HVT - Earnings call transcript Q3 2020 | Haverty Furniture Companies, Inc.

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Operator

Good day, and welcome to the Haverty's Third Quarter 2020 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Richard Hare, Chief Financial Officer. Please go ahead sir.

Richard Hare

operator. you, Thank

speak Exchange call, to conference materially we forward-looking which obligation statements, the statements, those and conditions are and date During update and made and we'll uncertainties. subject which such the other in detailed risks or differ in to which as Actual reports are the made they this implied make only results or could filed that Securities from competitive Factors undertake economic results actual and no company's with cause to publicly revise. Commission. differ include uncertainties may

Chief and our now results President, business. Clarence on give commentary provide Smith about our Our will Executive Officer and update you an Chairman,

Clarence Smith

Good you morning. our third Thank joining for quarter call. conference

all their dollars of per expense margins delivered with of $X.XX to so up our lower the We're year. last compared benefiting much up quarterly spending advertising improving and their sales As nesting least a home, in contributing per X.X% are sales comparable significantly categories. home The we very where almost are written of the years. body comparable X% share place SG&A many operating largest $X.XX X.X share they're with to XX.X%, and increase where from earnings our We the on and XX and lower $XX.X had of customers major at time. net profit gross earlier, were cost lower. record factors focusing pleased store million report strong across been strong We've reported economy X.X%

the and SG&A our distribution, higher mix increased most to pressure holding cost a order gross coming markdowns, special and we're in improvement discounting categories. margin due The quarters products. to committed our was to in less seeing warehouse of and of cost are we fewer While personnel

improving job margins this believe stores continue. merchants will excellent and an done our trend Our in gross have we and

income objective in pretax key maintain the quarters high to operating single-digit ahead. have We a

During customers. seen of increasing to the we've pandemic, importance convenience our this

of website Our of internet is over media sales digital triple are Buy XX%. reach a improving currently dedicated X.X% ease Pickup investing over and to Store of wants. to interact and XX%, anyway the We're highest Online store targeted and our efficiency at it as our the up she the social customers. running sales use up at our to possible customers past years. increasing and use making producing best as us easy with of for We're in

been triple began of Our has recent never a since what This call driver achieved measuring. we our I double. business is

and traffic triple However, weekends rate X months, in double-digit several periods we've over closing increase a of in ticket. a average the and past double experienced

basketball, digital sales that our with While that combined markets our across our some very larger We've markets. our and growth potential. excellent helping We the state-of-the-art emphasis on is of come We of highly technology our in It's allows in we seen. that this very and believe the a in on, trends foundation strong unusual XXX product home better especially is that performance times. provide that difficult delivery strong we've rely is it's in the believe powerful deployed supply business the to with position our online reliable accurate or big in-store relationships customers kicking our regions in true horses with as for see of our in suppliers. have customers growth visibility balanced seen information strong indicator and Haverty's with it better rewarding most from virtual H helps some combination in for the a operating than in create growth. and feel higher to well being and a today's We we with country personal touch positioned Haverty's our for with strongest In of operating their brand. strong especially customers competition Design that excellent because teams. world, of our system vision and believe Unified whether we're to strong able strong a we're systems chain the of the trust our our of years

However, retailers. our inevitable that believe we and has changes by a the experienced. wayside, industry part we in know We staying and which impacted of recently with the front go in disruption the the change that must world or play has many

in our We're will appreciate efforts in for also stores. homes thankful We members dedication. working every greatly and and all day their in thrive disruption. our continued We're team appreciative customers with very the We're We of J. are directly our J. who Haverty's support birthday. front. all are of those XX customer. together part Tomorrow, who are all first October members celebrating to and Haverty's our founder's their our on serve the team we our day on coming team

Haverty building XXX to team dedicated are our for is who While them valued hard for dedication tremendously and memory thank and in J. J. our work to customers the and Haverty's the to other. members we celebration their is Haverty's next years of each

our our in ahead. and justifying now We during to back turn of in business the serving be of blessed best today the call quite years the by I'll best pandemic. over dedicated in customers being are country We're homes loyalty and business the to a Richard. part the certainly to the building

Richard Hare

XXXX you, over store sales the quarter were the year a were and up period. year over XX.X% the million, quarter written prior the quarter, increase XXXX Thank were total the sales up $XXX.X prior comparable X% store sales Clarence, up XX.X% sales third comparable X.X% In for good written quarter, were third and morning. delivered of of for

and to to recorded basis benefits reduced increased salaries and reduced which Selling, better XXX This decreased XX.X%. advertising from from by to and XX.X% costs. due well partially to sales XX% $XXX.X expenses as and markdowns cost increased offset merchandising were million quarter. of as due administrative was travel fell or margin XX.X% selling profit points to and gross general, $X.X the Our X.X% were million mix less during

adjacent net before During the quarter one We to year. income $X.X of quarter of income XXXX, in million facilities. recorded our transaction surplus taxes third income. third distribution to the recorded last a interest of the income Income third a other of on was XXXX property sale gain in quarter we This versus of $XXX,XXX of recorded increased interest the $XX,XXX million. in $XX.X $XX.X million of

tax of net million during $X.X XXXX share common stock income per quarter expense on in tax per share quarter XX.X%. was resulted diluted was XXXX $X.X or last Net of $X.XX third Our effective comparable for quarter of $X.XX an the million of or our in third million which rate $XX.X a income compared year. to the

of end $XX.X third quarter, million QX $XX.X $XX.X our versus million with year's XXXX was looking deposits end At December the at the the balance. We sheet million the down of inventories $XX.X quarter the of balance XXXX our third balance. Now, the up balance were and XXst, ended our quarter, quarter million balance third cash which from the up and was down last the which at from and million $X versus of equivalents. $XX.X customer million were year-end million cash $XXX.X

at sheet We our have balance QX no funded end XXXX. the on debt of

months flow, XXXX were for Looking million of uses capital cash of $X.X at million QX $X.X some XXXX. of and first for expenditures our nine the

X,XXX,XXX million quarterly or quarters XXXX Year-to-date QX also for $X.X common shares XXXX purchased in regular $XX.X $XX.X of shares. on paid during million purchased equates We we the first three million of stock of to and We the year. third dividends. which quarter XXX,XXX million $XX.X this

We have $XX.X million in remaining authorization our under program. buyback current

commentary. our expectations a forward-looking Our earnings release additional of please few, future our will list release indicating metrics. press several out I refer for financial certain statements additional to but highlight

freight to similar in in to the XXXX. the changes We of in our quarter on costs as as LIFO quarter well current This XXXX estimates expect is our third margins achieved be fourth product reserve. gross of based of margins the we and

fixed in Our $XX.X for SG&A The be range in to the XX.X% the to discretionary to $XX fourth variable-type expected of are XXXX. these XX.X% the expenses fourth compared fourth same and costs million to XXXX compared for XXXX. to of $XX million SG&A quarter for within in expected be quarter quarter the type are costs

increased XXXX $XX.X for CapEx been to planned Our million. has

year. quarter and $XX to of Our maintenance, location revised the facilities. we IT this focused upgrades of dropped our we year, in XXXX. the of distribution financial original new we We year. location participation outlet quarter and questions. closed our be repairs like end budget it Earlier for during end market Thank first of This $X third in to in CapEx for store on million we Worth commentary and you call the area the This footage at Worth quarter call. million going the in the stores our to the this Operator, an budget is slightly and was the would includes Dallas-Fort this closed third so one Atlanta today's area, opened additional the completes on lower at square another now your results. Dallas-Fort open

Operator

Thank first with question Capital Thomas from KeyBanc Markets. take you. Brad [Operator We'll Instructions] our

Brad Thomas

Good on quarter morning Clarence, good here. great morning Congrats Richard. a

Richard Hare

Thank Brad. you,

Clarence Smith

morning. Good

Brad Thomas

analogy I quarter. that through we us strong how and give some on you through business about bit the give working your more should here the in ability us trends little love the start I into the color in of a the hoping and XQ. side my triple had How XQ any have the favorite. things double think was out orders started delivered insight could to you of

Richard Hare

Thank you, Brad.

fill then start Clarence can me in. Let and

written CapEx are up fourth making ballpark terms And being investments some our the bit go to that We variable indicated little about far the or into going of the done we quarter. seeing this a our third XX.X% similar additional so saw going distribution we've cost we fourth our sales talked to implied as what some in increases about we're CapEx, ramp we seeing are that in of we've our on the we some from investing that quarter terms in things we talked third up for as side the it we quarter-to-date delivery same in up we quarter XX.X%. some quarter area XX.X% we're see in from as So, metrics also indicated it's slight quarter, spend to capacity.

warehouse that Some of delivery, and transportation in areas. additional costs the the is personnel in

that some We in area. have people added

overall Our from is where we down still were headcount XX% pre-COVID. about

adding delivered distribution quarter back look of think, last down year fourth was the last the think -- sales years was if the ramp-up as quarter I company, third the we are our quarter. I in highest I it will capabilities. personnel the our was XX third over quarter in say so we you XX% this

we So side production business invest the ramp-up of capabilities. continue that and to in

in to expect ability come do expect the deliver out comes an right way have some We build levels water down. as the XXXX. in. quarter, to of investments of but going product the this deliveries. heading side lot we seem to on lot area, goes in lot but In don't you visibility in we terms those were the But up things It product in we're inventory be a and have a the making of distribution and of inventory that in our that a noticed back inventory the soon terms of back to basically as into fourth on headed direction

Brad Thomas

Just a to bit. little on that follow-up

in I I that on history. mean highest you sheet number like million think that deposit the customer the looks to balance number the reported the $XX company

to model. think How back at normal into will you feeling it the to to end that. your you times in the drag or like about by start you you my year Do ability XXXX? -- lead least feel something is through get work So of are

Clarence Smith

-- year. us next the this Clarence. take I I think will that is Brad, this into think do

ever enormous an pretty had. backlog We consistent much coming do product it Our than in amount have which sold. of we've is stayed is of higher

X,XXX We have over water the more and containers well coming. on

maybe second know will the carry into quarter. and over first I So quarter this the that of end

deliveries to with this that backlog, most out accounting the quarter, and the I important but trends sales on that don't to the we'll customer are that before of consistent complete we holidays. see that this able the to fill are be So certainly

Brad Thomas

in. If I Clarence. one helpful, could Got squeeze you. Very more

through bit we're an as gigantic half. seems you number with working for because for that for back more to help all in you for while that can set strong X% I are little we a comparison it XQ, perspective see in a good about we think the XXXX. a me Just be since a to lot you need XQ tuning year just particularly guess, promotion XXXX, you in level very the to come year and back are going year gross about example of the most isn't from thinking got margin all to at backlog momentum some some the earnings or the in and of start so fine comparison may in do hopefully line normal models you you offsets, have

On end the SG&A looks about going some of you're next to to have should offsets how there to a year you are put those year be that side year? very costs good what to next think we for back

Richard Hare

questions, now period a are this so profit unprecedented is you I'd to are those how say assessments of non-promotional the line great do mean, gross time right I times. you Yes, these think very have make long will last on

we don't our added quarter calls then we where want that have down have I'd fourth to -- we you fourth XX% of the factor know kind had margins. we've in your my of side, you around incredible there like profit on the and it we from to our back talked to the going of quarter side, we've goal have We and don't and the our to we back forecast were, some if but both pre-COVID, want in but were don't improvements of number delivery hold back count count that that terms kind given. -- factored the third gross the in up in anything XX% seen some for head And there So it non-variable. to in of we numbers about expected I but head the increase on get SG&A for Clarence, and are ramping where some quarter variable – the is add. that it we still you not have I some headcount

Clarence Smith

team down our are. from see special develop. that margin I and more feel committed don't we credit that gross the and profit going for our getting back custom down. where we feels don't gross doing they I order, coming Brad. to the We're Yes, see more product We're that margins

Brad Thomas

Very helpful And going details. luck good Thank you, forward. guys.

Clarence Smith

Thank you, Brad.

Operator

Thank would to we conference the [Operator for remarks. to further I Mr. And Instructions] turn you. have currently questions. no like now Richard Hare closing back

Richard Hare

we to participation Thanks you, today's everybody's future results. Thank appreciate and Brad. look fourth we when release to in the again. call talking you in We our forward quarter

Operator

disconnect. and concludes We Thank attendance you. participation you and thank conference. may for Ladies gentlemen, this your today's you now and

Haverty Furniture Companies (HVT) 1 Nov 202020 Q3 Earnings call transcript