As discussed in today's Residential Furniture Industry Update research note, we recently met with HOFT's senior management at the High Point Furniture Market in High Point, NC. On a more positive note, we continue to expect the upcoming launch of Margaritaville licensed products to serve as a meaningful revenue driver beginning in 2H:F27. We also note that the opening of a new warehouse in Vietnam has resulted in working capital savings and overall improved inventory management. In addition, the company's restructuring efforts removed $26 million of annual costs (mainly to the sale of nearly the entire former Home Meridian segment), thus resulting in a streamlined and higher-margin brand portfolio. That said, we are concerned by record low consumer confidence and increased fuel prices since the Iran conflict began in late February (which not only could lead to lower demand but higher transportation costs). As such, given tempered revenue and operating margin forecasts, we reduce our F2027 EPS estimate by a dime to $0.60. Our moderate risk rating on HOFT factors in our expectation of an earnings rebound in F2027 and expected free cash flow generation.