{"url_path":"/sec/hoft/10-q/2026/item-3","section_key":"item-3","section_title":"Item 3 Quantitative and Qualitative Disclosures","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-06-12","source_url":"https://www.sec.gov/Archives/edgar/data/1077688/0001185185-26-002495-index.html","accession_number":"0001185185-26-002495","cik":"0001077688","ticker":"HOFT","issuer_name":"HOOKER FURNISHINGS Corp","edgar_url":"https://www.sec.gov/Archives/edgar/data/1077688/0001185185-26-002495-index.html","primary_entity_key":"0001077688","primary_entity_name":"HOOKER FURNISHINGS Corp"},"word_count":389,"has_tables":true,"body_markdown":"**Item 3. Quantitative and Qualitative Disclosures\nAbout Market Risk**\n\n** **\n\nWe are exposed to various types of market risk\nin the normal course of our business, including the impact of interest rate changes, raw materials price risk and changes in foreign currency\nexchange rates, which could impact our results of operations or financial condition. We manage our exposure to this risk through our normal\noperating activities.\n\n \n\n**Interest Rate Risk**\n\n** **\n\nBorrowings under the Amended and Restated Loan\nAgreement 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\nmargin 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\nchanges in interest rates. As of May 3, 2026, there were no outstanding loans, other than amounts reserved for standby letters of credit\nin the amount of $3.2 million.\n\n \n\n**Raw Materials Price Risk**\n\n \n\nWe are exposed to market risk from changes in\nthe cost of raw materials used in our domestic upholstery manufacturing processes; principally, wood, fabric, and foam products. Increases\nin home construction activity could result in increases in wood and fabric costs. Additionally, the cost of petroleum-based foam products\nwe utilize are sensitive to crude oil prices, which vary due to supply, demand, and geo-political factors.\n\n \n\n**Currency Risk**\n\n \n\nFor imported products, we generally negotiate\nfirm pricing denominated in U.S. Dollars with our foreign suppliers, typically for periods of at least one year. We accept the exposure\nto exchange rate movements beyond these negotiated periods. We do not use derivative financial instruments to manage this risk but could\nchoose to do so in the future. Most of our imports are purchased from suppliers located in Vietnam and China. The Chinese\ncurrency floats within a limited range in relation to the U.S. Dollar, resulting in exposure to foreign currency exchange rate fluctuations.\n\n \n\nSince we transact our imported product purchases\nin 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\nperiods. We generally expect to reflect substantially all of the effect of any price increases from suppliers in the prices we charge\nfor imported products. However, these changes could adversely impact sales volume or profit margins during affected periods."}