HVT - Earnings call transcript Q1 2022 | Haverty Furniture Companies, Inc.

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Operator

Good day, and welcome to the Haverty Furniture First Quarter Results 2022 Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Richard Hare, Chief Financial Officer. Please go ahead, sir.

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 Securities to Factors detailed reports company’s in results economic and Commission. competitive differ the Exchange that could cause conditions and the filed include actual and uncertainties with other

weather the morning Smith, call. is a will Chairman be and Our CEO, not under he and Clarence little this on today’s

update Burdette our business. Our now President, Steven will and give our you on an on comment results

Steven Burdette

Thank you, XXXX our call. Richard. joining Good morning you for quarter conference thank first and

adjust $X.XX We record our share to are to a marketplace. cost and record per build the quarter and had the our report versus pricing in stores of to We the first last help with values good profit in our $X.XX our gross retail demonstrating outstanding per XX%, margins. sales margins of discipline and teams gross year. merchandise our in pleased had share increases ability We a to profit strong pricing

good was in delivered the early written part during of both to to in the very Presidents’ business, quarter compared XXXX, results weekend. Day the and strong due business record Our a

and ticket quarter, Design sales H average and continued over of performance special more our our opportunities. the in $X,XXX orders For in could our be to in improvement attributed improvement home our

weakest for sales including adverse X.X% the situation. disruptions, consumer an softening we down inflation, geopolitical being with interest March chain supply written our confidence, now rising the quarter However, place rates, month. headwinds, continued Overall, and were

has our to backlog orders, but increased weeks. very of a average strong have slightly We XX undelivered age

of expect to that in planned our market age of third build a number opened We open reduce Indianapolis, a Gainesville, existing store several announced. a undelivered Washington positioned able in Austin market. suburb DC store market a to will relocated in that back fulfill expect another and of count However, stores orders year is the we are which additional dynamic be be not to believe the in the XXX beautifully store weekend, shipments orders planned we net average two square the and This XXXX, the over Pflugerville, we Virginia, increase the on past quarters. business yet to in store water, X% Texas. in retail our with an to growth X% end year we This to bringing in which in our a We footage. store next our in at to

evaluating footprint. closely reach opportunities are our distribution to our We within expand store new

well the several have company. but We unique growing in the very long-term order we deals mix fastest in that the positioned opportunistic we best believe are better pursuing, will country of quality be custom many special in and opportunities. markets sites a the are offer making with broad, We for and product

teams merchandising arriving bestseller It the to energizing for floor. Several to have list. designs, new the of following teams excited have new and store are new COVID already jumped products the delays. finally the which Our hit is the collections designs about our are

furnishing This expanded occasional, selections, our and strongest home upholstery curated allows selections We The held that risk. and categories without move our outdoor. product third-party in quicker to recently into categories with customers are are are pleased warehouses. serve our home inventory expand us office, new

continue chain network. QX, to experience our During in challenges supply we

the XXXX slower recover to helped. been and COVID import not the from vendors have shutdowns Shanghai in recent restrictions Our in have

lead be which out Also, encouraged these over our the which some continue in an help we to seeing domestic by of lead times seen reduced last XX optimistic delays. we XX%. XX% of times Vietnam, remain do reduction offset increase we upholstery However, from that should to production days are to with we have vendors, the in

continue to this QX. are expectations improve Our during will

is order remain XX% in of to on note order the company by our this improvement. a special total which project is that most QX average business business by targeted havertys.com. And tremendous Our our upholstered has relaunch sales improved special a It focused carries XX for QX important getting from our percent we mid-year. of the higher internal The ticket. is business dollars, to total plus back important upcoming to

utilize for and improved to drive a AI better tools content commerce, driven, the product the relevant which of customers We as using enhanced an planned later this analytics, the [ph] almost will all provide are Adobe site improved door with all launch more the applications integrated and our in the track process. personalization, Havertys.com in our enhancements shopping summer front are positioning, suite category faster foundation. shopping customers content of the and our on brand realtime is should Several better and smart experience. of search, user

are the is furnishings home website team relaunch. the about upcoming industry our We and having committed in to the best excited

the our the a we near we We record the growth opportunities term positioned best in are start and the future. profit repeating that good to year and believe furnishings home country have great both in see And sales and into had retailer performance.

happiness digital to members absolute are best the furnishing with focus investments continue to through to key to and our our and teams as with customer’s on team the customers retention ensure experience enhance our continue our we shopping that all capabilities. service we management Our quality

like thank making and the partners record and a Finally, logistic Haverty Havertys. their for and in support entire I’d all QX to our team merchandise efforts for

over return to call I’ll Richard. the Now,

Richard Hare

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

$XXX.X increased to million. margin X.X% and pricing gross XX% mix. administrative and $X.X to million to better from XXX Our merchandise due Selling, to basis increased points XX.X% discipline profit or general expenses

sales year costs percentage the of sales, up of a prior XX.X% As approximated quarter. XX.X% in these from

and increased distribution during increased saw to we before selling, $XX.X taxes quarter. the $XXX,XXX transportation million. income expenses expected, As Income

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

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

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

dividends for in purchased shares. Looking the end at we XXXX. expenditures we million $XX.X buyback At the $XX.X paid of XXXX, of quarter some we capital first of this Also current of first our first quarter, of million our the million program. remaining have year. million common or during authorization shares quarter uses $X.X of XXX,XXX And of the the first during regular cash were of quarter flow, $X.X under

release our forward-looking be current our to and commentary. on like additional XX.X% earnings highlight metrics. margins XXXX Our please to for between changes anticipate our expectations for a future margins gross cost LIFO several certain release of our estimates reserve. out expect product list profit I’d gross do XX%. impacted We be We freight by but and and in additional will indicating press refer to financial few, statements our

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

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

XXXX impact and any effective from new of awards tax tax is in the XX%. stock to potential be Our vesting projection This litigation. expected excludes rate anticipated

indicated, we This future. about the excited our my would on for like completes the questions future positioned this well As are opportunities time. first are at Steve we quarter for up to the call growth Operator, any commentary we and for open results. financial

Operator

from We’ll Instructions] first [Operator Sidoti & you. take question Lebiedzinski Anthony Company. our Thank with

Anthony Lebiedzinski

the are you Good Hope and well. questions. you thank for doing morning, taking guys

Steven Burdette

morning. Hi, Anthony. Good

Anthony Lebiedzinski

to So hey get some color. so question, quick just first –

want just much sense As volume? pricing a far how versus revenue, QX as did of the sales, get pricing to influence

Steven Burdette

but business. obviously an to slowed rise see from increases to to it. to certainly that’s some average have don’t continuing specifically. about No they doubt continuing where you we Anthony, Well, pricing. give our on Price that calculated we’re have percentage that were, Exact and have ticket impact

Anthony Lebiedzinski

Okay. That’s fine.

So as to current just some the there? slower Just pace are using traffic? improve curious, levers get of demand to far you trying what to as do looking, you are wanted store what color you’re

Steven Burdette

behind then us March we’ve you with is March that or looked business. year. deal event have happened getting Travel Easter commented in And spring on the probably we’re now. to seasonality something picked Memorial looking in either that’s with back going tax of the we back is into say, break is of more I’d March Day, up at that to Anthony, All and half forward things season. first has we Overall our one our biggest be certainly which the are April,

to that Average difference It out also a credit have event, run, now I often Anthony, closing for that one then going XX%. are and we we customer. amped increased our offering have little about the rates, running to flat to credit most have over will ticket that but probably year. We we But our Anthony is we’ve last we’ve That’s stated is we this our add encourage it done more and up. aggressive remained that. promotion try as we seeing now have right that up right

the element key one metrics traffic is our right one only that’s the now. So of down three

looking for bounce that to back. hopefully We’re

Anthony Lebiedzinski

it. Got

right. Okay. All

– try So, sense you some give are of better all, a – as like what more what’s is that backlog, as to in terms that? of categories, or mentioned terms is, maybe backlog? the details, that just maybe the of more big a please can’t quantify some far of categories just you color, have first that product components specific backlog, color if share or like product the give just in bigger it’s largest which us how could you Well, the of

Steven Burdette

Yes.

I’d digits up It’s prior say quarter. backlog of the single Anthony, end at backlog. mid the the our So remains strong over

did we QX, product categories, case a of increase see in terms terms of for in In think an upholstery. and decline I in sales goods

say would backlog would our in it. quite bit have I So goods a of case

Richard Hare

with agree certainly that that, weighted I’d way.

Anthony Lebiedzinski

you. Got

then, gross should a Okay. the margin kind in think the over gross the of, obviously for the margins the of guys, going longer-term you years, how And have increased the gross margin margin margin you increased Thanks these gross year. steadily of that. last of But forward? outlook terms gross for about few we sustainability

Richard Hare

Well, it. I’ll start and then Steve, please to add

in just a term we also very maintain, margins group the they and expanded. didn’t also great increases. job, merchandising proactive our So price certain was we expanded opportunistic did here those And but on short though,

in forward year. see to expect We going this guidance our

costs. year same inflation to going other to continue last and we pressures saw see with We’re rising the freight

at expect now of erosion. don’t we’re the to level year we the some maintain So, slight through expect the we rest

of strategy company margins with up… going overall gross in Now terms

Steven Burdette

I stores better XX.X% our we we what have we’re and discipline deserves getting Anthony. get value stay product. merchandising as and we product making in we that, erosion the team. first will for that a We where and XX%, Richard comfortable, price believe slight the we’re quarter. sure would to on discipline that which add said, that is the were to our And that from deserve Yes, feel we in it the just value, that in And

feel any we as or is differently to of But promotions with we with kind to some have that looking erosion to cost We catching our goods we and do at also see if And it. than have XX%. of as XX.X% it. with that pricing in that, any get pricing any don’t far with further comfortable up case things with

Richard Hare

Yes.

like So, XX% XXXX, XXXX. just were XX.X% in I in back, we XXXX, going in mean, XX.X%

on. go to So, those continue we’re delighted to margins see

Anthony Lebiedzinski

Yes, definitely. Great to see there.

your So exposure as the better just just is in mentioned of supply sense magnitude exposure doesn’t China? Now, you chain, a get your to of the the to to Shanghai Steve wanting terms to what wondering, help, lockdown China that but now?

Steven Burdette

XX% overseas Well, about that from come look XX% imports it’s over that little about and our China. at And so, if our imports XX of from here. of a Anthony, you coming XX% purchases, is or

is So we production happening. have exposure, some but

Shanghai. we But our trying because the struggle to side caused we that is out, to and shipments itself biggest stuff had trucking And it some Our we’re ways we it out some out. there are at has here not it get getting come we’re the ports. in the of just soon. disruption can ports It’s outside the vendors creative of find are certainly that get to to see hoping of solve seeing inspected and velocity the

Anthony Lebiedzinski

Got you.

quarter? in buyback, expect last terms on do for fully that you this question use second then, the the And me, to Okay. left of million $XX.X in

Steven Burdette

the definitely had end of that Well, second a or bit, third at the the and have the quarter. so changed this see, world’s would next through second indicated it We’ll the wait initially quarter get we us point. think through that’ll or We get be two. may by to little we quarter

Anthony Lebiedzinski

Got it. that best luck thanks and right. of for going All forward. Well,

Richard Hare

Thanks.

Steven Burdette

Thank you, Anthony.

Operator

our I’d closing or to Hare session. back comments. like any question-and-answer turn And to that does additional Instructions]. Mr. [Operator it for conclude

Richard Hare

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

Operator

that thank today’s their everyone We’d Thank does And you. like conclude participation. for to call.

may now disconnect. You

Haverty Furniture Companies (HVT) 3 May 222022 Q1 Earnings call transcript