by Design consultants grow in importance to overall sales, representing nearly 32% of written business
ATLANTA — Facing an ongoing housing slowdown that has impacted both new and existing home sales, Havertys reported a drop in sales and net income for its fourth quarter and full year ended Dec. 31.
The company reported Q4 consolidated sales of $184 million, down 12.5% from $210.7 million the same period last year. Comparable-store sales decreased 13.7%.
It also reported net income of $8.2 million, or 49 cents per share, compared with $15 million, or 90 cents per share, for the same period last year.
Its gross profit margin for the quarter totaled 61.9% based on a gross profit of $114.2 million compared with 62.4% and a gross profit of $131.4 million a year earlier.
For the quarter, the company said that SG&A expenses were $105.8 million, or 57.4% of sales, versus $114.7 million, or 54.4% of sales, a year earlier, a decrease of $8.9 million. It attributed the change to:
+ A $4.3 million decrease in selling expenses related to lower commissioned-based compensation and third-party credit costs.
+ A $3.3 million decrease in warehouse, transportation and delivery costs related to reduced labor and fuel costs.
+ A $1.7 million decrease in administrative expenses related to lower incentive and stock-based compensation costs.
+ A $1.1 million increase in occupancy expenses primarily related to depreciation expense.
For the full year, consolidated sales totaled $722.9 million, down 16.1% from $862.1 million in 2023. Comparable-store sales decreased 16.7%.
Net income for the full year totaled $20 million, or $1.19 per share, compared with $56.3 million, or $3.36 per share, in 2023. The company reported a gross profit margin of 60.7%, based on gross profits of $439.1 million, compared with a gross profit margin of 60.7% based on gross profits of $523.1 million in 2023.
For the full year, SG&A expenses were $419.2 million, or 58% of sales, compared with $455.8 million, or 52.9% of sales, last year.
“Our team remained disciplined in managing our operations and executing our growth strategies, even amidst the housing slowdown,” said Havertys President and CEO Steven G. Burdette. “We achieved our goal of opening five net new stores in 2024, with a notable return to the Houston, Texas, market after approximately 40 years, where we now have two stores.”
“In 2024, we returned $25.5 million of capital to our shareholders,” he added. “We purchased $5.0 million in common shares and paid quarterly dividends of $20.5 million, marking another year of annual dividend payouts. Our prudent capital management underscores our dedication to delivering value to our shareholders.
“As we celebrate our 140th year, we remain focused on our strategies for store growth, merchandising and marketing, which are key to Havertys’ long-term success. Our strong balance sheet and financial stability provide a solid foundation for continued growth investment, positioning us to benefit when the economic cycle improves.”
Other highlights of the report were as follows:
+ The company said that total written sales were down 6.7% and written comp-store sales declined 8.7% for the quarter.
+ Design consultants accounted for 31.8% of written business in 2024 compared with 29.2% in 2023.
+ The company reported cash, cash equivalents and restricted cash equivalents of $126.3 million as of Dec. 31, 2024.
+ It reported generating $58.9 million in cash from operating activities primarily from earnings and changes in working capital, including a $10.5 million decrease in inventories, a $4.9 million increase in customer deposits, a $7.1 million decrease in other assets and liabilities and an $11.4 million decrease in accrued liabilities and vendor repayments.
+ The company said it invested $32.1 million in capital expenditures.
+ It purchased 214,500 shares of common stock for $5 million and paid $20.5 million in quarterly cash dividends in 2024.
+ The company reported no debt outstanding as of Dec. 31, 2024, and said its credit availability totaled $80 million.
Looking forward, it said it anticipates:
+ Gross profit margins for 2025 will be between 60% and 60.5%. “Gross profit margins fluctuate quarter to quarter in relation to our promotional cadence,” the company said. “Our estimated gross profit margins for 2025 are based on anticipated product and freight costs and the marginal impact on our LIFO reserve as compared to the prior years.”
+ Fixed and discretionary expenses within SG&A for the full year of 2025 are expected to be in the $291 to $293 million range. “The increases over 2024 are primarily from costs associated with our store growth and inflation.”
+ Variable SG&A expenses for the full year of 2025 are expected to be in the 19% to 19.3% range. Variable expense increases over 2025 are primarily inflationary driven.
+ An effective tax rate for 2025 is expected to be 26.5% excluding the impact of discrete items and any new tax legislation.
+ Planned capital expenditures are estimated at $27.1 million in 2025.
