Haverty Furniture Companies, Inc. (HVT) Q4 2024 Earnings Call Transcript

For the period ending December 31, 2024

February 25, 2025 10:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to Havertys' Fourth Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief 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 your host, Richard Hare, Chief Financial Officer. Thank you, sir. You may begin.

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 the date they are made, in which we undertake no obligation to publicly update or revise. Factors that could cause actual results to differ, including economic and competitive conditions and other uncertainties detailed in the company's reports filed with the SEC.

Our President and CEO, Steve Burdette, will now provide additional commentary about the quarter.

Steve Burdette

Good morning. Thank you for joining our 2024 fourth quarter and full year conference call. Our fourth quarter sales were $184.4 million, which was down 12.5% with comps down 13.7%. Total written sales were down 6.7% with comps down 8.7%. Total sales for the year were down 16.1% to $722.9 million and comps were down 16.7%.

Gross margins did remain strong for the company, coming in at 61.9% for the quarter and 60.7% for the year. Our pretax profit for the quarter was $9.6 million or 5.2% operating margin, and for the year, we produced a $26.2 million pretax profit or 3.6% operating margin. We ended the year with zero funded debt and over $120 million in cash.

The interest rate cuts late in Q3 and in Q4 have not translated into lower mortgage rates. In fact, we have seen mortgage rates rise, continuing to put in question the affordability of the housing market. Getting the elections behind us was a positive lift as we saw traffic improve over the quarter, which gave us our first positive gain year-over-year in traffic and was low single digits for the quarter. Conversion rates stabilized over the quarter as we saw written sales improve throughout the quarter.

Average ticket rose during the quarter by approximately 4% to just under $3,400. Our design business continued to improve during the quarter to approximately 32% of our business or 15.5% of our tickets, driven by our special order business. Our designer average ticket grew to over $7,200, which was up over 8%.