HVT - Earnings call transcript Q4 2021 | Haverty Furniture Companies, Inc.

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Operator

Good day, and welcome to the HVT Fourth Quarter and Year-end 2021 Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Richard Hare, Chief Financial Officer. Please go ahead.

Richard Hare

Thank you, operator.

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

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

Clarence Smith

XXXX Good We're quarter morning. Thank a full you for to pleased full joining record call. our conference performance. quarter and fourth year year report fourth and very

that offer process and because final circumstances closer shipping outperformed all sales products regions increases our and $X.XX working in record sheet, disturbances reliable the in a manage Housing containers share time believe of concerns, bring and record to well $X.XX. to continues evolving better we in balance per important previous distribution e-commerce shipping level. best-in-class the to many levels. more had the home reached believe our teams suppliers tailwind and in in all history, by For providing from first delivery, net related in business. faster mile With earnings versus ongoing well last service we our our a fastest-growing markets be positioned our We're parts service as of company We in the competitors year of with our earnings operated the entire of and we're that particularly to our we we in unrelieving of who $X billion the country. as We challenging in cost. our price proud COVID-XX our to for continuing We're in invest supply chain product growth. and

hottest the is in United focused real XX-state States. the in on store adding stores in footprint the estate positioning Our markets

hottest year, the and to Pflugerville Georgia, stores We market. Northern in This in by plan out in a X we this recently plan Florida, Indianapolis and of of Virginia. year. effort relocation Austin store positioned the Zillow. branch have Texas, net markets existing have open lighting our housing We X an noted in Gateway, stores We're most and and a to to conversions, all top North multiyear in XX Carolina We'll upgrade open XX Virginia LED our stores. completing X stores

major X have We remodeling planned the year. for projects

distribution XX% allow relocate in for growth We're in to Mid-Atlantic Braselton, year. Cincinnati, more to added for the a for reach history. in in in stores plan we later distribution We're X a facility better in strengthening our long to allow our with in home Georgia. Ohio investing markets and the capacity center and further main delivery to service. regions. this in deliveries years quicker we In X can XXXX. is XXXX, portfolio better position best estate We're our capabilities real larger all planning year storage We Mid-American regional Our the to serve the next beginning facilities

We Virginia and capacity in inbound able growth the have that DC size to XXXX. full Norfolk quicker import The Delivery port, us will our plans to with that reducing of underway a to transfer DC costs. directly increase more through center deliveries and to our storage Coast to will and store allow Atlantic support be Virginia XXX%. convert double expansion home Virginia the by

investments as and services using in are and the our to enhancements. footprint continued the in capital stores, IT expenditures will We of be key into is These that site allow on depending million, our applications approximately our for the foundation several for properties. the The XXXX $XX website. our utilize growth the serve front sales our up We're of all and future. set the distribution door, us customers suite expect replatform timing almost XXX% sales to process. us and Adobe Havertys.com of investments

transactions we in While pure range. sales. of sales digits the we mid-single XX% Internet that move the After believe the percent are our to can relaunch,

the more saw warehouses. allow XXXX, outdoor expand in with move merchandising new product with furnishings, reduce to top serve quickly expanded categories. also home more inventory is and this provide response. product curated we're selections, home suppliers in serve our Our into priority our and and in our and office working our We occasional selections new back and us are to to customers held to our This bring began backlog to program will in to customers' pleased build furnishings third-party We We're customers upholstery. that quickly. success

of third-party have We our a goal collections this year. tripling curated

supply year. past bringing chain over merchandising and delays due and developing factory the excited we Our teams on the are new finally in back burners be to designs, the put to which

see in in We coming in create the am record terrific proud performance. this all customers every I XXXX of a team's our to quarter. to and expect efforts was to second our so beginning these measure. products almost serve

ahead. set have will call over Burdette, new I'll Steve our now in reach foundation which operations records We on the a we and to turn build level, to President. years the

Steven Burdette

entire thanks of members passion record quarter and I offer fourth so Clarence. outstanding team to headwinds to well my year. had from results. of the patience hard well our took commitment, for deal great a to each my as each yearly them. during as billion overcome of XXXX many $X as the they work, Again, sincere results team Achieving the as to want Haverty Thank congratulations you, the

time New part August our part on QX was frame domestic to a do reduction equipment. along and give approximately December caused X of in beginning and our their supply in our Vietnam issues ramp-up expected, XX% for off These weeks of X as XXXX during they maintenance the time chain shutdowns Year's reopened XXXX. of needed Christmas most the their receiving QX and Also, in of As early the in with suppliers the associates impacted and and latter to closed January. year, due the last XXXX to network September times October slow in

However, time increasing February, receiving we and our and as normalized getting the our to frame March shipments expect levels normal that in will levels seeing operations. our are domestic imports to return vendors back are

increased days. pool to our the XX remain continues undelivered Our in healthy, has average age but XX last just weeks over to

the We average a pool of by are end the seeing reduction stabilize of and in to the age undelivered QX. expect

seen improvement in an orders. times special with have We vendors our lead

a and to container of Container we concern. remain by rates capacity in return sales improvements, midyear. these to Order a Special are continue our targeted business XX% expecting With upholstered our

appears remain it settling in that the While rates, there they has some been elevated.

our the products our However, to be we congestion and West contracted an the majority move still ports continues Port are at some issue Coast. China under to on of rates. of able the

an weeks, is seen be over an at a our Omicron The able saw our the the our this noting of congestion our of of come staffing have due products to Coast of positive of that Savannah through experiencing XX improvement number over handling vendors port our December Also, days a we at improve management out, XX% continues to the in are the hiring absenteeism has to the in the across over but imported we be our areas absenteeism. facilities. person but time. note, variant port business, our focus to needs, have and retention We January, at seen teams. all last put us days our be the those in adapt. in the couple However, Savannah last we no is it the to allowed of On East most on reduction required and with increase It worth pressure shipments. both has

Finally, and of website. improvements I progress you the on update to are with making we wanted our the replatforming

to speed As our streamlined enable the with Clarence This I experiences this to sometime site overall shoppers. be for of are and that and our content, market front suppliers QX. features inspirational our digital trends The in will 'XX, and customers, partners their a targeting enhanced improved and dynamic quicker optimized and for door browsers site working have like product will of Adobe functionality, pages, Haverty to all transactional search an and content our thank meet completed get mentioned, Again, record new we provides and the entire Havertys. to better for product personalization, efforts QX in better and support testing team and and reporting. would demands category AB implementation making

over will turn the I Richard. to Now call

Richard Hare

net the quarter. prior over year prior were morning. XX.X% In year of million, good store over increase Thanks, fourth quarter sales the were X.X% up a sales XXXX, Steve, $XXX.X Comparable period. the and

increased continue and primarily XX.X% to sales, to increased due increased or percentage Our sales, impacted in basis general XXXX expenses points were costs. these $XX.X gross XXXX, our in in from profit to increase we due flat. XX $XX.X general increased income $XXX,XXX to experience of negatively costs. Income the quarter And on our million, fourth selling, administrative the gain and $XXX,XXX significant demurrage before we recognized quarter port approximately income did $X.X decreased LIFO and a an Selling, freight which reserve we million, a of as $XXX of costs of congestion, was million. to XX.X% We property. costs Other incurred XX% as and basically to surplus fourth margin see taxes million negligible. increased administrative product

of quarter of rate which the impacted vested last expense diluted $XX.X statutory comparable effective for tax Our awards. in of to income quarter $X.XX or XXXX, certain $X.XX rate $XX.X tax income rate stock tax was compared The of XX.X% on or an stock $X.X common fourth the The credits. our the in per tax state rate the per share million benefits quarter resulted year's in was fourth job recognition net of XX.X%. of state during and the and was creation the XXXX is effective income from difference primary million prior due fourth quarter tax year. million share Net the by to taxes

and quarter end the million from XXXX. XXXX balance fourth no up XXXX cash $X.X were we the cash our $XX.X which balance. million balance the Now million, which $XX.X down balance. $XXX.X quarter, end funded XXXX up at of the deposits and $XXX At of equivalents, sheet. the end million XX, December XXXX, have down million our sheet from XX, were our the the to our December debt turning versus and and quarter, of $XX.X the inventories QX balance the million, versus million was At were of We $XX.X ended with on QX QX customer

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

quarter, of $XX.X fourth we the purchased million shares. During XXX,XXX approximating shares, common

million X.X the our buyback approximated $XX remaining we this authorization third year, we X% the at we in exhausting which the calendar market shares, have million of the common on which fourth capitalization. under For $XX.X program. our end current of this current authorization XXXX, intend of valuation, At our is purchased prior equity to million of quarter current approximately shares, of quarter year. the And

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

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

XXXX the gross up year margins to of margin course expect of gross levels to XX.X%. over QX ramp also We from the these the

XXXX Our SG&A to over to costs levels. of which be to the are $XXX The XXXX the fixed range variable-type million XX.X% within be a in for million in prior is $XXX are discretionary range, increase to the type for year X% expected XX.X%. expected SG&A and expenses

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

This legislation. excludes commentary XXXX like stock to projection the now. open any Operator, from my XX%, new on and the is anticipated expected be tax would Our vesting this questions we rate effective of completes potential impact results. financial fourth call quarter for to awards tax in

Operator

& Sidoti Instructions] [Operator Lebiedzinski first our question come with And will from Anthony Company.

Anthony Lebiedzinski

notable first, seeing are so is versus view levels, also, any of pre-pandemic cancellations? of And sustainability your what So you demand? order the

Clarence Smith

I'll Well, with that. start

We haven't seen notable any cancellations.

mid-quarter. a gave It's up issue be is we have delivered Anthony, year. sales that lot announced different healthy. we and trends we often backlog very COVID-XX, pre-COVID, of over we both wouldn't last Our quarters. with written last the information releasing But several and to

important most we weekend. weekend. was is last And event significantly quarter, calendar it's the And particular by year, In this addition, affected are upcoming the last Presence next it Weekend.

not So is the calendar comparable.

only weather that. obviously giving that be like earnings, But release don't months. not current do releasing will when going business to and to couple also we're our we reports. I'm conditions we So be of a going

you talk we'll what want So all about happened.

Anthony Lebiedzinski

just was curious more seeing necessarily quarter-to-date, about not your you're I what but longer-term Well, view -- and

A –Clarence Smith

You feel in our of and We the heard strong we to very position. able that quarters. a which we’re presentation, strong backlog, very are very carries feel of about lot year. for next couple expect like position, a feel There We good in our be about good the we’ve really to have we got unknowns.

Q –Anthony Lebiedzinski

course. Of

come Or something that Now backlog? that out the did you guys will in quantify XX-K? is the

A –Clarence Smith

over up We last did year. it. quantify not It’s

Q –Anthony Lebiedzinski

Okay. Fair enough.

that’s to open current assume new mostly to And geographic footprint. right. you All that per your a within then I fair the talked assumption? Is going looking Okay. about be growth year. X stores accelerating store Clarence,

A –Clarence Smith

footprint. where distribution It’s in but which distribution also. you capabilities we other help within out heard our a states, serve we’re we of have is into will currently It couple within that grow for go expanding us of can the could place. that facilities, it our the And

Q –Anthony Lebiedzinski

Got it.

then gets closings. to store and think the as – openings those X open and the it I what’s about ballpark you so to closings, talk – for as expect far X this estimate openings as close Okay. and And year, when

A –Clarence Smith

in to want Richard, going you to do They’re -- later be year, the

A –Richard Hare

will year third the or X opening the rest closure quarter be this be the Probably of earlier The part Yes. be of and this fourth year. will year. will latter

Operator

Andrew [Operator our come from And KeyBanc will Instructions] with question Capital Efimoff next Markets.

Andrew Efimoff

on achieved to milestone I'd your congratulations you last sales my add like billion $X all year.

to I obviously quarter. the and wondering written So concerns seen color January. But on if my in you've quarter. that industry in during I the cadence whether about demand of on evolve know throughout and first I'm the in payments, hear the we've trended have question which more business. Omicron heard could months broader stimulus curious -- impactful demand especially from an is your lapping been couple how past you more provide how was any perspective,

Richard Hare

part Steve written the October, December. hit business written positive -- QX was the about Clarence trend and general. let for Well, me a a the soft were in November, then talked in in they trends or it little written were But and

Clarence Smith

Yes.

because inventory compared December I of part of is think also a the our a we record. bit couple to cascades that's such was had so that issue of in And little that challenge a a been a our were previous drag. that year in categories, particularly low

of expect clear challenge year the but the on product lot sellers. We was a We've water, more some our to of a coming that on up in, of of now. got a in because it lot best inventory late starting

Andrew Efimoff

in and expect competitive as it. well the the how more as Got observed environment recently And XXXX. XXXX? Understood. last what tracking about during own your pandemic that how in know promotions the you've and to then environment could ran in in change year relatively I you that promotions But you talk lean of are height business

Steven Burdette

our have really Andrew, tell I Yes, Steve. is you this we cadence. would not that changed

have what be We used. that at credit to there looked needs done We still competitive. being and be to aggressively seeing see

do. we And with will needed, promotion so more overall calendar a not change with but and what aggressive be our little schedule if we that, may

consumer focus and Our broadcast efforts medians obviously marketing digital attract efforts bring using well. will but as and more still to on continue to in, those the them

Andrew Efimoff

provide reflects product on encouraging margins into costs saw for margin for helpful. gross you improved year more how Could That's they last you freight your the gross versus year. and was year expectations guidance detail margin that to play your you're And and for the as outlook it it. similar Got the strength forecasting?

Steven Burdette

high. seen Well, We needed into bringing They're is down as the still And basis we to in a still premium exist. have have this some basically, container Steve the said on Certainly, that all still why and not rates. this XX.X% leading we in in that pricing. leveling again, premium but it in we we're impact for paying there, some, and of But That's see and we Andrew. rates. out the need they there guidance deal, product out we we on the get put rates factored gone some our we have XX%. XXXX, any that's our margin consumers, to do still are through been

Operator

does closing turn that for conclude any remarks. session. I call And the Hare. you or Mr. question-and-answer back over now to will additional the

Richard Hare

your for when our today's call. first We in certainly talking quarter participation look Great. you Thank future release you forward results. in to we the to

Operator

for conference. excellent Thank an We you today's thank participation. do you. And conclude does Have your day. that

Haverty Furniture Companies (HVT) 16 Feb 222021 Q4 Earnings call transcript