Haverty Furniture Companies, Inc. (NYSE:HVT) Q2 2022 Earnings Conference Call August 3, 2022 10:00 AM ET

Company Participants

Richard Hare – Chief Financial Officer

Clarence Smith – Chairman and Chief Executive Officer

Steve Burdette – President

Conference Call Participants

Anthony Lebiedzinski – Sidoti

Operator

Good day, ladies and gentlemen, and welcome to the Havertys Reports Operating Results for Second Quarter 2022 Conference Call. All lines have been placed on a listen-only mode. [Operator Instructions]

At this time and it’s my pleasure to turn the floor over to your host Richard Hare, Chief Financial Officer. Sir, the floor is yours.

Richard Hare

Thank you, Operator. During this conference call, we’ll make forward-looking statements, which are subject to risks and uncertainties. Actual results may differ materially from those made or implied in such statements, which speak only as of the date they are made and which we undertake no obligation to publicly update or revise.

Factors that could cause actual results to differ include economic and competitive conditions and other uncertainties detailed in the company’s reports filed with the SEC. Our Chairman and CEO, Clarence Smith, will now give you an update on our results and then our President; Steve Burdette will provide additional commentary about our business.

Clarence Smith

Good morning. Thank you for joining our 2022 second quarter conference call. We’re very pleased to report a record Q2 sales performance of $253 million and earnings per share of a $1.27, 5% over last year.

The second quarter was the fourth best earnings performance in the company’s history. Our team has produced seven straight record sales quarters, going back to the fourth quarter of 2020. We continue our $1 billion annual sales pays that we reached in 2021.

We believe that our target customer located in the fastest growing markets in the country has been impacted less than the more price sensitive promotional customer base. We’ve seen a slowdown in store traffic, which is hit written orders, but we feel that we’re very well positioned with a strong backlog of orders to provide and build profitable market share in our regions.

We’ve changed our business model since pre-COVID. Our store count and retail square footage is level with 2019. However, our productivity measured by sales per employee is up 61%, because we’ve been able to deliver more sales volume with fewer team members compared to 2019.

In the second quarter, our written sales are 23.2% up over 2019. Average sale ticket is up 39% with a higher closing rate. Traffic is down double-digit compared with Q2 2019 and units are down compared to Q2 2019. But with the average ticket, over $3,000 with a higher closing rate and a 58% gross margin, we are producing record profits.