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Sep 30, 2020
Haverty Furniture Q3 2020 Earnings Report
Reported an increase in sales and key financial metrics compared to the same period last year.
Key Takeaways
Havertys reported a strong third quarter with significant increases in sales and EPS. Sales rose by 3.9%, and EPS increased to $0.97 compared to $0.31 in the same period last year. The company benefited from a surge in demand for home furnishings, though it faced supply chain challenges.
EPS increased to $0.97 compared to $0.31 in the same period last year.
Sales rose by 3.9% and comparable store sales increased 4.0%.
Gross profit margins increased to 56.2% from 53.5% in the same period of 2019.
SG&A expenses decreased by $4.1 million compared to the same period in 2019.
Forward Guidance
Havertys expects gross profit margins for the fourth quarter of 2020 to be comparable to the third quarter of 2020. The company estimates fixed and discretionary type SG&A expenses for the fourth quarter of 2020 to be in the $67.0 to $69.0 million range.
Positive Outlook
- Gross profit margins are expected to be comparable to the third quarter 2020 level.
- Variable type costs within SG&A are expected to decrease to 17.8% compared to 18.2% in the same period of 2019.
- Expects to open a location in Myrtle Beach, SC in early March 2021.
- Company has resources to capitalize on the changing retail landscape.
- Vendor relationships and system capabilities provide a competitive advantage.
Challenges Ahead
- Surge in demand and impact of coronavirus on production has generated supply chain challenges.
- Cannot predict the duration of this dynamic business shift or its long-term impact on our industry.
- Potential problems with inventory availability.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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