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From Home Furnishing Business

HAVERTYS Reports First Quarter Operating Results

May 3, 2023  by HFBusiness Staff in Business Strategy, Industry   

First quarter 2023 versus first quarter 2022:
~ Diluted earnings per common share ("EPS") of $0.74 versus $1.11.
~ Consolidated sales decreased 5.9% to $224.8 million. Comparable-store sales decreased 6.7%.
~ Gross profit margin increased to 59.1% from 59.0%.

Clarence H. Smith, chairman and CEO, said, "Our team delivered a strong quarter against difficult headwinds of shifts in consumer spending and persistent inflationary pressures. Sales reflect the reduction in traffic and written business that we have reported in recent quarters as our business transitioned from the pandemic's explosive pace to a more measured one.”

“Our written business for the first quarter of 2023 compared to the "normal" pre-pandemic first quarter of 2019 was up 10.9% and written comp-store sales were up 6.9%. Our first quarter's average sales ticket was up over last year’s, and the sales generated by our free in-home design service exceeded 25% of total sales.”

“We are receiving new products, which were delayed during the pandemic, addressing a key part of our merchandise plan. We remain disciplined in our pricing and protective of the gross profit margin gains we have steadily achieved.”

“Operationally, our experienced leaders are focused on ensuring we are efficiently meeting our objectives. Our financial strength allows us to capitalize during weak cycles, making investments and executing on our growth strategy with the addition of new stores and improving the shopping experience in-store and online. We are adapting and evolving to stay ahead and grow in a changing retail and economic landscape."

First Quarter ended March 31 Compared to Same Period of 2022
~ Total sales down 5.9%, comp-store sales down 6.7% for the quarter. Total written sales were down 11.7% and written comp-store sales declined 12.7% for the quarter.
~ Gross profit margins increased to 59.1% in 2023 from 59.0% in 2022.
~ SG&A expenses were 52.7% of sales versus 48.2% and increased $3.2 million. The primary drivers of this change are; (increase of $1.4 million in selling expenses due to the impact of rising interest rates on third-party credit costs partially offset by lower commissioned-based compensation expense)
~ increase of $2.0 million in occupancy costs driven by higher maintenance and tax costs.
~ increase in administrative expense of $1.3 million primarily from higher health insurance costs and professional services.
~ decrease in warehouse and delivery costs of $1.4 million primarily from $0.9 million lower demurrage fees and a reduction in usage of temporary labor.