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Retail

Havertys Reports Operating Results for First Quarter 2025

The retailer reports solid first quarter results with improved gross margins, earnings, and expense control, despite facing several headwinds, including a weak housing market, atypical winter weather in the South, low consumer confidence, and significant shifts in trade policy.

5/1/2025
ATLANTA, Ga. --  HAVERTYS (NYSE:HVT)  reported operating results for the first quarter ended March 31, 2025.

First quarter 2025 versus first quarter 2024:

Diluted earnings per common share ("EPS") of $0.23 versus $0.14.

Consolidated sales decreased 1.3% to $181.6 million. Comparable store sales decreased 4.8%.

Gross profit margin was 61.2% compared to 60.3%.

Steven G. Burdette, President and CEO said, "We are pleased to report solid first quarter results with improved gross margins, earnings, and expense control, despite facing several headwinds, including a weak housing market, atypical winter weather in the South, low consumer confidence, and significant shifts in trade policy.

Throughout our 140-year history, we have consistently demonstrated resilience in navigating changes in U.S. economic policy. This experience, along with our solid balance sheet, has equipped us to effectively manage the dynamic U.S. trade policy environment while continuing to serve our customers and deliver value to our shareholders."

First Quarter ended March 31, 2025 Compared to Same Period of 2024

Total sales down 1.3%, comp-store sales down 4.8% for the quarter. Total written business was down 2.6% and comp-store written business declined 6.3% for the quarter.

Design consultants accounted for 33.2% of written business in 2025 and 32.4% in 2024.

Gross profit margins increased to 61.2% in 2025 from 60.3% in 2024.

SG&A expenses were 59.0% of sales versus 59.4% and decreased $2.2 million. The primary drivers of this change are:

decrease of $2.0 million in selling expenses as these are predominantly variable costs tied to commissioned-based compensation expense and third-party creditor costs.

decrease in warehouse and delivery costs of $1.7 million driven by lower salaries and related benefit costs.

decrease in advertising costs of $1.1 million aligning with the reduction of sales.

increase in occupancy costs of $1.6 million largely due to costs related to new locations.

increase in administrative expenses of $1.0 million primarily from increased salaries and stock compensation costs.

Balance Sheet and Cash Flow for the Three Months Ended March 31, 2025

Cash, cash equivalents, and restricted cash equivalents at March 31, 2025 are $118.3 million.

Generated $6.2 million in cash from operating activities primarily from earnings and changes in working capital including a $5.3 million increase in inventories, $2.0 million increase in customer deposits, and a $4.5 million decrease in accrued liabilities and vendor repayments.

Invested $6.1 million in capital expenditures.

Purchased approximately 94,000 shares of common stock for $2.0 million.

Paid $5.2 million in quarterly cash dividends.

No debt outstanding at March 31, 2025, and credit availability of $80.0 million.

Expectations and Other

Our 2025 guidance includes tariffs currently in effect as of April 30, 2025, but excludes the effects of additional proposed tariffs that have been paused by the Trump Administration. We are closely monitoring the tariff negotiations and evaluating the impact to minimize the effects on our business.

Our expectations for gross profit margins for 2025 are unchanged from our prior guidance and are between 60.0% to 60.5%. Gross profit margins fluctuate quarter to quarter in relation to our promotional cadence.

Fixed and discretionary expenses within SG&A for the full year of 2025 are expected to be in the $291.0 to $293.0 million range, unchanged from our previous guidance. Variable SG&A expenses for the full year of 2025 are anticipated to be in the 18.6% to 19.0% range, a decrease from our previous guidance driven by lower warehouse and delivery costs and third-party credit expense.

Our effective tax rate for 2025 is expected to be 26.5%, excluding the impact from discrete items and any new tax legislation.

Planned capital expenditures for the full year of 2025 are approximately $24.0 million, a $3 million decrease from our previous guidance due to tariff uncertainty. We expect retail square footage will increase approximately 2.0% in 2025 over 2024.

See full release here.
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