Release Date: October 31, 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) is expanding its store footprint, with plans to open three additional stores by the end of the year, including a return to the Houston market after 43 years.
- The company is investing in store growth in key regions, positioning itself strongly in some of the best markets in the country for future growth.
- Haverty Furniture Companies Inc (HVT) has a strong cash position, ending the quarter with $121.2 million in cash and cash equivalents and no funded debt.
- The company's design business is thriving, growing over 19% for the quarter, with an increase in average ticket size.
- Despite a challenging sales environment, Haverty Furniture Companies Inc (HVT) maintains strong margins and controlled expenses, with inventories balanced and a focus on productivity and execution.
Negative Points
- Consolidated sales for the third quarter were down 20.2% from the previous year, with comparable store sales also down 20.5%.
- Earnings per share significantly decreased to $0.29 from $1.02 in the same quarter last year.
- The company faced disruptions due to two hurricanes, which caused store closures and impacted sales and operations in affected regions.
- High interest rates and an unaffordable housing market continue to pose challenges, contributing to a cautious consumer environment.
- Gross profit margin decreased by 60 basis points, driven by changes in the LIFO reserve, impacting overall profitability.
Q & A Highlights
Q: Can you discuss the impact of the hurricanes on housing and how it might affect demand in the long term?
A: Steven Burdette, President: We expect demand to increase, likely three to six months out. The hurricanes affected different areas, with Helene impacting Georgia and North Florida, and Milton affecting Tampa, Orlando, and Fort Myers. We anticipate a quicker recovery in Florida, leading to a potential lift in demand.
Q: With the weak consumer environment, how does this affect your plan for store openings?
A: Clarence Smith, CEO: We are maintaining our plan to open five stores annually, possibly six next year. Our focus is on expanding in Houston, which remains a priority despite the current consumer challenges.
Q: Can you provide insights into monthly sales trends and any regional differences?
A: Richard Hare, CFO: Written business was consistent, with slight variations across months. Deliveries were impacted by storms, particularly in September. Regionally, the Midwest and central districts performed better, while Florida and the West underperformed due to storm disruptions.
Q: What are your plans for inventory management given recent reductions?
A: Steven Burdette, President: We don't anticipate further inventory reductions. Our levels are stable, and while new store openings may cause slight increases, we aim for consistency and efficient inventory flow.
Q: How has the change in media buyers affected your marketing strategy and traffic?
A: Steven Burdette, President: We're pleased with the results since changing media buyers in April. Traffic has gradually improved, and we continue to focus on digital, broadcast, and social media strategies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
