Haverty Furniture Companies, Inc. (NYSE:HVT) Q3 2023 Earnings Conference Call November 2, 2023 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 & Company

Michael Legg – The Benchmark Company

Cristina Fernández – Telsey Group

Budd Bugatch – Water Tower Research

Operator

Greetings, and welcome to Haverty’s Third Quarter 2023 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Richard Hare, Chief Financial Officer. Thank you. You may begin.

Richard Hare

Thank you, operator, and good morning. During this conference call, we will 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 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 our President, Steve Burdette, will provide some additional commentary about our business.

Clarence Smith

Thank you for joining our third quarter conference call. Our net sales of $220.3 million were down 19.7% over last year with comparable store sales down 20.7%. Total written sales were down 11.5% and written comp-store sales declined 12.6%. These trends reflect the strong deliveries of backordered goods last year and the current difficult headwinds and the shift in consumer spending and housing declines related to elevated mortgage rates. Our Q3 delivered sales compared to Q3 of 2019 pre-COVID were up 5.3%.

This quarter, our teams did a fine job in expense control, improving gross margins, managing inventories and executing high-quality service, which helped produce double-digit pretax margins of 10.4% or $22.9 million. Our growing design service with special order and custom upholstery continues to separate us from the more promotional players in the industry. Our relationships and partnerships throughout the industry, both domestic and international, have helped us develop terrific merchandise values, which we believe is gaining share in building our reputation as a top-quality home furnisher.

Several of our merchandising team recently returned from the international home furnishings market in High Point, followed by a trip to visit our key case goods suppliers in Vietnam. John Gill, Executive Vice President of Merchandising led these trips and reports that while orders are significantly down in the factories in these factories, Haverty’s is moving exciting new collections through production to ship before Chinese New Year. I believe that our long-term relationships and partnerships are major strength across the industry.