Havertys Reports Year-End Results

February 20, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on February 2007 Haverty Furniture Cos. posted earnings for the fourth quarter ended Dec. 31 of $3.2 million, compared with $6.8 million reported in the fourth quarter of 2005.

Earnings for the year were $16 million, compared with $15.1 million. Sales for the fourth quarter were $216 million, a 4.2 percent decrease from the comparable quarter last year. Sales for the year increased 3.8 percent to $859.1 million from $827.7 million in 2005. Comparable-store sales in 2006 decreased 6.7 percent for the fourth quarter and increased 1.8 percent for the year.

“Our fourth quarter results were driven by lower sales along with the continuation of our fixed costs at planned levels,” said Clarence H. Smith, president and chief executive office. “Gross profit margins for the quarter were better than the fourth quarter in the prior year and the highest of any 2006 quarter. We attribute this to the strength of our product line-up and our cautious approach to making changes in our pricing and promotional plans.

Smith said SG&A costs increased 3 percent on a dollar basis over the prior year’s quarter but were flat on a sequential basis with the third quarter of 2006. Our payroll costs were greater in the current quarter than in the prior year and advertising expense was also higher as we incurred costs associated with our new marketing campaign.

“Our inventories are up from the 2005 levels which had been admittedly too low to properly serve our customer,” Smith said. “We believe that we have reached a manageable breadth of products and have greatly enhanced our supply chain techniques from a year ago. The current business environment does present challenges to maintain an optimal level of inventory given the long lead times from order placement with our suppliers to receipt of the merchandise. We are actively working with our vendors to have them warehouse more of our products in Asia.”