HVT - Earnings call transcript Q3 2021 | Haverty Furniture Companies, Inc.

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Operator

Good day, and welcome to the HVT Third Quarter 2021 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the presentation over to Mr. Richard Hare, Chief Financial Officer. Please go ahead, sir.

Richard Hare

operator. you, Thank

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

and And now give then, Chairman our provide you results. Steven Clarence President, about our will Burdette on Our Smith, our additional CEO, an will commentary update business.

Clarence Smith

our very call. quarter with joining XXXX income record and quarter Good third pleased of another $XX.X morning. We're $XXX.X million of sales net you conference with Thank million. for

operating Our at increases, that in with team merchandising the and outstanding the and very able efforts store concerns, our during the customers. profits. pricing an operating we increased team charges, believe the rising LIFO and the Even chain COVID significant unprecedented in discipline being in competition hiring record to outperformed performance this costs supply major disruptions. and job producing margins We're has pleased and level. unusual reached of distribution, done and I the demurrage deliver our to with product significant we've challenges, gross pricing ongoing our warehouse especially

on bring of in focus Clearly, to and backlogs bringing available serve priority sole in that restarting our we've to better product over our due had is customers. is merchandise a COVID best was We're the backlog new our sold and to shape massive Our year. down development the orders. inventory in hold

differentiator an furnishings our always products, specialty appreciate and sales. which we've including have some outdoor struggled had increasing gaps China which stocks, and over is items, exclusive with months, back the and COVID-related of in are fashion levels. have several up past the Because drivers to We past months, partners we home creating Havertys. good in a excited floors, in especially out design In products styles for are products, several style We're are hit response. important important but added case and shutdowns, our of their However, and we shutdowns Vietnam online see and manufacturing retailer of the occasional greatly XXX opening goods. in the COVID production who imported the latest will

have the teams this a shutdowns. to strategy related supply and gap merchandise to soften Our Vietnam factory

We expect been have end our existing size with in serve evaluating numerous We've footprint. to XXXX, in distribution Haverty last to space to building to had we more pleased of the X opportunities In stores. retail which plans converting stores, strategy Recently, good we've XXXX we XXX XX,XXX stores, results stores netting of X. foot with year. X our over size square availability. locations, with XX,XXX open can We're store for with very

requiring tools, merchandise XXXX larger order a can special and of we large website our of importance selection planning CapEx. a in the We're set without of process With present the store. much

approximately in $XX this largest had same -- as be block. renovations in last the the stores we'll range are expect We net. we year, and million Investments

and our reducing the better earlier home our Norfolk distribution investment regional a costs The We're distribution shipment Virginia the center bought direct facility Our which year. receive growth. allow for shipments single center to Coast largest of serve this back center, expansion quicker to converting will from to we a Port, be will Atlantic expansion delivery allow full from us deliveries.

improved ease on the amid marketing are best-in-class website It and be inspiring platform. of process, upgrading align to Adobe in and and remaking graphics, to our site with and customers of The throughout will second reporting. We're floor search. an major analytics personalization, early planner, We're will investments IT teams upgraded design new next upgraded industry XD new use the and utilizing rollout the better focused Our significantly and in our the tools leader. presentation expecting site year. have the quarter for Designers enhanced

As last approximately with XX.X% we the are year. quarter last written down up from period year just released, over sales sales our fourth delivered X.X% same

last and XX.X% to weeks more XX.X% better perspective, receive having written much over to We're For and compared are QX this up as XXXX. date record having inventory year's sales incoming delivered delivery year. up are product sold

with retail us all in give an Burdette, supply like supply our we challenges to status. and on I'd chain, for delayed also Steven Christmas, shipments to update President, As chain is struggling of have real ask

Steven Burdette

Thank you, the our with third thrilled Clarence. I results quarter. am for

for performance our centers, stores, to delivery, distribution their whom not team happened Our have office, could the home dedication and personally without I want of the efforts. in entire home congratulate service

flow to chain the products over the been quarter. of warehouses supply network increase our has Our third able into

Our warehouse for our over third far continue rise are and we to inventories rose in seeing the inventory so October. levels X% quarter,

imports and issue capacity, where rising the supply the see to There were frame. our and December vendors of congestion spot Delta trucking in the months our the not November, shutdown spread our with fourth at headwinds with will August late in foam staffing with time continued a with rates, do the in majority We a an September. accelerated expect continued issues beginning ports variant The was quarter. as as for Vietnam late Vietnam closed see a container factories down pressures arriving of moving within slowdown container began network. a into and during the bright the this August, of July, quarter along the moving during products shut the in July things the in quarter container

positive at the they opening of getting our beginning from vendors are We as news began October.

outlook XX% vendors few production vendors feel Majority Chinese by first they like be year. give to production coming get with Year XXX% protocols November happening that continue to the A congestion New continue slow end be of be not XXX% able will of they a see medical because XX% now. did back Vietnam they Also, a and XXX% areas get rates shipments a upbeat it until late to be of to However, quarter process to to back of had will return of will capacity, to we next to by production. back port that and in the the safety from more place. Container container to concern.

expect well XXXX. to We issues continue these into

on the spot prices quarter. increase the during container Our continued market to

trend seeing October. in are we a downward However,

cost expect during is one a more time at XX% water we so the to spot quarter. will could impacting at fourth manufacturers and higher the shipping We our on the as areas our expense distribution, our service quarter market we continue more of our is balance to concern delivery be XX% ensuring mix than flow only Due that product, on freight reduced customers amount these to a consistent partners. and impacting incurred but and that significantly our we a Staffing rates. not with provide that no it during to substantial demurrage focus and be of detention continues is trucking

we're business opportunities. to We most We each We still as our start is service apart talent. areas of the of some that competitors. our have quarter, did attracting traction valued latter know in what part that but ensure the competitive evaluate sets our so consider continue seeing to our best the our people, the asset are we of us we from

weeks to X to over the seen pool undelivered X weeks our average from continuing have We increase age of the quarter.

we have special Our lead quantities the times order foam from seeing supplies started last higher production stabilized our suppliers due the domestic X to weeks. have improvement over and in

delays, the business order We back feel to that in be lead due see a quarter. special for a improvement confident team suffering but confident seeing will able from we our Our is times. to more remain fourth we optimistic the still sales these bounce

Our teams doing any wonderful products. are their regarding customers job delays communicating with our a with

improved delays. the record for to quarter thank to and entire suppliers of While for some team support help we all are from once shipments our their import times the offset in from I would slowdown improvements third our suppliers from Havertys. and our receipts a Vietnam, there making will in be shipping these suppliers bedding a expecting like in again and domestic Haverty efforts

the call Richard. Now over I'll to turn

Richard Hare

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

and or increased activity. offset due to continue improvements freight during points merchandise increased and margin we costs. million, profit XX.X% by XX% the and better gross to as to Our in primarily These XX $XXX.X mix from product due partially XX.X% expenses our were pricing increase LIFO less million an general promotional activity to sales administrative quarter. increased reserve increased and see Selling, $XX.X to basis

costs basis However, XX%. of percentage as sales, X,XXX points to XX.X% declined a from these

did which during administrative we costs As port million, selling, we Steve XXXX, congestion, demurrage mentioned costs. significant quarter $X.X of experience and increased third of and earlier, the our general incurred negatively approximately impacted

income X included operating in past adjacent surplus has of that model XXXX center our $XX.X was third taxes leverage $X.X the in to income financial $X.X on distribution million, our the substantial quarters, Texas. gain these increased levels. in before million. Income which the Other demonstrated was as at However, Dallas, quarter property sales million to

and $XX.X vested of state in last stock XX%. benefit effective difference $XX.X third the Our rate was compared tax taxes tax stock during common quarter the expense share net is in per or the on third year. income due per statutory $X.XX income in of quarter to $X.XX and rate which to was Net income XXXX an resulted diluted The the XXXX, or our rate awards. tax comparable million primary of share effective of $X.X for from million million of the quarter

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

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

and expenditures $XX.X of million of the of X flow, Looking at of the months the uses were XXXX, million dividends X cash XXXX. first during months some capital first $XX of we paid for regular

During shares. of common XXX,XXX quarter, we third the $XX.X that's stock, purchased million

program. buyback additional Directors remaining As of $XX of the in third of end Board the XXXX, under million reported, At $XX.X of previously current authorized authorization repurchases. our our million quarter have an share we

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

profit to in our reserve. continue for by freight We be margins to changes our anticipate costs We gross product impacted XX.X%. gross will XXXX between of our and be XX.X% profit to estimates margins and current LIFO expect

Our XX% due to demerge rising the fixed be to SG&A expenses increase the expected are to in costs XXXX for range, million million previous variable-type be $XXX an range expected warehouse and $XXX to and of XXXX The discretionary primarily over for our costs. to within in XX.X%. SG&A are type estimate

to $XX $X.X for expected for be XXXX. million million, $XX.X to investments remodels expansions in remains Investments approximately million at information in are million, in and planned account replacement CapEx technology and XXXX anticipated $XX.X our network be expected distribution new stores are our Our

Chairman new Our This of to This year vesting awards completes financial legislation. from is third my pack the on this and stock expected excludes projection call be XX%. CEO. anticipated I'd back Smith, to the Clarence our like impact tax rate potential effective for quarter turn results. over the any commentary to and

Clarence Smith

the with pleased record analyst Jerry and COVID believe years comparing veteran importance home recent second in and the We're the come. that to agree against that this has from We for very XXXX year of precipitated XXXX. performance Today industry well half editorial underway. the with week. are We return to an with of Epperson, changed We home the Furniture records dramatic

an related We're boomers, Following children. moved of to back Xers The will people move continue where millennials and another having grow to XX% homes the our the the changes to Gen homeowners. have having suburbs. life want home housing of getting to being desiring We're to the households because to boom importance.

dedicated Atlantic Southern, most You nation serving Havertys' doctor in productivity, the to can in to see XXX-year furnishing is are from from strength commitment of the grow think the premium This that H in past and operating is positions of needs up going the product the ideas. double-digit growing country. resources Central to set We rest to states. new sales church shop, bank, home. and profits call gaining distribution locations, we'd from the years. experience, Operator, years in XX to areas transform innovation for history ahead. in maintain our the now and our the go and and strong home we services all-time deep the level the terms believe These the and our We transplants us of strong open merchandising, questions. Design record continue and have now to the like

Operator

KeyBanc Brad [Operator Instructions]. from And Capital question take Thomas with a we'll now Markets.

Bradley Thomas

A quite environment. a congrats couple strong Richard, questions, on in and all here the if really difficult for could. on I year-to-date, of a well. Steve doing you're operating track year momentum Clarence, I And hope

The you that that are sales as working about you? now and think be potentially How with of share right first to dollars us? about quantifying how what think backlog for benefit that to book anything that you kind could is to all to just extent of want big how we the size the to is with starts should that and the normalize order

Richard Hare

This would year. say over a Brad, Richard. in was backlog the very quarter this backlog. I year's year's XX% healthy still exceptional. is last we up from third is backlog have Last

a do the backlog we into fourth going So quarter. indeed, have, healthy very

Clarence Smith

it's come down We the like managing. it's now quarter. healthy. we're But It in is feel something

happen good what's feel this be this going of delivered We because quarter lot a to about will significant. it it's quarter. So

Bradley Thomas

on business. to Got written you. moving helpful. of the And Really side the

an the that may written you're as do quarter-to-date, think changes been Any versus at value, levels little How what noted you're of down perhaps you in here. kind be that? behavior. Have feel You about pre-pandemic. customer we modeling growth? sales changes a from maybe of Can in absolute the are out there orders the you're what about year-over-year running the of talk bit cadence affecting promoting? seeing you any about written Obviously, how tremendous

Just trying like rate growth to going think about that look may forward. what

Clarence Smith

coming out. were stocks of best the of certainly our some and affected product in lot in. of going already out A flowing Well, is sellers sold

It be So on year. let's of be if the today the is months, could next say, delivery just best-selling be case in you're coming could goods, some our to in out. going

get we get they do So become any product can't in our people best will delay if back the find immediately stock, is product. we that What sellers.

people that backlog I get they they're the to about planning want place get to is to now. they be that on this things best that in they order get our to can And it. if that So one line the affects the sellers definitely buying able are it. know what recognizing to of feel affects They need product think

about it get customers when don't we've it, So it Steve to and year orders. -- the our reacts get a been when our to that been it get We're from affect our remember, out-of-stocks, better and special started, XX% you of because affects react a with they In know of pushed still even was but this, order upholstery to the now quicker, it something out month. what it on can't pushing about some of special off as back to it's going particularly other their get they last increasing special to orders, us it. business. had business. We've and about -- though has words, there they're and And that and able domestic driving in it first it month also product we'd than referred it's overall, a does upholstery be being producers to and pleased out

does about orders. product a having still So what people but very affects strong a It's it level, the affect incoming feel making purchase.

Operator

turn [Operator there the to no further additional closing over It to our back are Instructions]. questions. for presenters telephone appears And any conference I'd like or remarks.

Richard Hare

in to with talking for you thank quarter We the today's call. we look results. when your forward release future our you Well, participation fourth in

Operator

that once We conference. does conclude for you all again, And your thank today's participation.

disconnect. now may You

Haverty Furniture Companies (HVT) 29 Oct 212021 Q3 Earnings call transcript