain
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.

 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%. 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
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.

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

 Share Repurchase Authorization

 In fiscal 2023, our Board of Directors authorized
the repurchase of up to $20 million of the Company's common shares. The authorization did not obligate us to acquire a specific
number of shares during any period and did not have an expiration date, but it could be modified, suspended, or discontinued at any time
at the discretion of our Board of Directors. Repurchases could be made from time to time in the open market, or through privately negotiated
transactions or otherwise, in compliance with applicable laws, rules and regulations, and subject to our cash requirements for other purposes,
compliance with the covenants under the loan agreement for our revolving credit facility and other factors we deem relevant. In fiscal
2024 second quarter, our Board of Directors approved an additional $5 million for the repurchase of our common shares, adding to the $20
million authorization it approved in fiscal 2023.

 During fiscal 2024, we had used approximately
$11.7 million of the authorization to purchase 620,634 of our common shares at an average price of $18.79 per share. The share repurchase
program was completed during the fiscal 2024 third quarter.

 Capital Expenditures

 We expect to spend between $2 million to $3 million
in capital expenditures in fiscal 2026 to maintain and enhance our operating systems and facilities.

 Enterprise Resource Planning

 During calendar 2021, our Board of Directors approved
an upgrade to our current ERP system and implementation efforts began shortly thereafter. The ERP system went live at Sunset West in December
2022 and in the legacy Hooker divisions in early September 2023. Due to our cost reduction initiatives, we have temporarily paused the
ERP project in the Home Meridian segment.

 Material Capital Commitments

 Our material capital commitments primarily consist
of lease payments.

 We lease office space, warehousing facilities,
showroom space and office equipment under leases expiring over the next five years. As of February 2, 2025, future minimum annual commitments
under leases and operating agreements are $10.0 million in fiscal 2026, $10.1 million in fiscal 2027, $8.4 million in fiscal 2028, $7.7
million in fiscal 2029, and $7.3 million in fiscal 2030. In March 2025, we announced the decision to exit the Savannah, Georgia distribution
center. This will reduce lease payments and our future commitments by approximately $10 million over the next five years, with a total
of $14.5 million over the remaining lease term. See Note 22 Subsequent Events for additional information.

 Additionally, the Revolving Commitment will terminate,
and all outstanding amounts thereunder will be due and payable, on December 5, 2029.

 Dividends

 We declared and paid dividends of $0.92 per share
or approximately $9.9 million in fiscal 2025, an increase of 3.4% or $0.03 per share compared to $0.89 per share or approximately $9.7
million in fiscal 2024.

 On March 5, 2025, our Board of Directors declared
a quarterly cash dividend of $0.23 per share, payable on March 31, 2025 to shareholders of record at March 17, 2025.

 Our Board of Directors will continue to evaluate
the appropriateness of the current dividend rate considering our performance and economic conditions in future quarters.

 Recently Issued Accounting Pronouncements

 See the Recently Adopted Accounting Standards
section of Note 1 to our Consolidated Financial Statements for further details of recent accounting pronouncements.

 Savannah warehouse exit

 On March 24, 2025, we announced our decision to exit
its Savannah, Georgia distribution center and consolidate operations in the existing facilities. The Company commenced operations at the
Savannah facility in October 2021 for its Home Meridian segment's ("HMI") Accentrics Home ("ACH") brand.
However, shortly after opening the facility, ACH's competitive position was severely eroded by a sharp rise in post-COVID container
freight rates from Asia. In 2024, we liquidated its inventory and closed ACH, part of a larger plan to exit unprofitable businesses at
HMI. We began reducing our footprint in Savannah shortly after that through a series of sub-leases and lease amendments with our landlord,
continued to utilize remaining space for other brands in our Home Meridian segment and for the Sunset West division of our Domestic Upholstery
segment. We recorded net charges of between $1.3 million in fiscal 2025 and expect to record between $3.0 million to $4.0 million in fiscal
2026, related to the Savannah exit. We further expect preliminary savings of between $750,000-$1.0 million in net operating expenses in
fiscal 2026. Also preliminarily, we expect to realize annualized savings of between $4.0 million to $5.7 million beginning in fiscal 2027.
These costs and benefits are largely dependent on the timing of the completion of the exit and could differ from these preliminary estimates.

 Outlook

 There is currently significant economic uncertainty
and volatility. We are evaluating a range of strategies to mitigate the current economic environment, including a 50-year low in existing
home sales, and the possible impact of additional reciprocal tariffs on our operations and profitability. Tariffs add tremendous complexity
and uncertainty that require us to look at our cost structure more aggressively, particularly on the lower margin, direct container side
of our business. We continue to identify additional opportunities to gain efficiency by consolidating operations. While evaluation of
our cost footprint and implementation of further cuts are both ongoing, we continue to invest in the highest growth-potential areas of
our business, as growing profitable sales remains an intense focus.

 On the positive side, the inflation cooled in
February and March, falling to the levels experienced last summer and fall before it rose from November 2024 to January 2025. Additionally,
according to the U.S. Census Bureau year-over-year monthly furniture sales have increased for 5 straight months, beginning in September
2024.

 However, the Index of Consumer Sentiment and existing home sales continue
to be low, which reflects the uncertainty.

 While the current environment is challenging,
we believe we have positioned the company to continue gaining market share and maximizing revenues through our merchandising efforts,
speed-to-market initiatives and in-stock position on top-selling products.

 Critical Accounting Policies and Estimates

 The methods, estimates and judgments we use in
applying our most critical accounting policies have a significant impact on the results we report in our consolidated financial statements.
Critical accounting estimates are those that involve a significant level of estimation uncertainty and have had or are reasonably likely
to have a material impact on our financial condition and results of operations. Specific areas requiring the application of management's
estimates and judgments include, among others, revenue recognition, inventory valuation, assumptions pertaining to valuation of goodwill
and intangible assets and useful lives of long-lived assets. Accordingly, a different financial presentation could result depending on
the judgments, estimates or assumptions that are used. However, we do not believe that actual results will deviate materially from our
estimates related to our accounting policies described below but because application of these accounting policies involves the exercise
of judgment and the use of assumptions as to future uncertainties, actual results could differ materially from these estimates. Therefore,
we consider an understanding of the variability and judgment required in making these estimates and assumptions to be critical in fully
understanding and evaluating our reported financial results.

 Revenue Recognition

 We recognize revenue pursuant to Accounting Standards Codification
606, which requires revenue to be recognized at an amount that reflects the consideration we expect to be entitled to receive in exchange
for transferring goods or services to our customers. Our policy is to record revenue when control of the goods transfers to the customer.
We have a present right to payment at the time of shipment as customers are invoiced at that time. We believe the customer obtains control
of goods at the time of shipment, which is typically when title passes. While the customer may not enjoy immediate physical possession
of the products, the customer's right to re-direct shipment indicates control. In the very limited instances when products are sold
under consignment arrangements, we do not recognize revenue until control over such products has transferred to the end consumer. Orders
are generally non-cancellable once loaded into a shipping trailer or container.

 The transaction price for each contract is the
stated price of the product, reduced by any stated discounts or allowances at that point in time. We do not engage in sales of products
that attach a future material right which could result in a separate performance obligation for the purchase of goods in the future at
a material discount. The implicit contract with the customer, as reflected in the order acknowledgement and invoice, states the final
terms of the sale, including the description, quantity, and price of each product purchased. The transaction price reflects the amount
of estimated consideration to which we expect to be entitled. This amount of variable consideration included in the transaction price,
and measurement of net sales, is included in net sales only to the extent that it is probable that there will be no significant reversal
in a future period.

 Net sales are comprised of gross revenues from
sales of home furnishings and hospitality furniture products and are recorded net of allowances for trade promotions, estimated product
returns, rebate advertising programs and other discounts. Physical product returns are very rare due to the high probability of damages
to our products in return transit. Other revenues, primarily royalties, are immaterial to our overall results. Payment is typically due
within 30-60 days of shipment for customers qualifying for payment terms. Collectability is reasonably assured since we extend credit
to customers for whom we have performed credit evaluations and/or from whom we have received a down payment or deposit. Due to the highly-customized
nature of our hospitality products, we typically require substantial prepayments on these orders, with the balance due within 30 days
of delivery.

 Impairment of Long-Lived Assets

 Tangible and Definite Lived Intangible Assets

 We regularly review our property, plant and equipment and definite-lived
intangible assets for indicators of impairment, as specified in the Accounting Standards Codification.

 When an indicator of impairment is present, the
impairment test for our property, plant and equipment requires us to assess the recoverability of the value of the assets by comparing
their net carrying value to the sum of undiscounted estimated future cash flows directly associated with and arising from use and eventual
disposition of the assets. We principally use our internal forecasts to estimate the undiscounted future cash flows used in our impairment
analyses. These forecasts are subjective and are largely based on management's judgment, primarily due to the changing industry
in which we compete, changing consumer tastes, trends and demographics and the current economic environment. We monitor changes in these
factors as part of the quarter-end review of these assets. While our forecasts have been reasonably accurate in the past, during periods
of economic instability, uncertainty, or rapid change within our industry, we may not be able to accurately forecast future cash flows
from our long-lived assets and our future cash flows may be diminished. Therefore, our estimates and assumptions related to the viability
of our long-lived assets may change and are reasonably likely to change in future periods. These changes could adversely affect our consolidated
statements of operations and consolidated balance sheets.

 When we conclude that any of these assets are
impaired, the asset is written down to its fair value. Any impaired assets that we expect to dispose of by sale are measured at the lower
of their carrying amount or fair value, less estimated cost to sell; are no longer depreciated; and are reported separately as "assets
held for sale" in the consolidated balance sheets, if we expect to dispose of the assets in one year or less.

 Intangible Assets and Goodwill

 Our goodwill, trademarks and trade names are tested
for impairment annually as of the first day of our fourth quarter or more frequently if events or changes in circumstances indicate that
the asset might be impaired.

 The fair value of our trademarks and trade names is determined based
on the estimated earnings and cash flow capacity of those assets. The impairment test consists of a comparison of the fair value of the
indefinite-lived intangible assets with their carrying amount. If the carrying amount of the indefinite-lived intangible assets exceeds
their fair value, an impairment loss is recognized in an amount equal to that excess. During fiscal 2025, due to the decline in revenue
driven by the downturn in the furniture industry, increased freight costs, 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 discounted cash flow 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, based on our internal valuation, the fair values of
our Bradington-Young, remaining Home Meridian and BOBO non-amortizable trademarks and trade names exceeded their carrying values.

 Upon the adoption of ASU 2017-04, 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. Based on our internal goodwill impairment analysis
as described above, we have concluded that Shenandoah and Sunset West goodwill in the Domestic Upholstery segment and BOBO goodwill in
All Other is not impaired as of February 2, 2025.

 The assumptions used to determine the fair value
of our intangible assets are highly subjective and judgmental and include long-term growth rates, sales volumes, projected revenues, assumed
royalty rates and factors used to develop an applied discount rate. If the assumptions that we use in these calculations differ from actual
results, we may realize impairment on our intangible assets that may have a material-adverse effect on our results of operations and financial
condition.

 Inventory

 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 review inventories on hand and record an allowance
for slow-moving and obsolete inventory based on historic experience, current sales trends and market conditions, expected sales and other
factors. When we identify inventory that is unlikely to be sold or that has a cost basis in excess of its net realizable value, we record
a write-down to reduce the carrying amount of inventory to its estimated net realizable value. In March 2025, we announced the planned
exit of our Savannah, GA warehouse and the consolidation of warehouse operations at existing and temporary facilities. In fiscal 2025,
we recorded $1.3 million in inventory reserves on end-of-life and near-end of life cycle products that we don't plan to move to
these existing or temporary facilities due to the moving costs involved.

 Our other significant accounting policies are
described in Note 1 – Summary of Significant Accounting Policies to our Consolidated Financial Statements beginning at page F-10
in this report.

 Recently Issued Accounting Standards Not Yet
Adopted

 In December 2023, the FASB issued 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. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 (our fiscal
2026). We are currently evaluating the impact that the adoption of this new guidance will have on our Consolidated Financial Statements,
if any, and will add necessary disclosures upon adoption.

 Concentrations of Sourcing Risk

 In fiscal 2025, imported products sourced from
Vietnam accounted for 76% of our import purchases and our top five suppliers in Vietnam accounted for 62% of our fiscal 2025 import purchases.
A disruption in our supply chain, or from Vietnam in general, could significantly impact our ability to fill customer orders for products
manufactured in those countries. Our supply chain could be adversely impacted by the uncertainties of health concerns and governmental
restrictions. In some cases, we may be able to provide substitutions using inventory on hand, in-transit and from our domestic warehouses,
but not enough to entirely mitigate the lost sales. Supply disruptions and delays on selected items could occur for six months or longer
before the impact of remedial measures would be reflected in our results. If we are unsuccessful in obtaining those products from other
sources or at comparable cost, a disruption in our supply chain from our largest import furniture suppliers, or from Vietnam in general,
could adversely affect our sales, earnings, financial condition and liquidity.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

 We are exposed to various types of market risk
in the normal course of our business, including the impact of interest rate changes, raw materials price risk and changes in foreign currency
exchange rates, which could impact our results of operations or financial condition. We manage our exposure to this risk through our normal
operating activities.

 Interest Rate Risk

 Borrowings 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. As such, these debt instruments expose us to market risk for
changes in interest rates. As of February 2, 2025, we had $22.1 million principal amount of outstanding loans. At current borrowing levels,
a 1% increase in the SOFR rate would result in an annual increase in interest expenses of approximately $221,000. There were no additional
borrowings outstanding under the Amended and Restated Loan Agreement as of February 2, 2025.

 Raw Materials Price Risk

 We are exposed to market risk from changes in
the cost of raw materials used in our domestic upholstery manufacturing processes; principally, wood, fabric and foam products. Increases
in home construction activity could result in increases in wood and fabric costs. Additionally, the cost of petroleum-based foam products
we utilize are sensitive to crude oil prices, which vary due to supply, demand and geo-political factors.

 Currency Risk

 For imported products, we generally negotiate
firm pricing denominated in U.S. Dollars with our foreign suppliers, typically for periods of at least one year. We accept the exposure
to exchange rate movements beyond these negotiated periods. We do not use derivative financial instruments to manage this risk but could
choose to do so in the future. Most of our imports are purchased from suppliers located in Vietnam.

 Since we transact our imported product purchases
in U.S. Dollars, a relative decline in the value of the U.S. Dollar could increase the price we pay for imported products beyond the negotiated
periods. We generally expect to reflect substantially all of the effect of any price increases from suppliers in the prices we charge
for imported products. However, these changes could adversely impact sales volume or profit margins during affected periods.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA

 Our consolidated
financial statements listed in Item 15(a), and which begin on page 37, of this report are incorporated herein by reference and are filed
as a part of this report.

 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM 9A. CONTROLS AND PROCEDURES

 Evaluation of Disclosure Controls and Procedures

 Our management, with the participation of our
principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as
of the end of the fiscal year ended February 2, 2025. Based on this evaluation, our principal executive officer and our principal financial
officer concluded that our disclosure controls and procedures were effective as of February 2, 2025, the end of the period covered by
this annual report, to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under
the Securities Exchange Act of 1934, as amended, is accumulated and communicated to the Company's management, including our principal
executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure and are effective
to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms.

 Management's Report on Internal Control
over Financial Reporting

 In accordance with Section 404 of the Sarbanes-Oxley
Act and SEC rules thereunder, management has conducted an assessment of our internal control over financial reporting as of February 2,
2025, based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission. Management's report regarding that assessment is included on page F-2 of this report, with our consolidated
financial statements, and is incorporated herein by reference.

 Report of Registered Public Accounting Firm

 Our independent registered public accounting firm,
KPMG LLP, audited the consolidated financial statements included in this annual report on Form 10-K and has issued an audit report on
the effectiveness of our internal control over financial reporting. KPMG's report is included on page F-3 and F-4 of this report,
with our consolidated financial statements, and is incorporated herein by reference.

 Changes in Internal Control over Financial
Reporting

 There were no other changes in the Company's
internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected,
or are reasonably likely to materially affect, the Company's internal control over financial reporting.

 ITEM 9B. OTHER INFORMATION

 During the fourth quarter of fiscal 2025, no director or officer of
the Company adopted, terminated or modified a ' Rule 10b5-1 trading arrangement ' or ' non-Rule 10b5-1 trading arrangement,'
as each term is defined in Item 408(a) of Regulation S-K.

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 Not Applicable.

 In accordance with General Instruction G(3) of
Form 10-K, most of the information called for by Items 10, 11, 12, 13 and 14 of Part III will be incorporated by reference to the Company's
definitive Proxy Statement for its Annual Meeting of Shareholders scheduled to be held June 3, 2025 (the "2025 Proxy Statement"),
as set forth below.

 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 Information relating to our directors will be
set forth under the caption "Proposal One-Election of Directors" in the 2025 Proxy Statement and is incorporated herein by
reference.

 Information relating to our executive officers
is included in Part I of this report under the caption "Information about our Executive Officers" and is incorporated herein
by reference.

 Information relating to compliance with Section
16(a) of the Exchange Act will be set forth under the caption "Delinquent Section 16(a) Reports" in the 2025 Proxy Statement
and is incorporated herein by reference.

 Information relating to the code of ethics that
applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing
similar functions will be set forth under the caption "Code of Business Conduct and Ethics" in the 2025 Proxy Statement and
is incorporated herein by reference.

 Information relating to insider trading policy
that applies to our directors, principal executive officers and employees will be set forth under the caption "Insider Trading Policy"
in the 2025 Proxy Statement and is incorporated herein by reference.

 Information relating to material changes, if any,
in the procedures by which shareholders may recommend nominees for our Board of Directors will be set forth under the caption "Procedures
for Shareholder Recommendations of Director Nominees" in the 2025 Proxy Statement and is incorporated herein by reference.

 Information relating to the Audit Committee of
our Board of Directors, including the composition of the Audit Committee and the Board's determinations concerning whether certain
members of the Audit Committee are "financial experts" as that term is defined under Item 407(d)(5) of Regulation S-K will
be set forth under the captions "Corporate Governance" and "Audit Committee" in the 2025 Proxy Statement and is
incorporated herein by reference.

 ITEM 11. EXECUTIVE COMPENSATION

 Information relating to this item will be set
forth under the captions "Report of the Compensation Committee," "Compensation Discussion and Analysis (CD&A) Executive
Compensation" including the executive compensation tables and disclosures following the CD&A and "Director Compensation"
in the 2025 Proxy Statement and is incorporated herein by reference.

 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

 Information relating to this item will be set
forth under the captions "Equity Compensation Plan Information" and "Security Ownership of Certain Beneficial Owners
and Management" in the 2025 Proxy Statement and is incorporated herein by reference.

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 Information relating to this item will be set
forth in the last two paragraphs under the caption "Audit Committee" and the caption "Corporate Governance" in
the 2025 Proxy Statement and is incorporated herein by reference.

 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 Information relating to this item will be set
forth under the caption "Proposal Three - Ratification of Selection of Independent Registered Public Accounting Firm" in the
2025 Proxy Statement and is incorporated herein by reference.

 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 (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

 (2)
 Financial Statement Schedules:

 Financial Statement Schedules have been
omitted because the information required has been separately disclosed in the consolidated financial statements or related notes.

 (b)
 Exhibits:

 3.1

 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. 000-25349) filed on September 8, 2023)

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

 4.2
 Amended and Restated Bylaws of the Company (See Exhibit 3.2)

 4.3
 Description of the Company's Securities Registered Pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended (incorporated by reference to Exhibit 4.3 of the Company's Annual Report on Form 10-K (SEC File No. 000-25349)
for the year ended February 2, 2020).

 Pursuant to Regulation
S-K, Item 601(b)(4)(iii), instruments, if any, evidencing long-term debt not exceeding 10% of the Company's total assets have been
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
Company's Current Report on Form 8-K (SEC File No. 000-25349) filed on January 17, 2006)*

 10.1(c)
 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. 000-25349))*

 10.1(d)
 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. 000-25349) for the quarter ended
October 31, 2010)*

 10.1(e)
 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
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
R. Hoff (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 26, 2025).*

 10.1(l)
 Employment Agreement, dated February 20, 2025, by and between Hooker Furnishings Corporation and C. Earl
Armstrong, III (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K (SEC File No. 000-25349) filed
on February 26, 2025).*

 10.1(m)
 Employment Agreement, dated February 20, 2025, by and between Hooker Furnishings Corporation and Anne
J. Smith (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K (SEC File No. 000-25349) filed on
February 26, 2025).*

 10.2
 Amended and Restated Loan and Security Agreement, dated as of December 5, 2024, between Bank of America,
N.A. and Hooker Furnishings Corporation, Bradington-Young, LLC, Sam Moore Furniture LLC and Home Meridian Group, LLC (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 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. 000-25349) filed on February 1, 2022)

 19.1
 Hooker Furniture Corporation Insider trading policy (filed herewith)

 List of Subsidiaries:

 Bradington-Young LLC,
a North Carolina limited liability company

 Home Meridian Group,
LLC, a Virginia limited liability company

 Sam Moore Furniture
LLC, a Virginia limited liability company

 Consent of Independent Registered Public Accounting Firm (filed herewith)

 31.1
 Rule 13a-14(a) Certification of the Company's principal executive officer (filed herewith)

 31.2
 Rule 13a-14(a) Certification of the Company's principal financial officer (filed herewith)

 32.1
 Rule 13a-14(b) Certification of the Company's principal executive officer and principal financial
officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

 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 12, 2024)

 The following financial statements from the Company's Annual Report on Form 10-K for the fiscal year ended
(ii) consolidated statements of operations, (iii) consolidated statements of comprehensive (loss)/income, (iv) consolidated statements
of cash flows, (v) consolidated statements of shareholders' equity and (vi) the notes to the consolidated financial statements,
tagged as blocks of text (filed herewith)

 *
 Management contract or compensatory plan

 ITEM 16. FORM 10-K SUMMARY

 None.

 SIGNATURES

 Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

 /s/ Jeremy R. Hoff

 Jeremy R. Hoff

 Chief Executive Officer and Director

 (Principal Executive Officer)

 Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/ Jeremy R. Hoff

 Chief Executive Officer and

 Jeremy R. Hoff

 Director (Principal Executive Officer)

 /s/ C. Earl Armstrong III

 Senior Vice President - Finance

 C. Earl Armstrong III

 and Chief Financial Officer (Principal

 Financial and Accounting Officer)

 /s/ W. Christopher Beeler, Jr.

 Director (Board Chair)

 W. Christopher Beeler, Jr.

 /s/ Maria C. Duey

 Maria C. Duey

 /s/ Paulette Garafalo

 Paulette Garafalo

 /s/ Christopher L. Henson

 Christopher L. Henson

 /s/ Paul A. Huckfeldt

 Paul A. Huckfeldt

 /s/ Tonya H. Jackson

 Tonya H. Jackson

 /s/ Ellen C. Taaffe

 Ellen C. Taaffe

 HOOKER FURNISHINGS CORPORATION AND SUBSIDIARIES

 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 Page

 Management's Report on Internal Control Over Financial Reporting

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

 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

 F- 1

 MANAGEMENT'S REPORT ON INTERNAL
CONTROL OVER FINANCIAL REPORTING

 To the Shareholders of

 Martinsville, Virginia

 Management is responsible for establishing and
maintaining adequate internal control over financial reporting, as defined in Securities Exchange Act Rule 13a-15(f). Under the supervision
and with the participation of management, including the principal executive officer and principal financial officer, the Company conducted
an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control—Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the Company's
evaluation under that framework, management concluded that the Company's internal control over financial reporting was effective
as of February 2, 2025.

 The effectiveness of the Company's internal
control over financial reporting as of February 2, 2025 has been audited by KPMG LLP, the Company's independent registered public
accounting firm, as stated in their report which is included herein.

 Jeremy R. Hoff

 Chief Executive Officer and Director

 (Principal Executive Officer)

 C. Earl Armstrong III

 Senior Vice President – Finance

 and Chief Financial Officer

 (Principal Financial and Accounting Officer)

 F- 2

 Report of Independent Registered Public Accounting
Firm

 To 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. 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. 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 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. Revenue is
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.

 /s/ KPMG LLP

 We have served as the Company's auditor
since 2003.

 Charlotte, North Carolina

 F- 3

 Report of Independent Registered Public Accounting
Firm

 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. In our
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
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.

 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.

 /s/ KPMG LLP

 Charlotte, North Carolina

 F- 4

 CONSOLIDATED BALANCE
SHEETS

 (In thousands)

 As of

 2025

 2024

 Current assets

 Cash and cash equivalents

 $

 6,295

 $

 43,159

 Trade accounts receivable, net (See notes 5 and 6)

 58,198

 51,280

 Inventories (see note 7)

 70,755

 61,815

 Income tax recoverable

 3,014

 Prepaid expenses and other current assets

 5,355

 5,530

 Total current assets

 141,124

 164,798

 Property, plant and equipment, net (See note 8)

 28,195

 29,142

 Cash surrender value of life insurance policies (See note 11)

 29,238

 28,528

 Deferred taxes (See note 17)

 16,057

 12,005

 Operating leases right-of-use assets (See note 12)

 45,575

 50,801

 Intangible assets, net (See note 10)

 22,104

 28,622

 Goodwill (See note 10)

 15,036

 15,036

 Other assets

 16,613

 14,654

 Total non-current assets

 172,818

 178,788

 Total assets

 $

 313,942

 $

 343,586

 Liabilities and Shareholders' Equity

 Current liabilities

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

 $

 -

 $

 1,393

 Trade accounts payable

 20,001

 16,470

 Accrued salaries, wages and benefits

 3,851

 7,400

 Accrued income taxes

 -

 Customer deposits

 5,655

 5,920

 Current portion of operating lease liabilities (See note 12)

 7,502

 6,964

 Other accrued expenses

 2,916

 3,262

 Total current liabilities

 39,974

 41,409

 Long term debt (See note 13)

 21,717

 21,481

 Deferred compensation (See note 14)

 6,795

 7,418

 Operating lease liabilities (See note 12)

 41,073

 46,414

 Other long-term liabilities (See note 4)

 -

 Total long-term liabilities

 69,585

 76,202

 Total liabilities

 109,559

 117,611

 Shareholders' equity

 Common stock, no par value, 20,000 shares authorized, 10,703 and 10,672 shares issued and outstanding on each date

 50,474

 49,524

 Retained earnings

 153,336

 175,717

 Accumulated other comprehensive income

 Total shareholders' equity

 204,383

 225,975

 Total liabilities and shareholders' equity

 $

 313,942

 $

 343,586

 See accompanying Notes to Consolidated Financial Statements.

 F- 5

 CONSOLIDATED STATEMENTS
OF OPERATIONS

 (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

 2025

 2024

 2023

 Net sales

 $
 397,465

 $
 433,226

 $
 583,102

 Cost of sales

 308,195

 322,705

 461,056

 Inventory write downs

 1,829

 28,752

 Gross profit

 88,648

 108,692

 93,294

 Selling and administrative expenses

 100,215

 92,678

 95,815

 Trade name impairment charges

 2,831

 -

 Intangible asset amortization

 3,687

 3,656

 3,512

 Operating (loss) / income

 ( 18,085
)

 12,358

 ( 6,046
)

 Other income, net

 2,933

 1,653

 Interest expense, net

 1,274

 1,573

 (Loss) / income before income taxes

 ( 16,426
)

 12,438

 ( 6,149
)

 Income tax (benefit) / expense

 ( 3,919
)

 2,573

 ( 1,837
)

 $
)

 $
 9,865

 $
)

 (Loss) / earnings per share:

 Basic

 $
 ( 1.19
)

 $
 0.91

 $
 ( 0.37
)

 Diluted

 $
 ( 1.19
)

 $
 0.91

 $
 ( 0.37
)

 Weighted average shares outstanding:

 Basic

 10,525

 10,684

 11,593

 Diluted

 10,525

 10,838

 11,593

 Cash dividends declared per share

 $
 0.92

 $
 0.89

 $
 0.82

 See accompanying Notes to Consolidated Financial Statements.

 F- 6

 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

 2025

 2024

 2023

 Net (Loss) / Income

 $
)

 $
 9,865

 $
)

 Other comprehensive income:

 Actuarial adjustment

 ( 212
)

 ( 172
)

 1,204

 Income tax effect on adjustment

 ( 288
)

 Adjustments to net periodic benefit cost

 ( 161
)

 ( 131
)

 Total Comprehensive (Loss) / Income

 $
 ( 12,668
)

 $
 9,734

 $
 ( 3,396
)

 See accompanying Notes to Consolidated Financial Statements.

 F- 7

 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

 2025

 2024

 2023

 Operating Activities:

 $
)

 $
 9,865

 $
)

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

 Inventory valuation expense

 1,829

 28,752

 Trade name impairment charge

 2,831

 -

 Depreciation and amortization

 9,229

 8,956

 8,816

 Loss/(Gain) on disposal of assets

 -

 Deferred income tax expense/(benefit)

 ( 4,006
)

 2,523

 ( 3,160
)

 Non-cash restricted stock and performance awards

 1,706

 1,244

 Provision for doubtful accounts and sales allowances

 3,327

 ( 727
)

 ( 3,673
)

 Gain on life insurance policies

 ( 1,213
)

 ( 984
)

 ( 1,179
)

 Changes in assets and liabilities:

 Trade accounts receivable

 ( 10,245
)

 11,577

 16,831

 Inventories

 ( 9,562
)

 34,776

 ( 47,827
)

 Income tax recoverable

 2,492

 1,283

 Prepaid expenses and other assets

 ( 2,988
)

 ( 5,111
)

 ( 5,711
)

 Trade accounts payable

 3,365

 ( 15,781
)

 Accrued salaries, wages and benefits

 ( 3,549
)

 ( 1,890
)

 2,148

 Accrued income taxes

 -

 -

 Customer deposits

 ( 265
)

 ( 2,590
)

 ( 1,911
)

 Operating lease liabilities

 ( 57
)

 Other accrued expenses

 ( 1,138
)

 ( 4,261
)

 3,254

 Deferred compensation

 ( 830
)

 ( 937
)

 ( 542
)

 Net cash (used in) / provided by operating activities

 ( 23,016
)

 55,471

 ( 21,718
)

 Investing Activities:

 Acquisition

 -

 ( 2,373
)

 ( 25,274
)

 Purchases of property, plant and equipment

 ( 3,243
)

 ( 6,815
)

 ( 4,199
)

 Proceeds from sale of property and equipment

 -

 -

 Premiums paid on life insurance policies

 ( 395
)

 ( 406
)

 ( 492
)

 Proceeds received on life insurance policies

 1,036

 -

 Net cash used in investing activities

 ( 2,699
)

 ( 8,558
)

 ( 29,965
)

 Financing Activities:

 Proceeds from revolving credit facility

 22,085

 -

 36,190

 Payments for long-term loans

 ( 22,900
)

 ( 1,400
)

 ( 700
)

 Cash dividends paid

 ( 9,854
)

 ( 9,682
)

 ( 9,602
)

 Debt issuance cost

 ( 480
)

 -

 ( 37
)

 Purchase and retirement of common stock

 -

 ( 11,674
)

 ( 13,342
)

 Proceeds from long-term loans

 -

 25,000

 Payments for revolving credit facility

 -

 ( 36,190
)

 Net cash (used in)/provided by financing activities

 ( 11,149
)

 ( 22,756
)

 1,319

 Net (decrease) / increase in cash and cash equivalents

 ( 36,864
)

 24,157

 ( 50,364
)

 Cash and cash equivalents at the beginning of year

 43,159

 19,002

 69,366

 Cash and cash equivalents at the end of year

 $
 6,295

 $
 43,159

 $
 19,002

 Supplemental schedule of cash flow information:

 Interest paid, net

 $
 1,312

 $
 1,375

 $

 Income taxes (refund) / paid, net

 ( 2,328
)

 Supplemental schedule of noncash investing activities:

 Increase / (Decrease) in lease liabilities arising from obtaining right-of-use assets

 3,201

 ( 10,646
)

 25,241

 Increase in property and equipment through accrued purchases

 See accompanying Notes to Consolidated Financial Statements.

 F- 8

 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

 Accumulated

 Other

 Total

 Common Stock

 Retained

 Comprehensive

 Shareholders'

 Shares

 Amount

 Earnings

 Income

 Equity

 Balance at January 30, 2022

 11,922

 $
 53,295

 $
 207,884

 $
 ( 51
)

 $
 261,128

 Net loss

 $
)

 $
)

 Actuarial adjustments on defined benefit plan, net of tax of ($ 288)

 $

 Cash dividends paid and accrued ($ 0.82 per share)

 ( 9,602
)

 ( 9,602
)

 Purchase and retirement of common stock

 ( 820
)

 ( 3,770
)

 ( 9,584
)

 ( 13,354
)

 Restricted stock grants, net of forfeitures

 ( 101
)

 ( 101
)

 Restricted stock compensation cost

 1,266

 1,266

 Performance-based restricted stock units cost

 PSU awards

 ( 526
)

 ( 526
)

 Balance at January 29, 2023

 11,197

 $
 50,770

 $
 184,386

 $

 $
 236,021

 Net income

 $
 9,865

 $
 9,865

 Actuarial adjustments on defined benefit plan, net of tax of $ 41

 $
 ( 131
)

 ( 131
)

 Cash dividends paid and accrued ($ 0.89 per share)

 ( 9,682
)

 ( 9,682
)

 Purchase and retirement of common stock

 ( 620
)

 $
 ( 2,952
)

 ( 8,852
)

 ( 11,804
)

 Restricted stock grants, net of forfeitures

 ( 156
)

 ( 156
)

 Restricted stock compensation cost

 1,702

 1,702

 Performance-based restricted stock units cost

 PSU awards

 ( 613
)

 ( 613
)

 Balance at January 28, 2024

 10,672

 $
 49,524

 $
 175,717

 $

 $
 225,975

 Net loss

 $
)

 $
)

 Actuarial adjustments on defined benefit plan, net of tax of $ 51

 $
 ( 161
)

 ( 161
)

 Cash dividends paid and accrued ($ 0.92 per share)

 ( 9,874
)

 ( 9,874
)

 Restricted stock grants, net of forfeitures

 $
 ( 404
)

 ( 404
)

 Restricted stock compensation cost

 1,593

 1,593

 Performance-based restricted stock units cost

 PSU awards

 ( 692
)

 ( 692
)

 Balance at February 2, 2025

 10,703

 $
 50,474

 $
 153,336

 $

 $
 204,383

 See accompanying Notes to
Consolidated Financial Statements.

 F- 9

 HOOKER FURNISHINGS CORPORATION AND SUBSIDIARIES

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 (Dollar and share amounts in tables, except per
share amounts, in thousands unless otherwise indicated)

 For the Fifty-Three Weeks Ended February 2, 2025

 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Nature of Business

 Hooker Furnishings Corporation and subsidiaries
(the "Company," "we," "us" and "our") design, import, manufacture and market residential
household furniture, hospitality and contract furniture, lighting, accessories, and home d cor for sale to wholesale and retail
merchandisers located principally in North America.

 Consolidation

 The consolidated financial statements include
the accounts of Hooker Furnishings Corporation and our wholly owned subsidiaries. All material intercompany accounts and transactions
have been eliminated in consolidation. All references to the Company refer to the Company and our consolidated subsidiaries, unless specifically
referring to segment information.

 Operating Segments

 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. 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:

 better understand our performance;

 better assess our prospects for future net cash
flows; and

 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. We measure the results
of our segments using, among other measures, each segment's net sales, gross profit and operating income, as determined by the information
regularly reviewed by the CODM.

 For financial reporting purposes, we are organized
into three 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;
and

 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.

 Cash and Cash Equivalents

 We consider cash on hand, demand deposits in banks
and all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents.

 Trade Accounts Receivable

 Substantially all of our trade accounts receivable
are due from retailers and dealers that sell residential home furnishings or commercial purchasers of our hospitality and senior living
products, and consist of a large number of entities with a broad geographic dispersion. We perform credit evaluations of our customers
and generally do not require collateral.

 F- 10

 These trade accounts receivable are reported net
of customer allowances and an allowance for doubtful accounts.

 Reserves for customer allowances comprise the
majority of the reduction of our gross trade accounts receivable to the estimated fair value reported on the face of our financial statements.
We regularly review and revise customer allowances based on unprocessed claims received and current and historical activity and any agreements
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
customers.

 We regularly review and revise accounts receivable
for doubtful accounts based upon historical bad debts. If the financial condition of a customer or customers were to deteriorate, resulting
in an impairment of their ability to make payments, additional bad debt allowances may be required. In the event a receivable is determined
to be potentially uncollectible, we engage collection agencies or law firms to attempt to collect amounts owed to us after all internal
collection attempts have ended. Once we have determined the receivable is uncollectible, it is charged against the allowance for doubtful
accounts.

 Fair Value Measurements

 We utilize valuation techniques that maximize
the use of observable inputs and minimize the use of unobservable inputs to the extent possible. We determine fair value based on assumptions
that we believe market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering
market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable
inputs, which are categorized in one of the following levels:

 Level 1 Inputs: Unadjusted quoted prices
in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

 Level 2 Inputs: Observable inputs other
than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for
substantially the full term of the asset or liability.

 Level 3 Inputs: Unobservable inputs for
the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations
in which there is little, if any, market activity for the asset or liability at measurement date.

 Fair Value of Financial Instruments

 The carrying value of certain of our financial
instruments (cash and cash equivalents, trade accounts receivable and payable, and accrued liabilities) approximates fair value because
of the short-term nature of those instruments. The carrying value of Company-owned life insurance is marked to market each reporting period
and any change in fair value is reflected in income for that period. See Note 9 for details.

 Inventories

 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.

 Property, Plant and Equipment

 Property, plant and equipment are stated at cost,
less allowances for depreciation. Provision for depreciation has been computed at annual rates using straight-line or declining balance
depreciation methods that will amortize the cost of the depreciable assets over their estimated useful lives.

 Leases

 Leases are classified as either finance leases
or operating leases based on criteria in Topic 842. All of our current leases are classified as operating leases. We do not currently
have finance leases but could in the future.

 F- 11

 Operating lease right-of-use ("ROU")
assets and liabilities are recognized on the adoption date based on the present value of lease payments over the remaining lease term.
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
1.85%. 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
in the contract to each lease and non-lease component based on the component's relative stand-alone price to determine the lease
payments. Lease and non-lease components are accounted for separately. Lease expense for operating leases is recognized on a straight-line
basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in
the initial lease liability. Some of our real estate leases contain variable lease payments, including payments based on the percentage
increase in the Consumer Price Index for Urban Consumers ("CPI-U"). We used February 2019 CPI-U issued by the US Department
of Labor's Bureau of Labor Statistics to measure lease payments and calculate lease liabilities upon adoption of this standard.
Additional payments based on the change in an index or rate, or payments based on a change in our portion of the operating expenses, including
real estate taxes and insurance, are recorded when incurred.

 We have a sub-lease at one of our warehouses.
In accordance with the provisions of Topic 842, since we have not been relieved as the primary obligor of the warehouse lease, we cannot
net the sublease income against our lease payment to calculate the lease liability and ROU asset. Our practice is to straight-line the
sub-lease income over the term of the sublease.

 Our leases have remaining lease terms of less
than one year to ten years, some of which include options to extend the leases for up to ten years. We have elected not to recognize ROU
assets and lease liabilities that arise from short term leases for any class of underlying asset. Short term leases are leases with lease
terms of 12 months or less with either (a) no renewal option or (b) a renewal option which we are not reasonably certain to exercise.

 Impairment of Long-Lived Assets

 Long-lived assets, such as property, plant and
equipment and definite-lived assets, are evaluated for impairment annually or more frequently when events or changes in circumstances
indicate that the carrying amount of the assets or asset groups may not be recoverable through the estimated undiscounted future cash
flows from the use of those assets. When any such impairment exists, the related assets are written down to fair value. Long-lived assets
subject to disposal by sale are measured at the lower of their carrying amount or fair value less estimated cost to sell, are no longer
depreciated, and are reported separately as "assets held for sale" in the consolidated balance sheets.

 Intangible Assets and Goodwill

 We own both definite-lived (amortizable) assets
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.

 In accordance with ASC 350, Intangibles –
Goodwill and Other, our goodwill, trademarks and trade names are tested for impairment annually as of the first day of our fourth quarter
or more frequently if events or changes in circumstances indicate that the asset might be impaired. Circumstances that could indicate
a potential impairment include, but are not limited to:

 a significant adverse change in the economic
or business climate either within the furniture industry or the national or global economy;

 significant changes in demand for our products;

 loss of key personnel; and

 the likelihood that a reporting unit or significant
portion of a reporting unit will be sold or otherwise subject to disposal.

 F- 12

 The assumptions used to determine the fair value
of our intangible assets are highly subjective and judgmental and include long-term growth rates, sales volumes, projected revenues, assumed
royalty rates and factors used to develop an applied discount rate. If the assumptions that we use in these calculations differ from actual
results, we may realize additional impairment on our intangible assets that may have a material-adverse effect on our results of operations
and financial condition.

 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. These policies had a carrying value of $ 29.2 million at February
2, 2025 and have a face value of approximately $ 53 million as of that date. 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.

 Revenue Recognition

 We recognize revenue pursuant to Accounting Standards
Codification 606, which requires revenue to be recognized at an amount that reflects the consideration we expect to be entitled to receive
in exchange for transferring goods or services to our customers. Our policy is to record revenue when control of the goods transfers to
the customer. We have a present right to payment at the time of shipment as customers are invoiced at that time. We believe the customer
obtains control of goods at the time of shipment, which is typically when title passes. While the customer may not enjoy immediate physical
possession of the products, the customers' right to re-direct shipment indicates control. In the very limited instances when products
are sold under consignment arrangements, we do not recognize revenue until control over such products has transferred to the end consumer.
Orders are generally non-cancellable once loaded into a shipping trailer or container.

 The transaction price for each contract is the
stated price of the product, reduced by any stated discounts or allowances at that point in time. We do not engage in sales of products
that attach a future material right which could result in a separate performance obligation for the purchase of goods in the future at
a material discount. The implicit contract with the customer, as reflected in the order acknowledgement and invoice, states the final
terms of the sale, including the description, quantity, and price of each product purchased. The transaction price reflects the amount
of estimated consideration to which we expect to be entitled. This amount of variable consideration included in the transaction price,
and measurement of net sales, is included in net sales only to the extent that it is probable that there will be no significant reversal
in a future period.

 Net sales are comprised of gross revenues from
sales of home furnishings and hospitality furniture products and are recorded net of allowances for trade promotions, estimated product
returns, rebate advertising programs and other discounts. Physical product returns are very rare due to the high probability of damages
to our products in return transit. Other revenues, primarily royalties, are immaterial to our overall results. Payment is typically due
within 30-60 days of shipment for customers qualifying for payment terms. Collectability is reasonably assured since we extend credit
to customers for whom we have performed credit evaluations and/or from whom we have received a down payment or deposit. Due to the highly-customized
nature of our hospitality products, we typically require substantial prepayments on these orders, with the balance due within 30 days
of delivery. For our outdoor furnishings, most orders require a 50% deposit upon order and the balance when production is started.

 Cost of Sales

 The major components of cost of sales are:

 the cost of imported products purchased for resale;

 raw materials and supplies used in our domestically manufactured products;

 labor and overhead costs associated with our domestically manufactured products;

 the cost of our foreign import operations;

 charges associated with our inventory reserves;

 warehousing and certain shipping and handling costs; and

 all other costs required to be classified as cost of sales.

 F- 13

 Selling and Administrative Expenses

 The major components of our selling and administrative expenses are:

 the cost of our marketing and merchandising efforts, including showroom expenses;

 sales and design commissions;

 the costs of administrative support functions including, executive management,
information technology, human resources and finance; and

 all other costs required to be classified as selling and administrative expenses.

 Advertising

 We offer advertising programs to qualified dealers
under which we may provide signage, catalogs and other marketing support to our dealers and may reimburse some advertising and other costs
incurred by our dealers in connection with promoting our products. The cost of these programs does not exceed the fair value of the benefit
received. We charge the cost of point-of-purchase materials (including signage, catalogs, and fabric and leather swatches) to selling
and administrative expense as incurred. Advertising costs charged to selling and administrative expense for fiscal years 2025, 2024, and
2023 were $ 2.6 million, $ 2.6 million, and $ 2.0 million, respectively. The costs for other advertising allowance programs are charged against
net sales. We also have arrangements with some dealers to reimburse them for a portion of their advertising costs, which provides advertising
benefits to us. Costs for these arrangements are expensed as incurred and are netted against net sales in our consolidated statements
of operations and comprehensive income.

 Earnings Per Share

 We use the two-class method to compute basic earnings
per share. Under this method we allocate earnings to common shares and participating securities according to their participation
rights in dividends declared and undistributed earnings and divide the income available to each class by the weighted average number of
common shares for the period in each class. Unvested restricted stock grants made to our non-employee directors and certain employees
are considered participating securities because the shares have the right to receive non-forfeitable dividends. Because the participating
shares have no obligation to share in net losses, we do not allocate losses to our common shares in this calculation.

 Diluted earnings per share reflect the potential
dilutive effect of securities that could share in our earnings. Restricted stock awarded to non-employee directors and certain employees
and restricted stock units granted to employees that have not yet vested are considered when computing diluted earnings per share.
We use the treasury stock method to determine the dilutive effect of both unvested restricted stock and unvested restricted stock units.
Shares of unvested restricted stock and unvested restricted stock units under a stock-based compensation arrangement are considered options
for purposes of computing diluted earnings per share and are considered outstanding shares as of the grant date for purposes of computing
diluted earnings per share even though their exercise may be contingent upon vesting. Those stock-based awards are included in the diluted
earnings per share computation even if the non-employee director may be required to forfeit the stock at some future date, or no shares
may ever be issued to the employees. Unvested restricted stock and unvested restricted stock units are not included in outstanding common
shares in computing basic earnings per share.

 Use of Estimates

 The preparation of financial statements in conformity with U.S. 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; and stock-based compensation. 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.

 Recently Adopted Accounting Standards

 In November 2023, the FASB issued ASU 2023-07,
"Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". The new guidance requires enhanced reportable
segment disclosures to include significant segment expenses. The Company adopted this ASU on January 29, 2024. The adoption did not have
an impact on our Consolidated Financial Statements. See "Note 18. Segment Information."

 We reviewed all other newly issued accounting
pronouncements and concluded that they are either not applicable to our business or are not expected to have a material effect on our
Consolidated Financial Statements as a result of future adoption.

 F- 14

 NOTE 2 - FISCAL YEAR

 Our fiscal years end on the Sunday closest to
January 31. In some years, generally once every six years, the fourth quarter will be fourteen weeks long and the fiscal year will consist
of fifty-three weeks. Our quarterly periods are based on thirteen-week "reporting periods," which end on Sundays. As a result,
each quarterly period generally will be thirteen weeks, or 91 days long, except during a 53-week fiscal year which will have 14 weeks
in the fourth quarter. The 2025 fiscal year that ended on February 2, 2025 was a 53-week fiscal year.

 In the notes to the consolidated financial statements, references to
the:

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

 2023 fiscal year and comparable terminology mean the fiscal year that began
January 31, 2022 and ended January 29, 2023.

 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.

 F- 15

 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

 $
 23,909

 Cash received from the seller for final working capital adjustment

 ( 639
)

 Escrow

 2,003

 Fair value of earnout

 Total purchase price

 $
 26,039

 Fair value estimates of assets acquired and liabilities assumed

 Accounts receivable

 $
 1,560

 Inventory

 2,577

 Prepaid expenses and other current assets

 Property

 Intangible assets

 11,451

 Goodwill

 14,462

 Customer deposits

 ( 3,276
)

 Accounts payable

 ( 816
)

 Accrued expenses

 ( 16
)

 Total purchase price

 $
 26,039

 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. All goodwill
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; and

 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.

 F- 16

 NOTE
5 – DOUBTFUL ACCOUNTS AND CUSTOMER ALLOWANCES

 The activity in the allowance for doubtful accounts was:

 2025

 2024

 2023

 Balance at beginning of year

 $
 1,817

 $
 1,769

 $
 2,016

 Non-cash charges to cost and expenses

 3,822

 ( 157
)

 Increase / (decrease) in allowance, net of recoveries

 ( 512
)

 ( 356
)

 Balance at end of year

 $
 5,127

 $
 1,817

 $
 1,769

 The activity in customer allowances was:

 Weeks Ended

 2025

 2024

 2023

 Balance at beginning of year

 $
 1,800

 $
 3,702

 $
 7,284

 Charges to cost and expenses

 7,602

 8,376

 11,983

 Less allowances applied

 ( 8,097
)

 ( 10,541
)

 ( 15,364
)

 Increase / (decrease) in allowance, net of recoveries

 ( 286
)

 ( 201
)

 Balance at end of year

 $
 1,019

 $
 1,800

 $
 3,702

 NOTE
6 – ACCOUNTS RECEIVABLE

 2025

 2024

 Gross accounts receivable

 $
 64,344

 $
 54,897

 Customer allowances

 ( 1,019
)

 ( 1,800
)

 Allowance for doubtful accounts

 ( 5,127
)

 ( 1,817
)

 Trade accounts receivable

 $
 58,198

 $
 51,280

 NOTE
7 – INVENTORIES

 2025

 2024

 Finished furniture

 $
 82,635

 $
 75,354

 Furniture in process

 1,524

 1,702

 Materials and supplies

 11,229

 10,538

 Inventories at FIFO

 95,388

 87,594

 Reduction to LIFO basis

 ( 24,633
)

 ( 25,779
)

 Inventories

 $
 70,755

 $
 61,815

 At February 2, 2025 and January 28, 2024, we had
$ 253,000 and $ 198,000, respectively, in consigned inventories, which are included in the "Finished furniture" line in the
table above.

 At February 2, 2025 and January 28, 2024, we
held $ 7.2 million and $ 4.1 million, respectively, in inventory in Vietnam.

 F- 17

 NOTE
8 – PROPERTY, PLANT AND EQUIPMENT

 Depreciable Lives

 (In years)

 2025

 2024

 Buildings and land improvements

 15 - 30

 $
 34,439

 $
 33,785

 Computer software and hardware

 3 - 10

 8,581

 8,994

 Machinery and equipment

 12,165

 11,708

 Leasehold improvements

 Term of lease

 13,233

 12,436

 Furniture and fixtures

 3 - 8

 7,487

 7,256

 Other

 Total depreciable property at cost

 76,606

 74,877

 Less accumulated depreciation

 ( 51,443
)

 ( 47,700
)

 Total depreciable property, net

 25,163

 27,177

 Land

 1,077

 1,077

 Construction-in-progress

 1,955

 Property, plant and equipment, net

 $
 28,195

 $
 29,142

 Depreciation
expenses for fiscal 2025, 2024, and 2023 were $ 4.4 million, $ 4.9 million, and $ 5.3 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. 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. The activity in capitalized software costs was:

 2025

 2024

 2023

 Balance beginning of year

 $

 $
 1,348

 $
 2,223

 Additions

 -

 Amortization expense

 ( 51
)

 ( 400
)

 ( 875
)

 Disposals

 -

 ( 889
)

 -

 Balance end of year

 $

 $

 $
 1,348

 NOTE
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. 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
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.

 F- 18

 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
expense of $ 273,000 were capitalized in fiscal 2024. Implementation costs of $ 5.4 million and interest expense of $ 84,000 were capitalized
in fiscal 2023. 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

 Gross carrying amount

 Accumulated amortization

 Gross carrying amount

 Accumulated amortization

 Implementation Costs

 $
 16,782

 $
 ( 1,561
)

 $
 13,736

 $
 ( 414
)

 Interest Expenses

 ( 27
)

 ( 8
)

 NOTE
10 – 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 of:

 Goodwill
 related to the Shenandoah (acquired 2017), Sunset West (acquired 2022) and BOBO (acquired
 2023) acquisitions; and

 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. Based on our internal analyses, at February 2, 2025, we concluded Shenandoah, Sunset West and
BOBO goodwill is not impaired.

 In conjunction with our evaluation of the cash
flows generated by the Home Meridian, Bradington-Young and BOBO reporting units, we evaluated the carrying value of trademarks and trade
names using the income approach, specifically the relief from royalty method, which values the trademarks and trade names by estimating
the savings achieved by ownership of the trademarks and trade name when compared to licensing the trademarks and trade names from an independent
owner. 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
"HF Custom". 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.

 F- 19

 Details
of our intangible assets were as follows:

 Gross carrying
 amount

 Accumulated
 Amortization

 Gross carrying
 amount

 Accumulated
 Amortization

 Intangible assets with indefinite lives:

 Goodwill

 Domestic Upholstery - Shenandoah *

 -

 -

 Domestic Upholstery - Sunset West

 14,462

 -

 14,462

 -

 All Other - BOBO Intriguing Objects

 -

 -

 Goodwill

 15,036

 -

 15,036

 -

 Trademarks and Trade names *

 5,180

 -

 8,011

 -

 Intangible assets with definite lives:

 Customer Relations

 38,001

 ( 22,349
)

 38,001

 ( 18,982
)

 Trademarks and Trade names

 2,334

 ( 1,062
)

 2,334

 ( 741
)

 Intangible assets, net

 45,515

 ( 23,411
)

 48,346

 ( 19,723
)

 *: 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.

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

 Fiscal Year

 Amount

 2026

 3,528

 2027

 3,487

 2028

 2,178

 2029

 2,178

 2030

 2,178

 2031 and thereafter

 3,375

 $
 16,924

 NOTE
11 – 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:

 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; and

 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 2, 2025 and January 28, 2024, 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.

 F- 20

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

 Fair value at February 2, 2025

 Fair
 value at January 28, 2024

 Description

 Level 1

 Level 2

 Level 3

 Total

 Level 1

 Level 2

 Level 3

 Total

 (In thousands)

 Assets measured at fair value

 Company-owned life insurance

 $
 -

 $
 29,238

 $
 -

 $
 29,238

 $
 -

 $
 28,528

 $
 -

 $
 28,528

 NOTE
12 – 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. 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.

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

 January 29, 2023

 Operating lease cost

 $
 10,190

 $
 10,912

 $
 9,908

 Variable lease cost

 Short-term lease cost

 Total operating lease cost

 $
 10,869

 $
 11,559

 $
 10,469

 Operating cash outflows

 $
 10,434

 $
 10,537

 $
 10,527

 The right-of-use assets and lease liabilities
recorded on our Consolidated Balance Sheets as of February 2, 2025 and January 28, 2024 were:

 Real estate

 $
 44,640

 $
 49,968

 Property and equipment

 Total operating leases right-of-use assets

 $
 45,575

 $
 50,801

 Current portion of operating lease liabilities

 $
 7,502

 $
 6,964

 Long term operating lease liabilities

 41,073

 46,414

 Total operating lease liabilities

 $
 48,575

 $
 53,378

 The weighted-average discount rate is 5.46 %. The
weighted-average remaining lease term is 6.2 years.

 F- 21

 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 2,
2025.

 Fiscal Year

 Undiscounted

Future

Operating

Lease Payments

 2026

 $
 9,957

 2027

 10,089

 2028

 8,423

 2029

 7,723

 2030

 7,336

 2031 and thereafter

 14,480

 Total lease payments

 $
 58,008

 Less: impact of discounting

 ( 9,433
)

 Present value of lease payments

 $
 48,575

 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.

 NOTE
13 – 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 provides
for a revolving credit facility in a committed principal amount of up to $ 70,000,000 (the "Revolving Commitment"), including
subline of $ 8,000,000 for letters of credit, and an option to increase the Revolving Commitment by up to $ 30,000,000 upon meeting certain
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.

 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 %. 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.

 F- 22

 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 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.

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

 NOTE
14 – 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 $ 1.8 million in fiscal 2025 and 2024, and $ 1.5 million in fiscal 2023.

 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:

 a
 supplemental retirement income plan ("SRIP") for certain former and current executives
 of Hooker Furnishings Corporation; and

 the
 Pulaski Furniture Corporation Supplemental Executive Retirement Plan ("SERP")
 for certain former executives.

 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 Annuity. 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.

 F- 23

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

 SRIP (Supplemental Retirement Income Plan)

 2025

 2024

 Change in benefit obligation:

 Beginning projected benefit obligation

 $
 7,371

 $
 7,976

 Service cost

 Interest cost

 Benefits paid

 ( 877
)

 ( 877
)

 Actuarial (gain)/ loss

 ( 64
)

 ( 150
)

 Ending projected benefit obligation (funded status)

 $
 6,836

 $
 7,371

 Accumulated benefit obligation

 $
 6,677

 $
 7,209

 Discount rate used to value the ending benefit obligations:

 5.30
 %

 5.05
 %

 Amount recognized in the consolidated balance sheets:

 Current liabilities (Accrued salaries, wages and benefits line)

 $

 $

 Non-current liabilities (Deferred compensation line)

 5,874

 6,410

 Total

 $
 6,836

 $
 7,371

 2025

 2024

 2023

 Net periodic benefit cost

 Service cost

 $

 $

 $

 Interest cost

 Net (gain)/loss

 ( 236
)

 ( 279
)

 Net periodic benefit cost

 $

 $

 $

 Other changes recognized in accumulated other comprehensive income

 Net (gain) / loss arising during period

 ( 64
)

 ( 150
)

 ( 1,004
)

 Amortizations:

 Gain (loss)

 ( 83
)

 Total recognized in other comprehensive income

 ( 1,087
)

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

 $

 $

 $
 ( 635
)

 Assumptions used to determine net periodic benefit cost:

 Discount rate

 5.05
 %

 4.85
 %

 2.70
 %

 Increase in future compensation levels

 4.00
 %

 4.00
 %

 4.00
 %

 Estimated Future Benefit Payments:

 Fiscal 2026

 $

 Fiscal 2027

 Fiscal 2028

 Fiscal 2029

 Fiscal 2030

 Fiscal 2031 through fiscal 2035

 3,396

 For
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.

 F- 24

 At February 2, 2025, the actuarial gain related
to the SRIP amounted to $ 64,000, net of tax of $ 15,000. At January 28, 2024, the actuarial gain related to the SRIP amounted to $ 150,000,
net of tax of $ 41,000. At January 29, 2023, the actuarial gain related to the SRIP amounted to $ 1 million, net of tax of $ 288,000. The
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. There is no expected prior service (cost) or credit amortization.

 SERP (Supplemental Executive Retirement Plan)

 2025

 2024

 Change in benefit obligation:

 Beginning projected benefit obligation

 $
 1,224

 $
 1,295

 Service cost

 -

 -

 Interest cost

 Benefits paid

 ( 171
)

 ( 157
)

 Actuarial (gain)/loss

 Ending projected benefit obligation (funded status)

 $
 1,137

 $
 1,224

 Accumulated benefit obligation

 $
 1,137

 $
 1,224

 Discount rate used to value the ending benefit obligations:

 5.40
 %

 4.90
 %

 Amount recognized in the consolidated balance sheets:

 Current liabilities (Accrued salaries, wages and benefits line)

 $

 $

 Non-current liabilities (Deferred compensation line)

 1,069

 Total

 $
 1,137

 $
 1,224

 2025

 2024

 2023

 Net periodic benefit cost

 Service cost

 $
 -

 $
 -

 $
 -

 Interest cost

 Net gain

 ( 12
)

 ( 15
)

 ( 2
)

 Net periodic benefit cost

 $

 $

 $

 Other changes recognized in accumulated other comprehensive income

 Net (gain)/loss arising during period

 ( 119
)

 Amortizations:

 Gain (Loss)

 Total recognized in other comprehensive income

 ( 117
)

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

 $

 $

 $
 ( 78
)

 Assumptions used to determine net periodic benefit cost:

 Discount rate

 4.90
 %

 4.70
 %

 2.80
 %

 Increase in future compensation levels

 N/A

 N/A

 N/A

 Estimated Future Benefit Payments:

 Fiscal 2026

 $

 Fiscal 2027

 Fiscal 2028

 Fiscal 2029

 Fiscal 2030

 Fiscal 2031 through fiscal 2035

 For the SERP, the discount rate assumption used
to measure the projected benefit obligations is set by reference to a certain hypothetical AA-rated corporate bond spot-rate yield curve
constructed by our actuary, Aon ("Aon") and the plan's projected cash flows, rounded to the nearest 10 bps. 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 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 determine the fiscal 2025 net periodic cost.

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

 F- 25

 NOTE
15 – SHARE-BASED COMPENSATION

 Our Stock Incentive Plan permits incentive awards
of restricted stock, restricted stock units, stock appreciation rights and performance grants to key employees. The Stock Incentive Plan
also provides for annual restricted stock awards to non-employee directors. We have issued restricted stock awards to our non-employee
directors since January 2006 and certain other management employees since 2014. The Company's 2024 Amendment and Restatement of
the Hooker Furnishings Corporation Stock Incentive Plan (the "2024 Plan") was approved by shareholders on June 4, 2024 at
the annual shareholders meeting. The 2024 plan preserves key elements and historical award practices, while reserving 900,000 new shares
of the Company's common stock.

 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
to certain senior executives since 2011. Each restricted stock unit, or "RSU", entitles the executive to receive one share
of the Company's common stock if he or she remains continuously employed with the Company through the end of a three-year service
period. Under the 2024 Plan, each RSU grant vests one-third annually on the anniversary date, provided the executive officer remains continuously
employed with the Company through each vesting date. The RSUs may be paid in shares of the Company's common stock, cash or both,
at the discretion of the Compensation Committee. The RSUs are accounted for as "non-vested stock grants." Similar to the restricted
stock grants issued to our non-employee directors, RSU compensation expense is recognized ratably over the applicable service period.
However, unlike restricted stock grants, no shares are issued, or other payment made, until the end of the applicable vesting date (commonly
referred to as "cliff vesting"). Historically, grantees are not entitled to receive dividends on their RSUs during that time.
The fair value of each RSU is the market price of a share of our common stock on the grant date, reduced by the present value of the dividends
expected to be paid on a share of our common stock during the applicable service period, discounted at the appropriate risk-free rate.
Under the 2024 Plan, dividends declared on unvested RSU 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.

 F- 26

 Share-based compensation expense related to restricted
stock, RSU and PSU is included in the selling and administrative expenses on the consolidated statements of operations. The following
tables summarize stock awards activity, including the number and weighted-average grant-date fair value, compensation expense recognized,
unrecognized compensation expenses, and weighted-average vesting periods of the unvested shares for each grant as of February 2, 2025
(values are in thousands; number of shares and per-share amounts are in whole numbers):

 Time-based Restricted Stock

 Time-Based RSU

 Performance-Based PSU

 Number of Shares

 Weighted-Average Grant Date Fair Value per share

 Number of Shares

 Weighted-Average Grant Date Fair Value per share

 Number of Shares

 Weighted-Average Grant Date Fair Value per share

 Awards outstanding at January 30, 2022

 59,500

 $
 28.16

 22,819

 $
 24.62

 55,022

 $
 20.89

 Granted

 112,031

 18.55

 19,157

 15.86

 46,725

 18.26

 Vested

 ( 23,776
)

 34.28

 ( 4,211
)

 28.05

 -

 -

 Forfeited

 ( 15,451
)

 24.70

 -

 -

 ( 38,543
)

 13.92

 Awards outstanding at January 29, 2023

 132,304

 19.33

 37,765

 19.79

 63,204

 23.20

 Granted

 101,685

 18.43

 18,676

 16.19

 45,552

 18.73

 Vested

 ( 46,244
)

 15.71

 ( 9,052
)

 12.01

 -

 -

 Forfeited

 ( 5,960
)

 21.36

 -

 -

 ( 16,479
)

 37.20

 Awards outstanding at January 28, 2024

 181,785

 19.68

 47,389

 19.86

 92,277

 18.49

 Granted

 68,413

 18.30

 39,644

 21.77

 39,644

 17.15

 Vested

 ( 61,182
)

 21.69

 ( 21,987
)

 25.16

 -

 -

 Assumed

 -

 -

 -

 -

 ( 8,313
)

 Forfeited

 ( 37,599
)

 19.42

 ( 9,322
)

 20.47

 ( 64,633
)

 18.19

 Awards outstanding at February 2, 2025

 151,417

 $
 18.30

 55,724

 $
 19.05

 58,975

 $
 17.94

 2025

 2024

 2023

 Time-based Restricted Stock

 Grant date fair value of awards vested

 $
 1,327

 $

 $

 Stock based compensation expense

 1,121

 1,398

 1,015

 Time-based RSU

 Grant date fair value of awards vested

 Stock based compensation expense

 Performance-based PSU

 Grant date fair value of awards vested

 -

 -

 -

 Stock based compensation expense

 $
 ( 239
)

 $

 $

 As of

 2025

 2024

 2023

 Time-based Restricted Stock

 Unrecognized compensation cost

 $
 1,106

 $
 1,705

 $
 1,356

 Weighted-average remaining period

 1.6

 1.7

 1.8

 Time-based RSU

 Unrecognized compensation cost

 $

 $

 $

 Weighted-average remaining period

 2.0

 1.7

 1.8

 Performance-based PSU

 Unrecognized compensation cost

 $

 $

 $

 Weighted-average remaining period

 1.5

 1.7

 1.7

 F- 27

 NOTE
16 – 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. 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, 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:

 2025

 2024

 2023

 Restricted shares

 151,417

 181,785

 132,304

 RSUs and PSUs

 114,700

 139,666

 100,969

 266,117

 321,451

 233,273

 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.

 F- 28

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

 2025

 2024

 2023

 $
)

 $
 9,865

 $
)

 Less: Dividends on unvested restricted shares

 Net earnings allocated to unvested restricted stock

 -

 -

 Earnings available for common shareholders

 $
 ( 12,666
)

 $
 9,556

 $
 ( 4,415
)

 Weighted average shares outstanding for basic earnings per share

 10,525

 10,684

 11,593

 Dilutive effect of unvested restricted stock awards

 *

 *

 Weighted average shares outstanding for diluted earnings per share

 10,525

 10,838

 11,593

 Basic (loss) / earnings per share

 $
 ( 1.19
)

 $
 0.91

 $
 ( 0.37
)

 Diluted (loss) / earnings per share

 $
 ( 1.19
)

 $
 0.91

 $
 ( 0.37
)

 *
 Due
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.

 NOTE
17 – INCOME TAXES

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

 2025

 2024

 2023

 Current expense

 Federal

 $
 -

 $

 $
 1,024

 Foreign

 State

 -

 Total current expense

 1,322

 Deferred taxes

 Federal

 ( 3,538
)

 2,227

 ( 2,617
)

 State

 ( 464
)

 ( 542
)

 Total deferred taxes

 ( 4,002
)

 2,520

 ( 3,159
)

 Income tax (benefit)/expense

 $
 ( 3,919
)

 $
 2,573

 $
 ( 1,837
)

 Total
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
income.

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

 2025

 2024

 2023

 Income taxes at statutory rate

 21.0
 %

 21.0
 %

 21.0
 %

 Increase (decrease) in tax rate resulting from:

 State taxes, net of federal benefit

 2.0

 1.9

 4.1

 Officer's life insurance

 1.6

 - 1.7

 4.0

 Change in valuation allowance

 0.0

 0.1

 - 0.2

 Other

 - 0.7

 - 0.6

 1.0

 Effective income tax rate

 23.9
 %

 20.7
 %

 29.9
 %

 F- 29

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

 2025

 2024

 Intangible assets

 $
 5,174

 $
 5,590

 Deferred compensation

 1,956

 2,494

 Allowance for bad debts

 1,410

 Employee benefits

 1,008

 Loss and credit carryover

 11,687

 6,655

 Accrued liabilities

 Deferred rent

 Total deferred tax assets

 22,232

 17,517

 Valuation allowance

 ( 229
)

 ( 107
)

 22,003

 17,410

 Liabilities

 Property, plant and equipment

 1,235

 1,710

 Inventories

 4,175

 3,319

 Other

 Total deferred tax liabilities

 5,946

 5,405

 Net deferred tax assets

 $
 16,057

 $
 12,005

 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
deductible.

 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.

 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 2, 2025.

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

 NOTE
18 – 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. 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:

 better
 understand our performance;

 better
 assess our prospects for future net cash flows; and

 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. 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.

 For
financial reporting purposes, we are organized into three 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;

 Home
 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;

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

 All
 Other, consisting of H Contract and BOBO. None of these operating segments were individually
 reportable; therefore, we combined them in "All Other" in accordance with ASC
 280.

 F- 30

 The following table presents segment information
for the periods, and as of the dates indicated. Prior-year information has been recast to reflect the changes in segments discussed above.

 January 29, 2023

 % Net

 % Net

 % Net

 Sales

 Sales

 Sales

 $
 146,470

 36.9
 %

 $
 156,590

 36.1
 %

 $
 205,935

 35.3
 %

 130,816

 32.9
 %

 143,538

 33.1
 %

 216,338

 37.1
 %

 114,216

 28.7
 %

 126,827

 29.3
 %

 156,717

 26.9
 %

 5,963

 1.5
 %

 6,271

 1.4
 %

 4,112

 0.7
 %

 $
 397,465

 %

 $
 433,226

 %

 $
 583,102

 %

 Gross Profit/(Loss)

 $
 45,187

 30.9
 %

 $
 58,387

 37.3
 %

 $
 60,871

 29.6
 %

 25,386

 19.4
 %

 24,367

 17.0
 %

 ( 2,620
)

 - 1.2
 %

 18,289

 16.0
 %

 24,048

 19.0
 %

 32,633

 20.8
 %

 ( 214
)

 - 3.6
 %

 1,890

 30.1
 %

 2,410

 58.6
 %

 $
 88,648

 22.3
 %

 $
 108,692

 25.1
 %

 $
 93,294

 16.0
 %

 Selling and Administrative Expenses

 $
 46,149

 31.5
 %

 $
 40,829

 26.1
 %

 $
 38,840

 18.9
 %

 29,593

 22.6
 %

 28,575

 19.9
 %

 33,215

 15.4
 %

 21,287

 18.6
 %

 20,582

 16.2
 %

 21,584

 13.8
 %

 3,186

 53.4
 %

 2,692

 42.9
 %

 2,176

 52.9
 %

 $
 100,215

 25.2
 %

 $
 92,678

 21.4
 %

 $
 95,815

 16.4
 %

 Trade name impairment

 $
 2,831

 2.2
 %

 $
 -

 0.0
 %

 $

 0.0
 %

 $
 2,831

 0.7
 %

 $
 -

 0.0
 %

 $

 0.0
 %

 Intangible assets amortization

 $
 1,311

 1.0
 %

 $
 1,322

 0.9
 %

 $
 1,334

 0.6
 %

 2,376

 2.1
 %

 2,334

 1.8
 %

 2,178

 1.4
 %

 $
 3,687

 0.9
 %

 $
 3,656

 0.8
 %

 $
 3,512

 0.6
 %

 Operating (Loss) / Income

 $
 ( 962
)

 - 0.7
 %

 $
 17,560

 11.2
 %

 $
 22,030

 10.7
 %

 ( 8,349
)

 - 6.4
 %

 ( 5,530
)

 - 3.9
 %

 ( 37,181
)

 - 17.2
 %

 ( 5,374
)

 - 4.7
 %

 1,131

 0.9
 %

 8,871

 5.7
 %

 ( 3,400
)

 - 57.0
 %

 ( 803
)

 - 12.8
 %

 5.7
 %

 $
 ( 18,085
)

 - 4.6
 %

 $
 12,358

 2.9
 %

 $
 ( 6,046
)

 - 1.0
 %

 Other Income, net

 $
 1,292

 0.9
 %

 $

 0.6
 %

 $
 ( 131
)

 - 0.1
 %

 0.1
 %

 0.5
 %

 0.2
 %

 0.7
 %

 0.0
 %

 0.1
 %

 11.8
 %

 0.2
 %

 -

 0.0
 %

 $
 2,933

 0.7
 %

 $
 1,653

 0.4
 %

 $

 0.1
 %

 Interest expense - Corporate

 $
 1,274

 0.3
 %

 $
 1,573

 0.4
 %

 $

 0.1
 %

 Income taxes - Corporate

 $
 ( 3,919
)

 - 1.0
 %

 $
 2,573

 0.6
 %

 $
 ( 1,837
)

 - 0.3
 %

 Net (loss) / income - Corporate

 $
)

 - 3.1
 %

 $
 9,865

 2.3
 %

 $
)

 - 0.7
 %

 Restructuring costs

 $
 1,406

 1.0
 %

 $
 -

 0.0
 %

 $
 -

 0.0
 %

 0.7
 %

 $
 -

 0.0
 %

 $
 -

 0.0
 %

 0.6
 %

 $
 -

 0.0
 %

 $
 -

 0.0
 %

 2,011

 33.7
 %

 $
 -

 0.0
 %

 $
 -

 0.0
 %

 $
 4,907

 1.2
 %

 $
 -

 0.0
 %

 $
 -

 0.0
 %

 Bad debt related to major customer bankruptcy

 3,084

 2.4
 %

 $
 -

 0.0
 %

 $
 -

 0.0
 %

 $
 3,084

 0.8
 %

 $
 -

 0.0
 %

 $
 -

 0.0
 %

 Capital Expenditures

 $
 1,438

 $
 4,185

 $
 1,813

 1,679

 1,280

 1,514

 1,106

 -

 $
 3,243

 $
 6,815

 $
 4,199

 Depreciation & Amortization

 $
 2,254

 $
 2,268

 $
 2,092

 2,590

 2,689

 2,886

 4,278

 3,972

 3,827

 $
 9,229

 $
 8,956

 $
 8,816

 F- 31

 As
 of February 2,

 As of

 January
 28,

 2025

 %Total

 2024

 %Total

 $
 153,373

 55.4
 %

 $
 168,832

 56.3
 %

 62,338

 22.5
 %

 58,799

 19.6
 %

 58,746

 21.2
 %

 67,230

 22.4
 %

 2,344

 0.8
 %

 5,067

 1.7
 %

 $
 276,801

 %

 $
 299,928

 %

 Goodwill and Intangibles

 37,141

 43,658

 Total
 Consolidated Assets

 $
 313,942

 $
 343,586

 Sales
by product type are as follows:

 Net Sales (in thousands)

 Fiscal

 2025

 2024

 2023

 Casegoods

 $
 239,669

 %

 $
 248,627

 %

 $
 328,849

 %

 Upholstery

 157,796

 %

 184,599

 %

 254,253

 %

 $
 397,465

 %

 $
 433,226

 %

 $
 583,102

 %

 No
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.

 NOTE
19 – COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

 Commitments
and Off-Balance Sheet Arrangements

 We
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.

 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
20 – CONCENTRATIONS OF RISK

 Imported
Products Sourcing

 We
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
or country.

 Factories
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
country.

 Raw
Materials Sourcing for Domestic Upholstery Manufacturing

 Our
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.

 F- 32

 Concentration
of Sales and Accounts Receivable

 One
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.

 NOTE
21 – RELATED PARTY TRANSACTIONS

 We
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. 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
22 – SUBSEQUENT EVENTS

 Cash
Dividend

 On
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.

 Georgia
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.

 F- 33

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