Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Haverty Furniture Companies Inc (HVT, Financial) reported a pretax profit of $6.5 million despite a challenging market environment.
- The company's gross margins remained strong at 60.4%, indicating effective cost management.
- Haverty Furniture Companies Inc (HVT) maintains a solid cash position with over $100 million, allowing for continued investment in growth opportunities.
- The company is expanding its footprint with new store openings in strategic locations, including a second store in Indianapolis and new stores in Florida and Texas.
- The design business segment showed significant growth, increasing over 24% for the quarter, with the average ticket rising to approximately $7,000.
Negative Points
- Total sales for the quarter were $178.6 million, a decrease of 13.4% compared to the previous year.
- Comparable store sales were down 13.6% over the prior year period, reflecting challenges in consumer demand.
- The Memorial Day event was disappointing, impacting the overall quarterly performance.
- The company experienced a decrease in net income to $4.4 million, or $0.27 per diluted share, compared to $11.8 million, or $0.70 per share, in the same quarter last year.
- Higher interest rates and frozen housing activity posed significant challenges, affecting consumer spending and sales trends.
Q & A Highlights
Q: Can you comment on the sales trends throughout the quarter, particularly around Memorial Day?
A: Richard Hare, CFO: In April, our written business was down approximately 14%, May was down 18%, and June was down 8%. Deliveries were down 12% in April, 6% in May, and 20% in June.
Q: How is the new media approach with Carmichael Lynch impacting your strategy?
A: Steven Burdette, President: We started seeing impacts in May. It's too early to tell definitively, but we're seeing positive traffic trends. We're optimistic heading into the third quarter and will continue to monitor and adjust our strategy.
Q: How are recent store openings performing relative to expectations?
A: Steven Burdette, President: The new stores in Southaven, Mississippi, and Destin, Florida, have exceeded expectations. Stores opened last year in Dayton, Ohio, and Concord, North Carolina, are also performing well, with traffic and closing rates improving.
Q: What are your plans for investments in talent and IT?
A: Clarence Smith, CEO: We're enhancing our website to improve customer interaction. In terms of talent, we're supplementing our merchandising team due to retirements and adding creative talent. We're also testing in-store experiences to improve customer engagement.
Q: How are you preparing for potential tariffs on goods from China?
A: Steven Burdette, President: Our exposure to China has decreased to 15%. We have alternative production in countries like Cambodia, Vietnam, and Mexico, so we do not expect significant impact from potential tariffs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
