Havertys Reports Operating Results for First Quarter 2025

Rhea-AI Summary

Havertys reported its Q1 2025 results with mixed performance indicators. The furniture retailer saw a 1.3% decrease in consolidated sales to $181.6 million, while comparable store sales declined 4.8%. Despite these challenges, the company improved its gross profit margin to 61.2% from 60.3% year-over-year.

Notable financial highlights include:

• Diluted EPS increased to $0.23 from $0.14
• Generated $6.2 million in operating cash flow
• Maintained strong liquidity with $118.3 million in cash and no debt
• Returned $7.2 million to shareholders through dividends and share repurchases

CEO Steven G. Burdette acknowledged challenges including weak housing market, winter weather impacts, and trade policy changes. The company maintained its 2025 guidance with expected gross margins between 60.0-60.5% and planned capital expenditures of $24.0 million, while anticipating a 2.0% increase in retail square footage.

Positive

• EPS increased 64% to $0.23 vs $0.14 year-over-year
• Gross profit margin improved to 61.2% from 60.3%
• SG&A expenses decreased by $2.2M with improved cost control
• Strong cash position with $118.3M and no debt
• Generated $6.2M in operating cash flow
• Design consultant sales contribution increased to 33.2% from 32.4%
• Average ticket value increased to $3,314 from $3,195

Negative

• Consolidated sales decreased 1.3% to $181.6M
• Comparable store sales declined 4.8%
• Total written business down 2.6%
• Comp-store written business declined 6.3%
• Sales per square foot decreased to $162 from $169
• Occupancy costs increased $1.6M due to new locations
• Administrative expenses increased $1.0M from higher salaries

Insights

Retail Financial Analyst

Havertys showed mixed Q1 results with 64% EPS growth despite sales declines, demonstrating effective cost management amid retail headwinds.

Havertys presents a contradictory financial picture in Q1. While diluted EPS surged 64% to $0.23 (versus $0.14 last year), this profitability improvement comes against declining sales metrics – consolidated sales dropped 1.3% to $181.6 million, with comparable store sales falling a concerning 4.8%.

The company's gross profit margin improved to 61.2% from 60.3%, indicating strong pricing discipline and inventory management. Simultaneously, SG&A expenses decreased $2.2 million to 59.0% of sales, with notable reductions in selling expenses ($2.0 million), warehouse/delivery costs ($1.7 million), and advertising ($1.1 million).

The concerning forward indicator is written business (orders written but not yet delivered), which declined 2.6% overall and 6.3% on a comp-store basis – suggesting continued sales challenges ahead. This explains management's cautious approach, including reducing planned 2025 capital expenditures by $3 million to $24 million due to tariff uncertainty.

Havertys maintains exceptional financial stability with $118.3 million in cash, zero debt, and $80 million in credit availability. The company generated $6.2 million in operating cash flow and returned $7.2 million to shareholders through dividends ($5.2 million) and share repurchases ($2.0 million).

While effectively managing costs in a challenging retail environment, the persistent sales decline presents a fundamental growth concern that offsets the impressive profit gains.

Supply Chain Economist

Havertys demonstrates effective cost navigation amid retail headwinds, but declining sales and reduced investment signals caution in uncertain trade environment.

Havertys' Q1 results reveal the complex balancing act furniture retailers face in the current economic landscape. Management explicitly cited multiple external pressures—weak housing market, atypical southern weather, low consumer confidence, and most significantly, "significant shifts in trade policy" as key challenges.

The company's strategic response to these headwinds is evident in their operational adjustments. The $3 million reduction in planned 2025 capital expenditures (now $24 million) directly attributed to "tariff uncertainty" demonstrates how trade policy volatility is constraining investment decisions. Their guidance specifically excludes "additional proposed tariffs that have been paused," highlighting substantial uncertainty in their cost structure.

On the inventory front, Havertys has maintained disciplined management despite supply chain complications. The modest $5.3 million increase in inventories during Q1 (ending at $88.7 million) appears strategically appropriate given their sales volume. This controlled inventory position provides flexibility to adapt to changing trade conditions.

The improvement in gross margins to 61.2% (up from 60.3%) demonstrates effective cost management and pricing strategies despite the challenging environment. However, the significant decline in written business (6.3% drop in comp-store written sales) suggests sustained demand weakness that could create inventory imbalances if not carefully monitored.

While Havertys' 140-year experience "navigating changes in U.S. economic policy" provides valuable institutional knowledge, the current retail environment presents unique challenges requiring continued operational agility and financial discipline.

ATLANTA, GA / ACCESS Newswire / April 30, 2025 / HAVERTYS (NYSE:HVT)(NYSE:HVT.A) today reported operating results for the first quarter ended March 31, 2025.

First quarter 2025 versus first quarter 2024:

• Diluted earnings per common share ("EPS") of $0.23 versus $0.14.

• Consolidated sales decreased 1.3% to $181.6 million. Comparable store sales decreased 4.8%.

• Gross profit margin was 61.2% compared to 60.3%.

Steven G. Burdette, President and CEO said, "We are pleased to report solid first quarter results with improved gross margins, earnings, and expense control, despite facing several headwinds, including a weak housing market, atypical winter weather in the South, low consumer confidence, and significant shifts in trade policy.

Throughout our 140-year history, we have consistently demonstrated resilience in navigating changes in U.S. economic policy. This experience, along with our solid balance sheet, has equipped us to effectively manage the dynamic U.S. trade policy environment while continuing to serve our customers and deliver value to our shareholders."

First Quarter ended March 31, 2025 Compared to Same Period of 2024

• Total sales down 1.3%, comp-store sales down 4.8% for the quarter. Total written business was down 2.6% and comp-store written business declined 6.3% for the quarter.

• Design consultants accounted for 33.2% of written business in 2025 and 32.4% in 2024.

• Gross profit margins increased to 61.2% in 2025 from 60.3% in 2024.

• SG&A expenses were 59.0% of sales versus 59.4% and decreased $2.2 million. The primary drivers of this change are:

  • decrease of $2.0 million in selling expenses as these are predominantly variable costs tied to commissioned-based compensation expense and third-party creditor costs.

  • decrease in warehouse and delivery costs of $1.7 million driven by lower salaries and related benefit costs.

  • decrease in advertising costs of $1.1 million aligning with the reduction of sales.

  • increase in occupancy costs of $1.6 million largely due to costs related to new locations.

  • increase in administrative expenses of $1.0 million primarily from increased salaries and stock compensation costs.

Balance Sheet and Cash Flow for the Three Months Ended March 31, 2025

• Cash, cash equivalents, and restricted cash equivalents at March 31, 2025 are $118.3 million.

• Generated $6.2 million in cash from operating activities primarily from earnings and changes in working capital including a $5.3 million increase in inventories, $2.0 million increase in customer deposits, and a $4.5 million decrease in accrued liabilities and vendor repayments.

• Invested $6.1 million in capital expenditures.

• Purchased approximately 94,000 shares of common stock for $2.0 million.

• Paid $5.2 million in quarterly cash dividends.

• No debt outstanding at March 31, 2025, and credit availability of $80.0 million.

Expectations and Other

• Our 2025 guidance includes tariffs currently in effect as of April 30, 2025, but excludes the effects of additional proposed tariffs that have been paused by the Trump Administration. We are closely monitoring the tariff negotiations and evaluating the impact to minimize the effects on our business.

• Our expectations for gross profit margins for 2025 are unchanged from our prior guidance and are between 60.0% to 60.5%. Gross profit margins fluctuate quarter to quarter in relation to our promotional cadence.

• Fixed and discretionary expenses within SG&A for the full year of 2025 are expected to be in the $291.0 to $293.0 million range, unchanged from our previous guidance. Variable SG&A expenses for the full year of 2025 are anticipated to be in the 18.6% to 19.0% range, a decrease from our previous guidance driven by lower warehouse and delivery costs and third-party credit expense.

• Our effective tax rate for 2025 is expected to be 26.5%, excluding the impact from discrete items and any new tax legislation.

• Planned capital expenditures for the full year of 2025 are approximately $24.0 million, a $3 million decrease from our previous guidance due to tariff uncertainty. We expect retail square footage will increase approximately 2.0% in 2025 over 2024.

Key Results
(amounts in millions, except per share amounts)

Results of Operations
		Three Months Ended March 31,
		2025				2024
Sales		$	181.6			$	184.0
Gross Profit			111.1				111.0
Gross profit as a % of sales			61.2				60.3
SGA
Variable			33.6				37.0
Fixed			73.6				72.4
Total			107.2				109.4
SGA as a % of sales
Variable			18.5				20.1
Fixed			40.5				39.3
Total			59.0				59.4
Pre-tax income			5.3				3.2
Pre-tax income as a % of sales			2.9				1.7
Net income			3.8				2.4
Net income as a % of sales			2.1				1.3
Diluted earnings per share ("EPS")		$	0.23			$	0.14

Other Financial and Operations Data

		Three Months Ended March 31,
		2025				2024
EBITDA (in millions)(1)		$	9.9			$	6.6
Sales per square foot		$	162			$	169
Average ticket		$	3,314			$	3,195

Liquidity Measures

		Three Months Ended March 31,										Three Months Ended March 31,
Free Cash Flow		2025				2024				Cash Returns to Shareholders		2025				2024
Operating cash flow		$	6.2			$	3.1			Share repurchases		$	2.0			$	-
										Dividends			5.2				4.8
Capital expenditures			(6.1	)			(6.4	)		Cash returns to shareholders		$	7.2			$	4.8
Free cash flow		$	0.1			$	(3.3	)
Cash at period end		$	118.3			$	117.9

(1)

See the reconciliation of the non-GAAP metrics at the end of the release.

HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

		Three Months Ended March 31,
(In thousands, except per share data)		2025				2024
Net sales		$	181,567			$	183,997
Cost of goods sold (exclusive of depreciation and amortization)			70,484				72,978
Gross profit			111,083				111,019
Expenses:
Selling, general and administrative			107,202				109,356
Other (income) expense, net			(158	)			23
Total expenses			107,044				109,379
Income before interest and income taxes			4,039				1,640
Interest income, net			1,254				1,555
Income before income taxes			5,293				3,195
Income tax expense			1,515				802
Net income		$	3,778			$	2,393
Basic earnings per share:
Common Stock		$	0.24			$	0.15
Class A Common Stock		$	0.21			$	0.13
Diluted earnings per share:
Common Stock		$	0.23			$	0.14
Class A Common Stock		$	0.21			$	0.13
Cash dividends per share:
Common Stock		$	0.32			$	0.30
Class A Common Stock		$	0.30			$	0.28

HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In thousands)		March 31, 2025				December 31, 2024				March 31, 2024
Assets
Current assets
Cash and cash equivalents		$	111,941			$	120,034			$	111,818
Restricted cash and cash equivalents			6,347				6,280				6,045
Inventories			88,704				83,419				92,078
Prepaid expenses			12,025				14,576				17,361
Other current assets			13,722				14,587				13,697
Total current assets			232,739				238,896				240,999
Property and equipment, net			182,002				182,622				173,128
Right-of-use lease assets			193,928				194,411				196,976
Deferred income taxes			18,001				17,075				15,594
Other assets			16,020				15,743				13,832
Total assets		$	642,690			$	648,747			$	640,529
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable		$	16,850			$	14,914			$	16,980
Customer deposits			42,760				40,733				40,912
Accrued liabilities			32,361				39,635				35,681
Current lease liabilities			36,676				36,283				37,572
Total current liabilities			128,647				131,565				131,145
Noncurrent lease liabilities			181,065				182,096				174,680
Other liabilities			27,617				27,525				28,014
Total liabilities			337,329				341,186				333,839
Stockholders' equity			305,361				307,561				306,690
Total liabilities and stockholders' equity		$	642,690			$	648,747			$	640,529

HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

(In thousands)		Three Months Ended March 31,
		2025				2024
Cash Flows from Operating Activities:
Net income		$	3,778			$	2,393
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			5,895				4,946
Share-based compensation expense			2,080				2,643
Other			(924	)			58
Changes in operating assets and liabilities:
Inventories			(5,285	)			1,878
Customer deposits			2,027				5,075
Other assets and liabilities			3,124				(1,104	)
Accounts payable and accrued liabilities			(4,541	)			(12,754	)
Net cash provided by operating activities			6,154				3,135
Cash Flows from Investing Activities:
Capital expenditures			(6,127	)			(6,399	)
Proceeds from sale of land, property and equipment			5				48
Net cash used in investing activities			(6,122	)			(6,351	)
Cash Flows from Financing Activities:
Dividends paid			(5,173	)			(4,845	)
Common stock repurchased			(2,000	)			-
Taxes on vested restricted shares			(885	)			(1,853	)
Net cash used in financing activities			(8,058	)			(6,698	)
Decrease in cash, cash equivalents, and restricted cash equivalents during the period			(8,026	)			(9,914	)
Cash, cash equivalents, and restricted cash equivalents at beginning of period			126,314				127,777
Cash, cash equivalents, and restricted cash equivalents at end of period		$	118,288			$	117,863

GAAP to Non-GAAP Reconciliation

We report our financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). We supplement the reporting of our financial information under GAAP with certain non-GAAP financial information. The non-GAAP information presented provides additional useful information but should not be considered in isolation or as substitutes for the related GAAP measures. We believe that EBITDA is a meaningful measure to share with investors.

Reconciliation of GAAP measures to EBITDA

		Three Months Ended March 31,
(in thousands)		2025				2024
Income before income taxes, as reported		$	5,293			$	3,195
Interest income, net			(1,254	)			(1,555	)
Depreciation and amortization			5,895				4,946
EBITDA		$	9,934			$	6,586

Comparable Store Sales 

Comparable-store or "comp-store" sales is a measure which indicates the performance of our existing stores and website by comparing the sales growth for stores and online for a particular month over the corresponding month in the prior year. Stores are considered non-comparable if they were not open during the corresponding month or if the selling square footage has been changed significantly.

Cost of Goods Sold and SG&A Expense 

We include substantially all our occupancy and home delivery costs in SG&A expense as well as a portion of our warehousing expenses.  Accordingly, our gross profit may not be comparable to those entities that include these costs in cost of goods sold. 

We classify our SG&A expenses as either variable or fixed and discretionary.  Our variable expenses are comprised of selling and delivery costs.  Selling expenses are primarily compensation and related benefits for our commission-based sales associates, the discount we pay for third party financing of customer sales and transaction fees for credit card usage.  We do not outsource delivery, so these costs include personnel, fuel, and other expenses related to this function.  Fixed and discretionary expenses are comprised of rent, depreciation and amortization and other occupancy costs for stores, warehouses and offices, and all advertising and administrative costs. 

Conference Call Information

The company invites interested parties to listen to the live webcast of the conference call on May 1, 2025 at 10:00 a.m. ET at its website, ir.havertys.com. If you cannot listen live, a replay will be available on the day of the conference call at the website at approximately 1:00 p.m. ET.

About Havertys

Havertys (NYSE: HVT and HVT.A), established in 1885, is a full-service home furnishings retailer with 130 showrooms in 17 states in the Southern and Midwestern regions providing its customers with a wide selection of quality merchandise in middle to upper-middle price ranges. Additional information is available on the Company's website havertys.com. 

Safe Harbor

This press release contains, and the conference call may contain forward-looking statements subject to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These forward-looking statements are subject to risks and uncertainties and change based on various important factors, many of which are beyond our control.

All statements in the future tense and all statements accompanied by words such as "expect," "likely," "outlook," "forecast," "preliminary," "would," "could," "should," "position," "will," "project," "intend," "plan," "on track," "anticipate," "to come," "may," "possible," "assume," and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, our expectations for retail and operating margins, selling square footage and capital expenditures for 2025, our liquidity position to continue to fund our growth plans, and our efforts and initiatives to execute our strategic plan.

We caution that our forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information you are cautioned not to place undue reliance on our forward-looking statements, and they should not be relied upon as a prediction of actual results. Factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements include but are not limited to: competition from national, regional and local retailers of home furnishings; our ability to anticipate changes in consumer preferences; our ability to successfully implement our growth and other strategies; our ability to maintain and enhance our brand; importing merchandise from foreign sources; fluctuations and volatility in the cost of raw materials and components; our dependence on third-party producers to meet our requirements; our vendors' ability to meet our quality control standards or comply with changes to the legislative or regulatory framework regarding product safety; risks in our supply chain, including price, availability and quality of raw materials and components utilized in the products we sell and our ability to forecast our supply chain needs; our reliance on third-party transportation vendors for product shipments from our suppliers; the effects of labor disruptions or labor shortages; and our ability to attract and retain key employees; the rise of oil and gasoline prices; increased transportation costs; damage to one of our distribution centers; the vulnerability of our information technology infrastructure to cyber-attacks, breaches and other disruptions; changes in general domestic and international economic conditions such as inflation rates, interest rates, tax rates, unemployment rates, higher labor and healthcare costs, recessions, and changing government policies, laws and regulations; pending or unforeseen litigation; as well as other risks and uncertainties discussed in the Company's Annual Report on Form 10-K for 2024 and from time to time in the Company's subsequent filings with the SEC.

Forward-looking statements describe our expectations only as of the date they are made, and the Company undertakes no duty to update its forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent Forms 10-K, 10-Q, 8-K, and other reports filed with the SEC. 

Contact:

Havertys 404-443-2900
Tiffany Hinkle
AVP, Financial Reporting
investor.relations@havertys.com

SOURCE: Haverty Furniture Companies, Inc.

View the original press release on ACCESS Newswire

FAQ

How did Havertys (HVT) perform in Q1 2025 compared to Q1 2024?

Havertys improved its earnings with EPS rising to $0.23 from $0.14, despite a 1.3% decrease in sales to $181.6M. Gross profit margin increased to 61.2% from 60.3%, while comparable store sales decreased by 4.8%.

What is Havertys (HVT) cash position and dividend status in Q1 2025?

As of March 31, 2025, Havertys had $118.3M in cash with no debt and $80M in credit availability. The company paid $5.2M in quarterly cash dividends and maintained a strong balance sheet.

How much stock did Havertys (HVT) repurchase in Q1 2025?

Havertys purchased approximately 94,000 shares of common stock for $2.0 million during the first quarter of 2025.

What are Havertys (HVT) gross profit margin expectations for 2025?

Havertys expects gross profit margins for 2025 to be between 60.0% to 60.5%, unchanged from their prior guidance, with quarterly fluctuations based on promotional activities.

What challenges did Havertys (HVT) face in Q1 2025?

Havertys faced headwinds including a weak housing market, atypical winter weather in the South, low consumer confidence, and significant shifts in trade policy during Q1 2025.