Haverty Posts $1.4 Million Loss in 2nd Quarter

August 2, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on August 2007 Haverty Furniture Cos. reported a second quarter loss of $1.4 million for the quarter ended June 30 compared to net income of $3.6 million posted in the same quarter of 2006.

Net sales for the quarter just ended were $187.1 million, an 11.3 percent decrease compared to sales of $211 million for the corresponding quarter in 2006. Same-store sales dropped 12.7 percent as previously reported.

For the six-month period, the company lost $520,000, compared to net income of $8.7 million for the same period in 2006.

“Severely weak sales volume early in the quarter created a difficult hurdle for us and produced a quarterly loss,” said Clarence H. Smith, president and chief executive officer. “We had noted in our May and June sales releases that with the double-digit sales declines we would not be profitable. Sales were especially poor in the first half of the quarter but we were heartened by the improvement in volume and return to profitability for June.

“The close management of our merchandise flow and clearance activity resulted in a reduction in inventory of $15.5 million or 13.1 percent as compared to year ago levels,” he said. “The increased clearance sales contributed to a 64 basis point reduction in gross profit margins versus the second quarter last year.”

Smith said the second quarter is typically the weakest of the year for the retailer, adding that he expects the company to return to profitability in the second half “as fixed expenses are leveraged with the seasonally higher sales volume anticipated.”