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Jun 30, 2023
Haverty Furniture Q2 2023 Earnings Report
Havertys' second quarter earnings declined due to decreased sales, but gross profit margin improved.
Key Takeaways
Havertys reported a decrease in consolidated sales by 18.5% to $206.3 million, with comparable-store sales down 19.1%. Diluted earnings per share decreased to $0.70 from $1.27 year-over-year. However, gross profit margin increased to 60.5% from 57.9%. The company is also planning to open four new locations in the first half of 2024.
Diluted earnings per share decreased to $0.70 compared to $1.27 in the same quarter last year.
Consolidated sales decreased by 18.5% to $206.3 million.
Comparable-store sales declined by 19.1%.
Gross profit margin increased to 60.5% from 57.9%.
Forward Guidance
Havertys expects gross profit margins for 2023 to be between 59.5% and 60.0%. Fixed and discretionary expenses within SG&A for the full year are expected to be in the $286.0 to $289.0 million range. The effective tax rate for 2023 is expected to be 25%. Planned capital expenditures for the full year are approximately $57.0 million and retail square footage is expected to increase approximately 1.6% in 2023.
Positive Outlook
- Gross profit margins are expected to remain strong for the rest of the year.
- Fixed and discretionary expenses within SG&A are expected to be lower than previous guidance.
- The company anticipates opening four stores and closing one during the year, leading to an increase in retail square footage.
- Company has no debt outstanding at June 30, 2023 and credit availability of $80.0 million.
- The change in the LIFO reserve generated a positive impact on gross profit of $3.4 million compared to a negative impact of $2.5 million in 2022.
Challenges Ahead
- Gross profit margins fluctuate quarter to quarter in relation to promotional cadence.
- The impact of inflation and rising interest rates have caused some consumers to pull back on discretionary home related spending.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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