Havertys Reports Results for Third Quarter 2008

November 5, 2008  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on November 2008 Haverty Furniture Cos., Atlanta, announced on Wednesday a third-quarter 2008 loss of $1.5 million on net sales of $175.6 million. For the same period in 2007, Havertys earned $643,000 on sales of $200.7 million.

Comparable-store sales declined 14.9 percent for third-quarter 2008 compared with the same period last year.

For the nine months ended September 30, Havertys lost $2.8 million versus net income of $123,000 for the same period in 2007.

Clarence H. Smith, president and chief executive officer, said, “We have seen more deterioration in consumer spending for big-ticket purchases and the current outlook for the near term continues to be difficult. Our strategy to maintain a strong balance sheet and contain costs has proven to be particularly prudent. Subsequent to the end of the third quarter, all of our borrowings were repaid and we are closely managing our inventories. During the third quarter, we continued to adjust all aspects of our operations to business conditions and reduced our SG&A costs while improving our gross margins.”

Smith said Havertys is analyzing all fixed costs for additional reductions; and that the company is evaluating locations with leases reaching renewal for potential renegotiations of option terms or possible closures.

“Inventory levels are currently lower than those throughout the first half of the year. We no longer offer in-house free financing greater than one year and accounts receivable balances have continued to come down and serve as a source of cash,” Smith said. “In early October we made the final scheduled payments on two unsecured notes and prepaid the remaining obligations associated with certain properties. Our capital expenditure plans are being curtailed as we spend on normal store maintenance but forego any additional new store activity. We expect to close on a $7 million sale-leaseback of one of our stores during the fourth quarter.”

Written business to date in the fourth quarter is down around 23 percent compared with last year.

“We cannot predict the depth or length of the current negative business cycle,” Smith said. “Our attention is on tightly managing our business during this period, gaining market share from weaker and defunct competitors, and emerging from this historic down cycle as the most prominent furniture retailer in our markets.”

Havertys has 123 showrooms in 17 states in the Southern and Midwestern regions.