Haverty Furn Cl A Sc (($HVT.A)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Haverty Furn Cl A Sc painted a generally positive picture, highlighting robust sales growth and strategic expansions. Despite the optimism, the company acknowledged challenges such as increased expenses and tariff issues, which slightly dampened the overall sentiment.
Increased Sales and Comparable Store Sales
The third quarter saw a significant boost in sales, reaching $194.5 million, marking a 10.6% increase year-over-year. Comparable store sales also rose by 7.1%, reflecting the company’s strong market performance.
Successful Labor Day Event
Haverty’s Labor Day event emerged as the largest of the year, with a 13.6% increase over the previous year. This success was driven by strong metrics in both traffic and average ticket size, underscoring effective promotional strategies.
Strong Design Business
The design business segment contributed significantly, accounting for 34.2% of total sales. This was fueled by a 7.1% increase in upholstery special orders, highlighting the growing demand for customized furniture solutions.
Store Expansion Plans
Haverty’s expansion strategy includes the opening of a new store in Houston, with plans for four additional stores by 2026. This move is aimed at increasing market presence and capturing new customer segments.
Debt-Free Balance Sheet
The company ended the quarter with a robust financial position, holding $130.5 million in cash and no funded debt, which provides a strong foundation for future investments and growth.
Decreased Operating Margin
Despite the positive sales figures, the operating margin decreased to 3.3% from 3.9% in Q3 2024, indicating pressure on profitability.
Impact of Tariffs
New tariffs on upholstered wood products from several countries posed challenges, necessitating strategic price adjustments to maintain margins.
Increased SG&A Expenses
SG&A expenses rose by 11.3% to $112.3 million, primarily due to higher advertising and administrative costs, reflecting the company’s investment in growth initiatives.
Slight Decrease in EPS
Earnings per share saw a slight decrease to $0.28 from $0.29 in the previous year, reflecting the impact of increased expenses and tariff challenges.
Forward-Looking Guidance
Looking ahead, Haverty’s anticipates maintaining strong gross margins between 60.4% and 60.7% for the remainder of 2025. The company plans to manage fixed SG&A costs within the range of $296-$298 million and invest $24 million in capital expenditures. Despite challenges like high interest rates and tariffs, Haverty’s remains optimistic, buoyed by spending from customers with household incomes over $150,000.
In summary, Haverty Furn Cl A Sc’s earnings call highlighted a positive trajectory with strong sales growth and strategic expansions. While challenges such as increased expenses and tariffs were noted, the company’s robust financial position and forward-looking strategies suggest a resilient outlook.