HVT - Earnings call transcript Q1 2024 | Haverty Furniture Companies, Inc.

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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Haverty's First Quarter 2024 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Richard Hare, Chief Financial Officer.

Richard Hare

Thank you, operator.

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

our update CEO, and now Smith, Steve on additional our provide Clarence and business. an Chairman Our give commentary results will President, our will Burdett you about

Clarence Smith

joining for you our Thank first quarter call. conference

were XX.X% were sales down QX million, Our sales down down with sales comparable store XX.X%. written $XXX Total XX.X%. to

at last continued million of costs, and $X.X control us year's to pretax We margins which million $XX.X QX. profit strong compared with in XX.X% to gross allowed produce a

for of of important plans We Memorial are the and products, energized new well signage. new exciting and excellent with first prepared the Day inventories in-store marketing event, most lineup the half balanced

Our year of increase Board XXth a increases. has Haverty's XXXX. is dividend dividend in dividend, paid which approved our year consistent our since quarterly a every X.X%

up, and a time, But X won't The there pulled This the many negative the gangbuster difficult who in years Our once shareholders The industry. industry. significant stores balance throughout back recovery. invest pre-COVID. to roughly had We a us backlog capital to to infrastructure X-year sales sheet deliveries survive cleared of impact times. the experienced furniture a our Haverty's has due of dramatic regions, following cash major on to our increases share, $XXX In timely during industry with in supply return experience falloff in market strong million in be sales XXX markets. especially in the allows struggled homes we to will our in throughout COVID the years and over players furnishing demand gained then slide COVID. furniture forward that has years consistently in impact

end first very of numerous to retailers with clear failures we the the slide, While business. manufacturers until a major lower furniture factor impacted has fail. debt seen and it sales believe more the see struggling in to we've have tied year, the is this are correlation positive. becomes housing to slide with cannot Clearly, and closely world. when These debt past major interest the and expect handle will interest begins back market, bankruptcy heavy all the fast South the that combined high leverage. a we industry in continue furniture and competitors demand that our it rates are housing at times weakness was Major in to In edge of Home felt housing. to industry, players the rates that higher positions a

our We well have areas We and best to states these continue fastest-growing the in grow markets to uniquely X are positioned years. in country. funded debt and in the that the we are believe market growth strongly coming important in share positioned

and growth our operating upgrading store in our investing to and serve better are We customers. store systems

major of sustained couple should remodeling month. in financial believe next a underway in have growth. completed resilience be We major by markets, financial which We projects for

Mississippi, new suburb in in growth major state South reach stores to X We are recently Haven, and opening I year in on Memphis, entering Tennessee. XXXX. store track our XXth opening our of X our new this goal of attended a

the Houston Tampa not plans Bed state, Beyond sites. former be South of with awareness, find and strengths, opening is have our years we experience and X ago, been distribution, Pembroke largest stores where Texas excited for We place. submitting have brand the the Petersburg, a & management months, which in return In Haven where locations stores. strong announce Haverty's allow market adjacent followed very has in to market do will Bath excellent us southernmost XX by All opening locations stores, store the site where will to areas and By gain Houston, to in for store X markets our in stores rates the Florida, have markets to our know Emerald was at St. will with success. Central in Miami. are reaching largest Coast, Pines, that Florida these to it combined XX from in Southeast and existing solid into in X region not first next able the Day, left We're we market stores. over Southern foundation in Labor we our Destin, have significant stores Texas. throughout below locations we Sunshine to footprint we these state, XX coastal

Baybrook area the open with will store year XXXX. Bath in later in Woodlands We QX our follow former first building and store the a & in Village this Beyond Bed

We Houston expect X stores serve Greater the years. more to positioned to next in have the market

suburbs many in believe position Station furniture years we'll strengthening of in well be received that the our in Austin for We delivered northern of Texas. stores. and positioned Houston have major our Houston a College from and We well and

be the All expertise, and order I'll driven capabilities. to building regions. our We profitable expanding our service, throughout country are turn market the President. best are furniture growing products, design over Steve teams brick-and-mortar, customization and our investing to now in the and gain share to call home our in Burdett, special upgrading team's

Steven Burdette

Thank you, and morning. good Clarence,

a are Our housing first quarter results crisis interest continue and headwinds we to with show the that rates. facing

furnishing our all However, continues Haverty's a be we that to to to ensure efforts happiness markets. our struggle customers. by be is in encouraged traffic Store team's to continue

March was coming impacted However, we slight did see in which numbers traffic February weather. and a improvement off January, by and our

The our was increasing over of gain Our design dollars design program an X%. number driven XX%. momentum over engaging average to in of over total with quarter, for increase with our up XX% business continues customers the by ticket design

continues chain disruptions. significant operate Our to network any without supply

been projections margin comfortable for We beginning rates that our XXXX year. have to able so we new with negotiate the May our for freight in feel

to continue be condition, XXXX XXXX. year-end XX% and from at from quarter we're inventories X% end, down and almost Our almost QX excellent in

Our to from which has XX.X% up to dollars the X weeks. partners be continue for to remain vendors was business, times to X our This lead order great continue helped as drive special in quarter.

with to service. quality, circles are you customers' As furnishing X messaging key marketing introduced include our This feel know, our regret experience. we free campaign, that design, experience, new pillars we around choices, to happiness and happiness a

in a our media impactful & will with media and change in Media Lynch our furnishing written media investments. centered return recently to awareness of our that planning in we our We communication a brought to traffic.As April the with concern campaign. manage, result regret has Co, EP overhaul on and guaranteed increase a Lynch strategies business paid optimize approach. we happiness in made resulting Carmichael they will agency result, how decrease Carmichael Our targeting efficiencies, in Media higher and develop a and our partner. media tailored in Haverty's to believe buy, greater Effective better our buying around decrease partner free X, record of with

fully promotion of first be will in implemented half year. our the for the approach media new Memorial Our Day, largest

our our awareness community store this campaigns. positively building combination help we focusing paid local local We advertising are efforts building of store on on marketing media with more Additionally, -- feel complement will the continue efforts traffic. of conditions continue holiday in to impact areas a promotional part business. all attrition Extending financing match staffing events, current of we rightsize be to through will and our to our to our

Now over I to will the turn call Richard.

Richard Hare

quarter over first period. XX.X% XXXX, morning. Thanks, net decrease the prior the year quarter. or Steve, store and XX.X% down $XXX Comparable good were million sales sales the prior were of In year over an

to profit basis due points $XXX.X SG&A $X selection XX.X% from million increased decreased and margin or gross merchandising XXX million. Our XX.X% expenses to product mix. to primarily X.X%

costs approximated during up As a of XX.X% quarter. prior the selling the from decreased of in transportation costs, We and distribution, sales, percentage expenses year sales, quarter. advertising, experienced XX.X% these

quarter was higher Income interest $XX.X taxes the on due $X.X interest $X.X income rates. million our approximately before deposits to million during we earned Our income cash more million. first to as decreased

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

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

regular we of our $X.X million out authorization did We dividends. quarter in also we our CapEx not program quarter, any Looking our approximately $XX.X of uses of was some the and first million of of of at share XXXX, cash program. first million the flow. and during the buyback repurchase have paid existing utilize $X.X in

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

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

vesting stores, at are anticipated $XX potential replacement XX.X%. approximately the new my completes CapEx for million. We commentary of of tax anticipated $X.X to to are the Investments account results. rate expected planned projection in tax $X.X This stock be remains quarter and million. Our and be expected be excludes our information impact in This awards new network expansions first legislation. XXXX in expect million, our for XXXX on and technology any investments financial our do remodels to distribution million effective $XX

Richard Hare

call Operator, to questions we this open up at would for the like time.

Operator

will Company. question [Operator Mickey with Legg this At question-and-answer session. Benchmark a Instructions] from be time, is Our first we conducting the

Michael Legg

elaborate market and the the to can Houston chose you you there? Maybe the again. Houston enter decision Into you opportunity on see why

Clarence Smith

is that used to to and come about distribution our we've market largest while. strategy that, in for a a figure quite Well, footprint. trying the We Houston back talked is been in be to there. We out

X got in good extraordinary got lease. & -- into we that Beyond Woodlands we're going Bath it's under lease, area a former main store and Bed store is an So that we've a store the

in their in and The second also store down great Baybrook is spin-off a companies of also position. Village one

market, stores. we of couple we a So major a have that need and know to it's more than

and So we We there, over We can large back market plans northern know to they markets, in -- can that next finally it serve the is a place. facility in areas Houston. and serve to expand of well, we already terrific as that's who where years mentioned, Dallas we now it reach getting the growth positioned from several it move in. our the and have are, we're to delivered I out

Michael Legg

maybe comment And maybe on some a Great the competitors getting and your helpful. market price as on any follow-up, there hear. just promotion put then industry comment if you super quick in just And in promotional environment? been then to are That's the you're in this could you've seeing competition able place. how increases out of to a

Steven Burdette

how in -- and is or out. This Steve. really things our our the promotion cadence haven't seen change from a tell I Yes. pricing competitors would you, we

there on being credit down change the a promotions So I last adjustment. have call, are we really see seen of the we did commented in not cost. because tightened

seen are have being offered We not on side that that of it.

don't see off we that that. from point, vantage changes of real any So

going really to fewer by excited they're to plan in plan Because is going at about. basically we're excited of of look And is being different we're market, that I bring partner, can going a a an media to by that Dallas from our thing be do Tampa. on what really about instead individualized of change more having Now plans. We're a that focused We're Birmingham made driving us. commented, side to market individual it, and as different and to going plans very traffic. than one we our than be is

about So of us. they're that do seeing results excited to we're we're really to and the for looking what forward that, and going

Operator

Our Anthony from & next question Sidoti Lebiedzinski Company. comes with

Anthony Lebiedzinski

Nice the well. as sheet increase the dividend see and to balance strength here

So trends bit, to little I in know but you business. the on just a quantify you touched guys see it if as as written far can the wanted

that was March February than because better the weather. mentioned and January of You

the So if go numbers last year, did but guys have on know is don't business? you And not, could over just this year you Easter could. this that or earlier I maybe fell any if than you the impact significant if to notable also,

Richard Hare

it's Richard. Anthony,

down But in about We very were of in business the difficult month hit March, then and And me X%. down in about cadence, a X%. February, XX%, written we we some then were that improved. write Easter. Let Steve's almost on down it January, terms the got were comments business

kind it environment can out really you of difficult in see started with and improvements February So in March. the January

Steven Burdette

the Yes. offset really effect of year leap Easter effect by was February. the And

less look of at together those months. them, little combine And when it, we the kind between X than Anthony. X were down at I think look you if combined we X% you So a

picked days equal but up you Easter, you were year. there there So lost when leap

Anthony Lebiedzinski

Got it.

about I out. Okay. forgot And I for guess pointing that that. thanks

that obviously, you're So Houston. good thing reentering

year X know that of do you're you that chance have again, a pace talked accelerate about now, given to you balance strong there marketplace going I guys, the growth? for But accelerate in and store are to may a dynamics be it is that sheet. in next. you the open years, stores you on Would this that openings? the looking do the future You think possible

Clarence Smith

opportunities. to mentioned, We depends the going think as there be I I opportunities. think more I so. on It are --

to and be at new a next team been to do at years or built have has a in that. we're a I planning. it, there But a going We space the We We've those we are very we'll are and prepared do opportunities us, good be and converting do and to to there'll staff Haverty's. believe being more for are we converting. store that, that's our of when open it. and to to existing do growth it Most good of open got do we're and few

and as going we're be on things to those to So we're jump ready, ready happen, them.

Life. back, you was did and So were XX stores able execute yes, we if look of think way ago. XX Home Home XXXX, Anthony, the biggest that that, or opened one X to Life we're around at years acquisitions was we I Sears time, That done was that and and

just So sure are want we can it. there we We good know to do opportunities. make

that expect there. We to be

Anthony Lebiedzinski

big here already to coming areas of take kind up and mentioned All after business? reduction you know right. as that initially And we COVID how some Did as ago, that Are rehired the which first and right quarter? personnel I you a far as potential looking far the Steve, should to years then But hit then as did people staffing. place staffing X size timing some you do reductions? rightsize back. efforts about think guys in you of that

Steven Burdette

business the fluid. it as it I about it is ongoing we're and to it's managing And go. we would and think as

looking constantly evaluating we're at Anthony. So and that that,

Clarence Smith

to we me and of all let for add business And we efficiencies. Yes. continue our Anthony, cost areas that, reassess evaluate always -- Steve.

count I was believe this our to So X,XXX. past down quarter, head during

entire down did delivery need demand the distribution the for were particular, and and business, home was there. further expenses. for reduction generally support one in we're came people speaking, portfolio of -- that areas as Most And just so of XX the our versus for in other opportunities we think down, additional year. I in end the of just of lease evaluating

savings we on and Looking areas retail can at where term certain get leases. distribution our all and corporate for leases extend the of

So it's constant process. a

Anthony Lebiedzinski

last before And me others. to for I it question it. pass Got on

today, So given appetite what for price where repurchases? share your share is now your is

Clarence Smith

quarter, for we've got million, a about later we'll sense get and it it Board our Well, every and evaluate got we in quarter. for and makes as $XX every meeting in few this -- meet We've we weeks, now a with us. authority

Operator

Tower from question next is Bugatch Our Budd with Research. Water

Beryl Bugatch

your I -- of Clarence, suppliers? you us challenging that disruption X it you you know seen are you you with to any to if Richard, may to just be these talked any curious color can enough Steve I seeing. supply already. good and of industry for pattern with times seeing Are about know as Clarence, you we've and but expecting that and mentioned weeks more more and the see noted, suppliers, you Steve, your I'm X give got see

Steven Burdette

that I've anything Liggett will seen I It of main product haven't going release. I must about disrupted impact you I in what suppliers. our through little we seen admit can't concerned a industry. the with is there. our our say direct player that's the a main lot was tells flow the industry They're anything suppliers. the But with

Beryl Bugatch

people other also And but February don't don't you about what you you hearing, conjunction significant the mentioned quarter, another things And comment but on cadence real we're and I to like to I seemed just either. to hit with has that, want talked April January on know have you surprise us know air gave and current that pocket. the in and

now affects what you you're seeing how or in So it Haverty's? industry flavor of give the can us or a macro

Steven Burdette

the thing, reasons. year see think and is about tax around slowest anything We've that the other for time, historically and not one, month is a what April than I season, of that is long slowest will because we've day. type One been much of I say April. couple historically, a month both Easter the the of you'll tax different don't of the of because seen if

Clarence Smith

about made And later I know the joke the mean early, we so when and was I coolest comments was Passover on it month. I was Easter you have but and either TSL, what do, doing always never used time. being same April to it

Steven Burdette

behind thing early. Easter good is that the hit Well, it's us.

us, we're on. moving it's and So behind now

Beryl Bugatch

Petersburg? you standpoint? that Just Okay. up St. open from do When curious

Steven Burdette

Labor Budd, third Hoping get mid-third we're quarter. hoping before to quarter, Day.

Clarence Smith

of to from All the approvals difficult it problems as just been you getting get. know, the how have Florida, is

Steven Burdette

understand. I remark. that double We

Clarence Smith

our were We quickly different. to a Right. Florida very open little able is but outside store Memphis,

Beryl Bugatch

last Richard, and cost the detail got I Are issues thank on all way color We're help expense And paid. for and are worrisome? you for any are that the you seeing the gave, you issue the helpful me, understand rate really side, for furniture to people the to retail. structure of and people you. starting very that's see

So -- what color that you're I'm that. how or curious you're you give if can seeing us on

Richard Hare

night. Yes. nothing I say me really at just would up keeps that

inflationary our low opening your Just his they're digits. in we've locked think, increases, remarks standard Steve, freight it but single contracts. that mentioned I in

things So cost other a but to at find we've to levels historical there. probably more issue cost business we'll is, continuously and are look to got efficiencies, guess a way continue behind But much so problem revenue do us that. I but it's back not we and that the with areas

Beryl Bugatch

any freight the issue oceans turmoil in And Baltimore the any giving you problems? of the -- any and or

Steven Burdette

not port. No, the Budd. we Baltimore We're -- use not do

all extending we customers. -- time different a any lead what's disruptions. impact going that on path. overseas, to diverted caused And weeks, where us not We going movement Sea Red that's will it for a but couple and any plan already not that, of know not us of the the our cause the It's is. by going that, and is So around has that it in just

to impact customers. So our -- no from disruptions there

Beryl Bugatch

year beyond. of Thank the this much wishes and you on and balance very best of

Steven Burdette

you, Budd. Thank

Operator

Fernandez Our next Telsey question from Cristina with Group. is the

Cristina Fernandez

out at a revenue less worse but some in on, the I the like as were or about wanted of you business, business. and bit maybe guidance? quarter challenges to progressed, companies going the the industry ask in about assumptions -- And some seems you the little the better, can order touch talked same industry got behind trends time, the Clarence, it

expect first closer some So as to demand this inflection or should do similar be you year? saw the an we in trends in could there think we're at getting where quarter that we point point

Clarence Smith

written expect better be said definitely long will and in know if we're that the have that think things is down business the we marketplace. up. for from that It be Fed what don't thought from the we're that hearing a softening Well, I difficult. second We've we I would in half. been feeling or time

don't I in -- we're and going to point where be think players. have heard -- same other don't be the anytime soon. will we positive to from real industry. less we think I the I thing but it see visibility think I seeing But down, it's positive haven't anything the

it's it's end across better board, I lower the the now in market, of the think It's mean, I moved I the hit. end mentioned. it as of into now And frankly. started the market.

I to I everywhere. will lot sales. place. and turns with hope is release of resonate people that, new around happen. trend some a certainly that a that hope it new the talked new think help And certainly think Steve of it's to We're in a it's that marketing But retail positioned do we things about and merchandise soon. hit I that not

Cristina Fernandez

seems that And sense. makes that consistent what hearing. we're Yes,

traditionally too to do the on like forward? medium channels change are addition more going marketing using. you the need marketing? print, efficiencies Can I print? to digital perhaps side. a TV follow some of up to Are but going or in else versus of that point you've on don't like versus much been market-specific I Anything that guess, see to the, what other been we wanted you're on what's I So or in think you going with the you've to what kind Steve, changing doing where expand

Steven Burdette

will hand, that's be the to But at example, and it on not looking Memorial now of To type table. for and I I it things. most those the obviously, starting on done The me, obviously, are the going quarter villages, we're mean because mean Christina, it marketing just focused our mentioned around those we of all one Day. will yet. by we're different big haven't for our play just Atlanta we're exciting than be market. you and that things things. advertising

there could In we we be markets, may more -- doing some use will yes, in markets, So print. be some broadcast.

individually create we We to attack more drive get it our can and and how awareness stores. to people the will it at into to funnel look them

So changes report there'll that it. we it, are had forward excited that executing be making but different from They on. to as go are are more been on about with we our approach that we

And the so forward. as that's what we'll have results goes it to see

Cristina Fernandez

And the the question last was I on had merchandising.

there about the talk Or of expansion doing? call, lower how introduction year? initiatives can on early last how So the some comments was category. reads, merchandising for that's any that the track rest Any we and the of other and

Clarence Smith

an half results a from less things It's and got our it in pits Well, results. about with and stores. very It's groups stores, got all see some it in and We is glad early perspective, X not little to outdoor we fire the It's have than some now. it. our were in different it. been We've but early positive.

special an not if well. they it's It that strength, about up order talked seeing was a upholstery. business need that do continues we're up. customer's can That to to that. perspective, trend continues From So category assortment huge a I obviously, in enough request assortment, but XX.X%. satisfy we

say, customers it. of pretty bedding than had would has that been able the the room provide been softer of able we're are to So and we're of we struggle, a our dining I Bedroom, what side a our options stable, offer first hoped been about very little right excited from and bit in designers had to and quarter now. things, that

gives do have that. in we you now. We're lot We've So that of gotten that overview. an of coming. kind product into back But a new of kind cadence

about are and flowing product we're new excited merchants it. in, Our

excited Our teams it because, obviously, that our choices new gives are customers. about for

Operator

further at turn this time. back I'd Hare no questions call like for to are closing comments. Richard to the There

Richard Hare

we this call, your and participation the Well, year. look in to forward to release and results for quarter future we you our thank we talking in you later when today's second appreciate

Operator

Thank today's concludes you. conference. This

this You lines at may disconnect your time.

Haverty Furniture Companies (HVT) 2 May 242024 Q1 Earnings call transcript