by Company remains profitable and looks to grow in the coming months as it continues to expand its store footprint
ATLANTA — Retailer Havertys Furniture had declines in Q2 and first-half net revenues and net income as it continues to weather the slowdown at retail that’s impacting the entire industry.
For its second quarter ended June 30, the Home News Now 125 retailer reported sales of $178.6 million, down 13.4% from $206.3 million the same period last year. Net income totaled $4.4 million, or 27 cents per share, compared with $11.8 million, or 70 cents per share, last year.
The company also reported that same-store sales were down 13.6% for the quarter and total written sales were down 15.2%. Written same-store sales declined 15.8% for the quarter.
In addition, the company noted that gross profit margins decreased to 60.4% in 2024 from 60.5% in 2023. It attributed the decrease to a change in a Last in First Out reserve, which it said generated an immaterial impact on gross profit in 2024 compared to a positive impact of $3.4 million in 2023.
Havertys Chairman and CEO Clarence H. Smith noted that the company’s teams continue to evaluate all aspects of the business — from top-line growth to operating efficiencies and cost reductions — during this challenging time for the industry.
“Our experience informs these decisions, and we are mindful of measures taken in the near-term and their potential impact on the Havertys brand,” he said.
He also noted that the company is adding a second store in the Indianapolis market in a former Bed Bath & Beyond location in Greenwood, Indiana, that is expected to open in the fourth quarter of this year.
“Our store growth strategy is on track with plans to open a net of five new stores in 2024 and 2025,” Smith said. “Havertys’ strong financial position enables us to make important investments during demand downturns as others retrench. These forward-looking preparations enhance our opportunities for greater success when the economic cycle improves.”
The company also reported that during the quarter, SG&A expenses were 57.7% of sales versus 53.3% the same period last year, representing a decrease of $6.9 million. It attributed this to a $3.5 million decrease in warehouse and delivery costs related to reduced labor costs and lower expenditures for supplies and fuel; a $3.3 million decrease in selling expenses that it said are predominantly variable costs tied to commission-based compensation and third-party creditor costs; a $1.6 million decrease in administrative expenses largely due to lower stock compensation costs and a $1.3 million decrease in advertising expenses driven by reduced spending on television and interactive marketing.
This was offset by a $2.8 million increase in occupancy costs because of a reduction in 2023 rent expenses for a $1.8 million lease incentive payment.
For the first half, the company reported net sales of $362.6 million, down 15.9% from the $431 million reported the same period last year. Net income in the first half was $6.8 million, or 41 cents per share, compared with $24.2 million, or $1.44 per share, the same period last year.
Other highlights of the Q2 report are as follows:
+ The company reported cash, cash equivalents and restricted cash equivalents of $116.1 million as of June 30, 2024.
+ The retailer also said it generated $17.5 million in cash from operating activities, primarily from earnings and changes in working capital including a $1.6 million reduction in inventories, $2.9 million increase in customer deposits and a $10.2 million decrease in accrued liabilities and vendor repayments.
+ It also said it invested $16.0 million in capital expenditures and paid $10.1 million in quarterly cash dividends.
+ The company reported no debt outstanding as of June 30, 2024, and credit availability of $80.0 million.
