ATLANTA, GA / ACCESS Newswire / October 1, 2025 / HAVERTY FURNITURE COMPANIES, INC. (NYSE:HVT and HVT.A) announced today that Steven Burdette, President and CEO, and Richard Hare, Executive Vice President and CFO, will participate in the 2025 Global Consumer & Retail Conference hosted by Telsey Advisory Group in collaboration with Santander Corporate & Investment Banking on October 8th, 2025. ...

Summary of Haverty Furniture Companies Conference Call Company Overview - **Company Name**: Haverty Furniture Companies, Inc. (NYSE: HVT) - **Established**: 140 years ago - **Store Count**: 129 stores across 17 states, primarily in Florida, Texas, and Georgia [4][5] - **Target Customer**: Female, aged 35-55, married, college-educated, with household income above $150,000 [4] Business Strategy and Operations - **Distribution Centers**: Operates seven distribution centers located in Dallas, Texas; Braselton, Georgia; and Lakeland, Florida, with four cross-docks in various states [4] - **Store Growth**: Aims to open five stores annually but will only open three this year, resulting in a net of 129 stores by year-end [5] - **Product Mix**: Positioned in the upper middle segment, competing with brands like Crate & Barrel and Pottery Barn [6] - **Design Services**: Design services account for about one-third of business volume, with an average ticket of $3,400, and $7,600 for design services specifically, growing at 5% [6] Marketing and Customer Engagement - **Media Strategy**: Utilizes broadcast, OTT, and digital platforms, including Instagram and Pinterest, to reach customers [10][11] - **Website Revamp**: Launched a new website in late 2022, which took time to stabilize, but has since seen double-digit organic growth [12][13] - **Regret-Free Guarantee**: Implemented to enhance customer confidence, with no increase in exchange rates or markdowns reported [15][16] Financial Performance - **Credit Program**: Approximately one-third of sales are made through credit, primarily via Synchrony, with high approval ratings [22] - **Capital Allocation**: Planned capital allocation for the year is around $24 million, focusing on new stores and infrastructure [55] - **Dividends**: The company has paid dividends since 1935, with ongoing discussions about special dividends and buybacks [55] Market Conditions and Challenges - **Housing Market**: Currently at a 30-40 year low, impacting store performance; however, the company remains optimistic about future growth [30][31] - **E-commerce Goals**: Aims for e-commerce to reach 10% of total business, currently in low single digits [32][34] - **Tariffs Impact**: Tariffs primarily affect bedroom and dining room categories, with ongoing adjustments to sourcing strategies [36][37] Operational Efficiency - **Staffing Changes**: Reduced headcount from 3,500 pre-pandemic to below 2,400, while maintaining operational efficiency [50][51] - **AI Utilization**: Exploring AI for marketing and operational efficiencies, aiming to grow without increasing headcount [53] Future Outlook - **Growth Strategy**: Focus on expanding in Florida and Texas, with plans for new stores in metropolitan areas and contiguous states [26][29] - **Long-term Goals**: Aiming to return to $1 billion in sales, emphasizing commitment to customer service and operational excellence [57] Key Takeaways - Haverty Furniture Companies is strategically positioned in the furniture market with a focus on design and customer service - The company is navigating current market challenges while planning for future growth and operational efficiency - Strong financial management and a commitment to shareholder returns through dividends and potential buybacks are evident This summary encapsulates the key points discussed during the conference call, highlighting the company's strategic direction, market positioning, and operational insights.

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income statements, and cash flow statements, along with detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time **Condensed Consolidated Balance Sheets (In thousands):** | Item | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :------------ | :---------------- | :----- | :------- | | **Assets** | | | | | | Cash and cash equivalents | $107,357 | $120,034 | $(12,677) | -10.6% | | Inventories | $93,270 | $83,419 | $9,851 | 11.8% | | Total current assets | $236,148 | $238,896 | $(2,748) | -1.1% | | Total assets | $642,672 | $648,747 | $(6,075) | -0.9% | | **Liabilities** | | | | | | Total current liabilities | $130,514 | $131,565 | $(1,051) | -0.8% | | Total liabilities | $337,801 | $341,186 | $(3,385) | -1.0% | | **Stockholders' Equity** | | | | | | Total stockholders' equity | $304,871 | $307,561 | $(2,690) | -0.9% | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section details the company's revenues, expenses, and net income over specific periods **Condensed Consolidated Statements of Comprehensive Income (In thousands, except per share data):** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $181,025 | $178,636 | $362,592 | $362,633 | | Gross profit | $110,102 | $107,984 | $221,185 | $219,003 | | Income before interest and income taxes | $2,834 | $4,986 | $6,873 | $6,626 | | Net income | $2,689 | $4,438 | $6,467 | $6,831 | | Basic earnings per share (Common Stock) | $0.17 | $0.27 | $0.40 | $0.42 | | Diluted earnings per share (Common Stock) | $0.16 | $0.27 | $0.39 | $0.41 | | Cash dividends per share (Common Stock) | $0.32 | $0.32 | $0.64 | $0.62 | - Net sales for the three months ended June 30, 2025, increased by **$2.4 million (1.3%)** compared to the same period in 2024, reaching **$181.0 million**. However, net sales for the six months ended June 30, 2025, were comparable to the prior year period[7](index=7&type=chunk) - Net income decreased for both the three-month period (from **$4.4 million to $2.7 million**) and the six-month period (from **$6.8 million to $6.5 million**) year-over-year[7](index=7&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the cash inflows and outflows from operating, investing, and financing activities **Condensed Consolidated Statements of Cash Flows (In thousands):** | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Net cash provided by operating activities | $13,377 | $17,542 | $(4,165) | | Net cash used in investing activities | $(11,683) | $(15,900) | $4,217 | | Net cash used in financing activities | $(14,237) | $(13,352) | $(885) | | Decrease in cash, cash equivalents, and restricted cash equivalents | $(12,543) | $(11,710) | $(833) | | Cash, cash equivalents, and restricted cash equivalents at end of period | $113,771 | $116,067 | $(2,296) | - Net cash provided by operating activities decreased by **$4.2 million** in the first six months of 2025, primarily due to changes in working capital, including increased inventories and reduced customer deposits[65](index=65&type=chunk) - Cash used in investing activities decreased by **$4.2 million**, driven by lower capital expenditures[66](index=66&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note A - Business and Basis of Presentation](index=7&type=section&id=Note%20A%20-%20Business%20and%20Basis%20of%20Presentation) This note describes the company's business operations and the accounting principles used in preparing the financial statements - Haverty Furniture Companies, Inc. operates as a retailer of residential furniture in the middle to upper-middle price ranges, exclusively under the **Havertys brand**[9](index=9&type=chunk) - The financial statements are unaudited and prepared in accordance with **Form 10-Q instructions and U.S. GAAP**, requiring management estimates and assumptions[9](index=9&type=chunk)[10](index=10&type=chunk) [Note B – Stockholders' Equity](index=8&type=section&id=Note%20B%20%E2%80%93%20Stockholders%27%20Equity) This note details changes in the company's equity accounts, including net income, dividends, and stock transactions **Changes in Stockholders' Equity (Six Months Ended June 30, 2025, in thousands):** | Item | Common Stock | Class A Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total | | :-------------------------------- | :----------- | :------------------- | :------------------------- | :---------------- | :----------------------------------- | :------------- | :------ | | Balances at Dec 31, 2024 | $30,419 | $1,793 | $117,257 | $418,960 | $(869) | $(259,999) | $307,561 | | Net income | — | — | — | $6,467 | — | — | $6,467 | | Dividends declared (Common Stock) | — | — | — | $(9,606) | — | — | $(9,606) | | Dividends declared (Class A Common Stock) | — | — | — | $(747) | — | — | $(747) | | Acquisition of treasury stock | — | — | — | — | — | $(2,000) | $(2,000) | | Balances at Jun 30, 2025 | $30,633 | $1,732 | $120,074 | $415,074 | $(869) | $(261,773) | $304,871 | - Common Stock dividends declared were **$0.64 per share** for the six months ended June 30, 2025, and Class A Common Stock dividends were **$0.60 per share**[13](index=13&type=chunk) - The company repurchased **$2.0 million** of common stock during the first six months of 2025, with no repurchases in the comparable 2024 period[13](index=13&type=chunk)[67](index=67&type=chunk) [Note C – Interim LIFO Calculations](index=10&type=section&id=Note%20C%20%E2%80%93%20Interim%20LIFO%20Calculations) This note explains the interim valuation method for inventories using the LIFO method and its inherent estimates - Inventories are valued using the **last-in, first-out (LIFO) method** with an annual LIFO index[15](index=15&type=chunk) - Interim LIFO calculations rely on management's estimates of year-end inventory and inflation/deflation rates, making them subject to change based on final year-end valuation[15](index=15&type=chunk) [Note D – Fair Value of Financial Instruments](index=11&type=section&id=Note%20D%20%E2%80%93%20Fair%20Value%20of%20Financial%20Instruments) This note discusses the fair value measurements for various financial instruments, primarily short-term assets and liabilities - Fair values of cash, restricted cash, accounts payable, and customer deposits approximate their carrying values due to their **short-term nature**[16](index=16&type=chunk) - Assets for self-directed, non-qualified deferred compensation plans are valued using **Level 1 quoted market prices**[16](index=16&type=chunk) [Note E – Credit Agreement](index=11&type=section&id=Note%20E%20%E2%80%93%20Credit%20Agreement) This note outlines the terms of the company's revolving credit facility, including its availability and maturity - The company has an **$80.0 million revolving credit facility**, secured primarily by inventory, maturing on **October 24, 2027**[17](index=17&type=chunk)[61](index=61&type=chunk) - As of June 30, 2025, there were **no outstanding borrowings**, and the net availability under the credit agreement was **$80.0 million**[18](index=18&type=chunk)[61](index=61&type=chunk) [Note F – Revenues and Segment Reporting](index=11&type=section&id=Note%20F%20%E2%80%93%20Revenues%20and%20Segment%20Reporting) This note details revenue recognition policies, customer deposits, and the company's single reportable segment structure - Revenue from merchandise sales and related service fees is recognized upon **delivery to the customer**, net of expected returns and sales tax[19](index=19&type=chunk) - Customer deposits were **$39.4 million** at June 30, 2025, a decrease from **$40.7 million** at December 31, 2024[19](index=19&type=chunk) **Net Sales Disaggregated by Product Category (In thousands):** | Product Category | Three Months Ended June 30, 2025 (Net Sales) | Three Months Ended June 30, 2024 (Net Sales) | Six Months Ended June 30, 2025 (Net Sales) | Six Months Ended June 30, 2024 (Net Sales) | | :----------------------- | :------------------------------------------- | :------------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Case Goods | $57,561 | $58,408 | $115,613 | $117,493 | | Upholstery | $80,884 | $78,273 | $162,300 | $161,208 | | Mattresses | $16,525 | $16,640 | $32,329 | $33,240 | | Accessories and Other | $26,055 | $25,315 | $52,350 | $50,692 | | **Total Net Sales** | **$181,025** | **$178,636** | **$362,592** | **$362,633** | - The company operates within a **single reportable segment**, with an executive committee serving as the chief operating decision maker (CODM) and assessing performance based on income before income taxes[21](index=21&type=chunk)[22](index=22&type=chunk) [Note G – Leases](index=12&type=section&id=Note%20G%20%E2%80%93%20Leases) This note describes the company's operating lease arrangements, including terms, payments, and related expenses - The company holds operating leases for various real estate and equipment, with remaining terms of **1 to 15 years** and options to extend up to **20 years**[25](index=25&type=chunk) - Variable lease payments, typically based on sales volume or asset usage, are not included in the initial measurement of right-of-use assets or lease liabilities and are expensed when incurred[26](index=26&type=chunk)[27](index=27&type=chunk) **Lease Expense (In thousands):** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $12,550 | $12,092 | $24,884 | $24,338 | | Variable lease cost | $1,311 | $1,388 | $2,613 | $2,762 | | **Total lease expense** | **$13,861** | **$13,480** | **$27,497** | **$27,100** | [Note H – Income Taxes](index=13&type=section&id=Note%20H%20%E2%80%93%20Income%20Taxes) This note explains the effective tax rate, its drivers, and the expected impact of recent tax legislation - The effective tax rate for the six months ended June 30, 2025, was **32.8%**, an increase from **29.2%** in the prior year, mainly due to nondeductible items and tax expense from vested stock awards[29](index=29&type=chunk) - The **One Big Beautiful Bill Act (OBBBA)**, enacted on July 4, 2025, is not expected to have a material impact on the consolidated financial statements[30](index=30&type=chunk) [Note I – Stock-Based Compensation Plans](index=14&type=section&id=Note%20I%20%E2%80%93%20Stock-Based%20Compensation%20Plans) This note summarizes activity for service-based and performance-based restricted stock awards and related compensation costs **Stock Award Activity (Six Months Ended June 30, 2025):** | Item | Service-Based Restricted Stock Awards (Shares or Units) | Performance-Based Restricted Stock Awards (Shares or Units) | | :-------------------------------- | :---------------------------------------------------- | :------------------------------------------------------ | | Outstanding at December 31, 2024 | 250,575 | 276,098 | | Granted/Issued | 213,750 | 153,948 | | Awards vested or rights exercised | (151,938) | (91,804) | | Forfeited | (10,102) | (4,577) | | Adjustment of units based on performance | — | (65,364) | | Outstanding at June 30, 2025 | 302,285 | 268,301 | - The total fair value of service-based restricted stock awards that vested was approximately **$2.9 million**, and performance-based awards was approximately **$2.1 million**, for the six months ended June 30, 2025[32](index=32&type=chunk)[33](index=33&type=chunk) - Total compensation cost related to unvested equity awards was approximately **$9.8 million** as of June 30, 2025, to be recognized over a weighted-average period of **two years**[34](index=34&type=chunk) [Note J – Earnings Per Share](index=15&type=section&id=Note%20J%20%E2%80%93%20Earnings%20Per%20Share) This note details the calculation of earnings per share using the two-class method, considering different stock classes - Earnings per share are reported using the **two-class method**, assuming 100% of earnings are distributed as dividends based on contractual rights[36](index=36&type=chunk) - Common Stock has a preferential dividend rate of at least **105%** of the dividend paid on Class A Common Stock. Class A Common Stock holders have greater voting rights and can convert to Common Stock on a one-for-one basis[37](index=37&type=chunk) **Earnings Per Share (Common Stock):** | EPS Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS (Common Stock) | $0.17 | $0.27 | $0.40 | $0.42 | | Diluted EPS (Common Stock) | $0.16 | $0.27 | $0.39 | $0.41 | | Basic EPS (Class A Common Stock) | $0.15 | $0.25 | $0.37 | $0.39 | | Diluted EPS (Class A Common Stock) | $0.15 | $0.25 | $0.37 | $0.39 | [Note K – Contingencies](index=16&type=section&id=Note%20K%20%E2%80%93%20Contingencies) This note addresses the company's involvement in legal proceedings and their potential financial impact - The company is involved in various claims and legal proceedings arising in the **ordinary course of business**[39](index=39&type=chunk) - No pending claims or legal proceedings are currently believed to be reasonably likely to have a **material adverse effect** on the company's financial condition, results of operations, or cash flows[39](index=39&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, liquidity, and capital resources [Forward-Looking Statements and Risk Factors](index=17&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This subsection outlines the nature of forward-looking statements and lists various risks that could affect future results - Statements about future estimates, expectations, beliefs, intentions, projections, or strategies are considered **forward-looking statements**, subject to inherent uncertainties and risks[41](index=41&type=chunk)[42](index=42&type=chunk) - - Competition from national, regional, and local retailers[44](index=44&type=chunk) - Ability to anticipate changes in consumer preferences and implement growth strategies[44](index=44&type=chunk) - Risks in the supply chain, including cost volatility of raw materials, dependence on third-party producers, and transportation[44](index=44&type=chunk) - Impact of labor disruptions, shortages, and ability to attract/retain key employees[44](index=44&type=chunk) - Vulnerability of information technology infrastructure to cyber-attacks[44](index=44&type=chunk) - Changes in general domestic and international economic conditions (inflation, interest rates, recessions)[44](index=44&type=chunk) - Pending or unforeseen litigation[44](index=44&type=chunk) [Impact of tariffs imposed by the U.S government](index=18&type=section&id=Impact%20of%20tariffs%20imposed%20by%20the%20U.S%20government) This subsection discusses the new U.S. tariffs on imported goods and the company's assessment of their impact - New U.S. tariff rates, ranging from **10% to 41%**, will be imposed on imports from over **67 countries**, effective **August 7, 2025**[47](index=47&type=chunk) - Tariffs for Chinese goods remain at **55%** and are part of ongoing discussions. Canada faces increased tariffs on certain non-compliant goods[47](index=47&type=chunk) - The company is actively monitoring developments and evaluating mitigation strategies to assess the impact on its supply chain and cost structure[47](index=47&type=chunk) [Net Sales](index=18&type=section&id=Net%20Sales) This subsection analyzes the company's net sales performance, including total and comparable-store sales, for recent periods **Net Sales and Comp-Store Sales Performance (In millions):** | Period | Net Sales (Total) 2025 | Net Sales (Total) 2024 | Comp-Store Sales 2025 | Comp-Store Sales 2024 | | :----- | :--------------------- | :--------------------- | :-------------------- | :-------------------- | | Q1 | $181.6 | $184.0 | (4.8)% | (18.5)% | | Q2 | $181.0 | $178.6 | (2.3)% | (13.6)% | | YTD Q2 | $362.6 | $362.6 | (3.5)% | (16.2)% | - Net sales for Q2 2025 increased by **$2.4 million (1.3%)** compared to Q2 2024, while comp-store sales decreased by **$4.0 million (2.3%)**[49](index=49&type=chunk) - For the first six months of 2025, net sales were comparable to 2024, but comp-store sales decreased by **$12.8 million (3.5%)**[50](index=50&type=chunk) - Design consultants contributed **33.4%** of total written sales in Q2 2025 (down from 36.0% in Q2 2024), with a higher average written ticket of **$7,631** (up from $7,260)[51](index=51&type=chunk) [Gross Profit](index=19&type=section&id=Gross%20Profit) This subsection examines the company's gross profit and margin, highlighting factors influencing changes - Gross profit margin for Q2 2025 was **60.8%**, up **40 basis points** from 60.4% in Q2 2024[53](index=53&type=chunk) - For the first six months of 2025, gross profit margin was **61.0%**, up **60 basis points** from 60.4% in the same period of 2024[53](index=53&type=chunk) - The increase in gross profit margin is primarily attributed to **product selection, merchandise pricing, and mix**[53](index=53&type=chunk) [Selling, General and Administrative Expenses](index=19&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) This subsection details the trends and components of SG&A expenses and their impact on profitability - SG&A expenses as a percentage of sales increased to **59.3%** for Q2 2025 (up from 57.7% in Q2 2024) and **59.2%** for the first six months of 2025 (up from 58.6% in 2024)[55](index=55&type=chunk)[56](index=56&type=chunk) - - Q2 2025 SG&A increased by **$4.2 million (4.1%)**, driven by administrative (**$3.4 million**), occupancy (**$1.5 million**), and advertising (**$1.1 million**) costs, partially offset by decreased warehouse and delivery costs (**$1.1 million**)[55](index=55&type=chunk) - First six months of 2025 SG&A increased by **$2.1 million (1.0%)**, driven by administrative (**$4.5 million**) and occupancy (**$3.1 million**) costs, offset by decreased warehouse and delivery (**$2.8 million**) and selling expenses (**$2.7 million**)[56](index=56&type=chunk) **SG&A Expenses by Classification (In thousands):** | Classification | Three Months Ended June 30, 2025 | % of Net Sales 2025 | Three Months Ended June 30, 2024 | % of Net Sales 2024 | Six Months Ended June 30, 2025 | % of Net Sales 2025 | Six Months Ended June 30, 2024 | % of Net Sales 2024 | | :----------------------- | :------------------------------- | :------------------ | :------------------------------- | :------------------ | :----------------------------- | :------------------ | :----------------------------- | :------------------ | | Variable | $33,353 | 18.4% | $34,746 | 19.4% | $67,000 | 18.5% | $71,732 | 19.8% | | Fixed and discretionary | $73,980 | 40.9% | $68,353 | 38.3% | $147,535 | 40.7% | $140,723 | 38.8% | | **Total SG&A** | **$107,333** | **59.3%** | **$103,099** | **57.7%** | **$214,535** | **59.2%** | **$212,455** | **58.6%** | [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) This subsection assesses the company's cash position, credit facilities, and ability to meet financial obligations - As of June 30, 2025, the company had **$107.4 million** in cash and cash equivalents and **$6.4 million** in restricted cash equivalents[60](index=60&type=chunk) - The company believes its current cash, operating cash flow, credit agreement, and access to debt markets are sufficient for operating requirements, capital expenditures, dividends, and lease obligations[60](index=60&type=chunk) - Net cash provided by operating activities decreased by **$4.2 million** to **$13.4 million** in the first six months of 2025, primarily due to increased inventories and reduced customer deposits[65](index=65&type=chunk) - Cash used in investing activities decreased by **$4.2 million** due to lower capital expenditures, and cash used in financing activities increased by **$0.9 million** due to **$2.0 million** in common stock repurchases[66](index=66&type=chunk)[67](index=67&type=chunk) [Store Plans and Capital Expenditures](index=21&type=section&id=Store%20Plans%20and%20Capital%20Expenditures) This subsection outlines the company's plans for new store openings, relocations, closures, and related capital spending **Store Plans (Actual or Planned Opening Quarter):** | Location or Market | Opening Quarter | Category | | :----------------- | :-------------- | :--------- | | Houston, TX | Q1-25 | Open | | Daytona, FL | Q2-25 | Relocation | | Atlanta, GA | Q2-25 | Closure | | Waco, TX | Q3-25 | Closure | | Houston, TX | Q4-25 | Open | | St. Louis, MO | Q1-26 | Open | | Nashville, TN | Q2-26 | Open | | Houston, TX | Q3-26 | Open | | Houston, TX | Q4-26 | Open | - The company anticipates ending 2025 with a total of **129 stores**, assuming new store openings proceed as planned[68](index=68&type=chunk) [Critical Accounting Estimates](index=21&type=section&id=Critical%20Accounting%20Estimates) This subsection discusses accounting estimates requiring significant judgment and their potential impact on financial reporting - Critical accounting estimates require significant, subjective, or complex judgments, often involving inherently uncertain matters[69](index=69&type=chunk) - Management concluded that no accounting estimates were deemed critical for the periods presented, and there have been no significant changes since the **2024 Annual Report on Form 10-K**[69](index=69&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the annual report for market risk disclosures, confirming no material changes since the last fiscal year-end - The company's exposure to market risk has not materially changed since **December 31, 2024**[70](index=70&type=chunk) - Detailed disclosures about market risk are available in **'Item 7A. Quantitative and Qualitative Disclosures About Market Risk'** of the company's Form 10-K[70](index=70&type=chunk) [Item 4. Controls and Procedures](index=21&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures and the absence of material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of **June 30, 2025**[71](index=71&type=chunk) - No changes in the company's internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[72](index=72&type=chunk) [PART II. OTHER INFORMATION](index=22&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal matters and equity transactions [Item 1. Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) This section cross-references legal proceedings information to the relevant note in the financial statements - Information regarding legal proceedings is provided in **Note K - Contingencies** of the Notes to the Condensed Consolidated Financial Statements[74](index=74&type=chunk) [Item 1A. Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the annual report for a discussion of material risk factors, confirming no material changes - There have been no material changes from the risk factors described in the company's **Form 10-K**[75](index=75&type=chunk) - A discussion of known material risk factors is available in **'Item 1A. Risk Factors'** of the company's Form 10-K[75](index=75&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=22&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section details the company's stock repurchase program and recent repurchase activity - The Board of Directors has authorized a stock repurchase program for Common Stock and Class A Common Stock, with **no expiration date**[76](index=76&type=chunk) - No repurchases of common stock occurred during the **second quarter of 2025**[77](index=77&type=chunk) - As of June 30, 2025, approximately **$6.1 million** remained authorized for repurchase under the program[77](index=77&type=chunk) [Item 5. Other Information](index=22&type=section&id=Item%205.%20Other%20Information) This section confirms that no directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements - No directors or officers adopted, modified, or terminated a **'Rule 10b5-1 trading arrangement'** or **'non-Rule 10b5-1 trading arrangement'** during the three months ended June 30, 2025[78](index=78&type=chunk) [Item 6. Exhibits](index=23&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with or incorporated by reference into the report, including certifications and agreements - - Exhibit 3.1: Articles of Amendment and Restatement of the Charter[80](index=80&type=chunk) - Exhibit 3.2: By-laws of Haverty Furniture Companies, Inc.[80](index=80&type=chunk) - Exhibit 10.1: Amendment and Waiver to the Amended and Restated Credit Agreement[80](index=80&type=chunk) - Exhibit 31.1: Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d‑14(a)[80](index=80&type=chunk) - Exhibit 31.2: Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d‑14(a)[80](index=80&type=chunk) - Exhibit 32.1: Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350[80](index=80&type=chunk) - Exhibit 101: Inline XBRL financial statements[80](index=80&type=chunk) - Exhibit 104: Cover Page Interactive Data File[80](index=80&type=chunk)

Financial Data and Key Metrics Changes - Company reported Q2 2025 sales of $181 million, a 1.3% increase year-over-year, with comparable store sales down 2.3% [3][18] - Gross margin improved to 60.8% from 60.4%, reflecting product selection and merchandising mix [18] - Pre-tax profits decreased to $4.3 million, with an operating margin of 2.4%, down from $6.5 million and 3.6% in Q2 2024 [3][18] - Earnings per share (EPS) for the quarter was $0.16, compared to $0.27 in the same quarter last year [3][18] Business Line Data and Key Metrics Changes - Total written sales increased by 0.4%, while design and special order business saw a mid-single-digit decline due to tariff impacts [4][9] - Average ticket size decreased slightly to just under $3,400, while designer average ticket grew approximately 5% to over $7,600 [4][9] - Upholstery and bedroom categories outperformed with low to mid-single-digit positive sales, while dining room and decor categories experienced high single-digit declines [9] Market Data and Key Metrics Changes - Traffic remained positive in the mid-single digits compared to the same period last year, with a notable increase during the Memorial Day event [4][6] - Organic traffic increased by 15.6% following the implementation of Adobe's Edge delivery service [7] - Web sales grew by 8.4% for the quarter, attributed to improved digital marketing strategies [7] Company Strategy and Development Direction - Company aims to return to positive same-store sales and is focused on enhancing customer experience through new point of purchase and tagging programs [10][12] - Plans to open five new stores annually, with two new stores in Houston and one relocation in Daytona Beach planned for 2025 [12][14] - Company is actively managing supply chain challenges and tariff uncertainties while maintaining gross margin guidance [11][15] Management's Comments on Operating Environment and Future Outlook - Management noted a struggling housing market with high interest rates and inflation concerns but highlighted consumer resilience [4][15] - Confidence in maintaining gross margin guidance despite potential tariff impacts, with proactive vendor communication [11][22] - Management expressed optimism about gradual improvement in sales trends and plans to invest more in marketing strategies [37][48] Other Important Information - Selling, general, and administrative expenses increased by 4.1% to $107.3 million, representing 59.3% of sales [19] - Company has no funded debt and ended the quarter with $107.4 million in cash and cash equivalents [20][21] - Anticipated capital expenditures for 2025 remain at $24 million, focusing on new store openings and IT investments [23] Q&A Session Summary Question: Can you speak to the cadence of your written sales throughout the quarter and any notable regional differences? - Written business was down around 2% in April, up almost 1% in May, and up around 2.5% in June, with no significant regional differences noted [26] Question: Can you quantify the impact of suspending special orders from China on same-store business? - Management acknowledged the impact on design business but could not quantify the exact effect [27][28] Question: Have you taken any pricing actions regarding tariffs, and what are your expectations? - Pricing adjustments were made in May, and management is prepared to adjust pricing based on final tariff outcomes [29][30] Question: What marketing strategies do you believe will be most impactful in driving same-store sales? - New pricing strategy and successful marketing campaigns, including extended promotions, are expected to drive traffic and conversion rates [35][36] Question: How do you view the promotional environment across the industry? - Management feels confident in their promotional strategies and plans to increase marketing investments while maintaining brand integrity [40][42] Question: What is the outlook for store openings and the real estate environment? - Store openings have been pushed to 2026, but management remains optimistic about finding suitable locations and maintaining reasonable rents [49][51]

Group 1: Earnings Performance - Haverty Furniture reported quarterly earnings of $0.16 per share, exceeding the Zacks Consensus Estimate of $0.15 per share, but down from $0.27 per share a year ago, representing an earnings surprise of +6.67% [1] - The company posted revenues of $181.03 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.34%, compared to year-ago revenues of $178.6 million [2] - Over the last four quarters, Haverty Furniture has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Haverty Furniture shares have declined approximately 5% since the beginning of the year, while the S&P 500 has gained 8.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.29 on revenues of $185.3 million, and for the current fiscal year, it is $1.15 on revenues of $740.85 million [7] Group 3: Industry Context - The Retail - Home Furnishings industry, to which Haverty Furniture belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Haverty Furniture's stock performance [5] - Williams-Sonoma, another company in the same industry, is expected to report quarterly earnings of $1.78 per share, reflecting a year-over-year change of +2.3% [9]

[Havertys Furniture Q2 2025 Earnings Release](index=1&type=section&id=Havertys%20Furniture%20Q2%202025%20Earnings%20Release) [Operating Results Highlights](index=1&type=section&id=Operating%20Results%20Highlights) The company reports its first year-over-year sales growth since Q4 2022, though diluted EPS declined - The company achieved **year-over-year sales growth for the first time since Q4 2022**, alongside strong gross margins and positive traffic trends, despite a challenging economic environment[2](index=2&type=chunk) Q2 2025 vs. Q2 2024 Key Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Diluted EPS | $0.16 | $0.27 | | Consolidated Sales | $181.0M (+1.3%) | $178.6M | | Comparable Store Sales | -2.3% | N/A | | Gross Profit Margin | 60.8% | 60.4% | [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) A detailed analysis of sales, profitability, expenses, balance sheet, and cash flow for Q2 and H1 2025 is presented [Second Quarter 2025 vs. Second Quarter 2024](index=2&type=section&id=Second%20Quarter%202025%20vs.%20Second%20Quarter%202024) Q2 2025 saw a 1.3% sales increase and improved gross margin, but higher SG&A expenses impacted profitability Q2 2025 Sales Performance | Metric | Change | | :--- | :--- | | Total Sales | +1.3% | | Comp-Store Sales | -2.3% | | Total Written Business | +0.4% | | Comp-Store Written Business | -2.1% | - **Gross profit margins increased to 60.8%** in Q2 2025 from 60.4% in Q2 2024[7](index=7&type=chunk) - **SG&A expenses increased by $4.2 million**, driven by higher administrative, occupancy, and advertising costs[7](index=7&type=chunk) [Balance Sheet and Cash Flow](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) The company maintained a strong balance sheet with $113.8 million in cash and no debt as of June 30, 2025 - The company has a strong balance sheet with **$113.8 million in cash** and cash equivalents and no debt outstanding as of June 30, 2025[7](index=7&type=chunk) Cash Flow and Shareholder Returns (Six Months Ended June 30, 2025) | Item | Amount (in millions) | | :--- | :--- | | Cash from Operating Activities | $13.4 | | Capital Expenditures | ($11.7) | | **Free Cash Flow** | **$1.7** | | Dividends Paid | $10.4 | | Share Repurchases | $2.0 | | **Total Cash Returned to Shareholders** | **$12.4** | [2025 Outlook and Guidance](index=2&type=section&id=2025%20Outlook%20and%20Guidance) Full-year 2025 guidance is reaffirmed for gross margin and fixed SG&A, with a lowered outlook for variable SG&A - The company is monitoring tariff developments and the current guidance **excludes the effects of additional proposed tariffs**[7](index=7&type=chunk) Full Year 2025 Guidance | Metric | Guidance Range/Value | | :--- | :--- | | Gross Profit Margins | 60.0% to 60.5% (Unchanged) | | Fixed & Discretionary SG&A | $291.0M to $293.0M (Unchanged) | | Variable SG&A (% of sales) | 18.5% to 18.8% (Decreased) | | Effective Tax Rate | ~26.5% (Excluding discrete items) | | Capital Expenditures | ~$24.0M | [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) Unaudited condensed financial statements provide a quantitative view of the company's performance and position [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2025 net income fell to $2.7 million from $4.4 million year-over-year due to higher SG&A expenses Q2 2025 Income Statement Highlights (in thousands) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net sales | $181,025 | $178,636 | | Gross profit | $110,102 | $107,984 | | SG&A | $107,333 | $103,099 | | Income before income taxes | $4,326 | $6,453 | | Net income | $2,689 | $4,438 | | Diluted EPS (Common) | $0.16 | $0.27 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets were $642.7 million as of June 30, 2025, with cash decreasing and inventories increasing Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $107,357 | $120,034 | | Inventories | $93,270 | $83,419 | | Total current assets | $236,148 | $238,896 | | Total assets | $642,672 | $648,747 | | Total current liabilities | $130,514 | $131,565 | | Total liabilities | $337,801 | $341,186 | | Stockholders' equity | $304,871 | $307,561 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to $13.4 million for the first six months of 2025, driven by inventory changes Six-Month Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $13,377 | $17,542 | | Net cash used in investing activities | ($11,683) | ($15,900) | | Net cash used in financing activities | ($14,237) | ($13,352) | | **Net decrease in cash** | **($12,543)** | **($11,710)** | | Cash at end of period | $113,771 | $116,067 | [Supplemental Information](index=8&type=section&id=Supplemental%20Information) Additional context includes non-GAAP reconciliations, metric definitions, and investor information [GAAP to Non-GAAP Reconciliation](index=8&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) EBITDA for the first six months of 2025 increased to $18.7 million from $16.8 million in the prior year EBITDA Reconciliation (Six Months Ended June 30, in thousands) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Income before income taxes | $9,619 | $9,648 | | Interest income, net | ($2,746) | ($3,022) | | Depreciation and amortization | $11,831 | $10,147 | | **EBITDA** | **$18,704** | **$16,773** | [Definitions and Classifications](index=8&type=section&id=Definitions%20and%20Classifications) Key definitions for comp-store sales and classifications for gross profit and SG&A expenses are provided - **Comparable-store sales** indicate the performance of existing stores and the website by comparing sales growth over the corresponding month in the prior year[16](index=16&type=chunk) - The company's **gross profit may not be comparable to other retailers** because it includes most occupancy and home delivery costs within SG&A expense rather than Cost of Goods Sold[17](index=17&type=chunk) - SG&A expenses are classified as **variable** (selling, delivery) and **fixed/discretionary** (rent, advertising, administrative)[18](index=18&type=chunk) [Company and Investor Information](index=8&type=section&id=Company%20and%20Investor%20Information) Logistical and legal information for investors includes conference call details and a Safe Harbor statement - A conference call is scheduled for **July 31, 2025, at 10:00 a.m. ET**[19](index=19&type=chunk) - Havertys, established in 1885, is a full-service home furnishings retailer with **129 showrooms in 17 states**[20](index=20&type=chunk) - The release contains **forward-looking statements** subject to the safe harbor provisions, which involve risks and uncertainties[21](index=21&type=chunk)[24](index=24&type=chunk)

Group 1: Bloomin' Brands - Bloomin' Brands is facing challenges such as weak comparable store growth and rising costs, exacerbated by the divestiture of its Brazilian holding as part of a long-term repositioning strategy [3][4] - The company is focusing on core operations, simplifying the menu, improving efficiencies through technology investments, and implementing a value-oriented marketing campaign [4] - Despite business contraction, the dividend yield stands at 6.27% with a recent annual dividend of $0.60, and the payout ratio is notably high at -2,000% [3][4] Group 2: Flowers Foods - Flowers Foods is transitioning from traditional baked goods to healthier options, supported by strategic acquisitions to enhance its good-for-you portfolio [8][9] - The company has a dividend yield of 6.34% with an annual dividend of $0.99 and a payout ratio of 91.67%, indicating sustainability due to strong cash flow and a healthy balance sheet [8][9] - Institutional ownership is significant, with approximately 75% of shares held by institutions, and they have been actively buying in recent quarters [10] Group 3: Haverty Furniture Company - Haverty Furniture Company is experiencing sluggish home sales and consumer pullback, leading to eight consecutive quarters of revenue contraction, although growth is expected to resume in the latter half of 2025 [13][14] - The dividend yield is 6.16% with an annual dividend of $1.28, but the payout ratio is concerning at 101.59%, indicating higher risk [12][13] - The company maintains a strong balance sheet with no debt and a total liability of slightly more than one times equity, providing a robust financial position [15]

Core Viewpoint - The comparison between Haverty Furniture (HVT) and Williams-Sonoma (WSM) indicates that HVT may offer better value for investors at this time due to its stronger earnings outlook and favorable valuation metrics [1][3]. Group 1: Zacks Rank and Earnings Outlook - HVT has a Zacks Rank of 2 (Buy), while WSM has a Zacks Rank of 3 (Hold), suggesting that HVT has a stronger improvement in its earnings outlook compared to WSM [3]. - The Zacks Rank emphasizes earnings estimates and revisions, which are critical for value investors [2]. Group 2: Valuation Metrics - HVT has a forward P/E ratio of 15.65, significantly lower than WSM's forward P/E of 19.15, indicating that HVT may be undervalued relative to WSM [5]. - HVT's PEG ratio is 1.30, while WSM's PEG ratio is 2.64, further suggesting that HVT is more attractive in terms of expected earnings growth [5]. - HVT's P/B ratio is 1.08, compared to WSM's P/B of 9.3, highlighting HVT's better valuation in terms of market value versus book value [6]. Group 3: Value Grades - HVT has earned a Value grade of A, while WSM has a Value grade of C, reinforcing the notion that HVT is the superior choice for value investors at this time [6].

Core Viewpoint - Haverty Furniture Companies (HVT) is currently identified as a strong value stock, holding a Zacks Rank 2 (Buy) and an "A" grade in the Value category, indicating its potential for undervaluation in the market [4][8]. Valuation Metrics - HVT has a Forward P/E ratio of 10.98, significantly lower than the industry average of 20.76, with historical fluctuations between 9.18 and 23.87 over the past 12 months [4]. - The PEG ratio for HVT stands at 0.92, compared to the industry average of 2.34, indicating a favorable valuation relative to expected earnings growth [5]. - HVT's P/S ratio is 0.46, which is much lower than the industry average of 1.26, suggesting that the stock is undervalued based on sales performance [6]. - The P/CF ratio for HVT is 7.64, compared to the industry average of 13.84, reflecting a strong cash flow outlook and further supporting the undervaluation thesis [7]. Investment Outlook - The combination of HVT's strong earnings outlook and favorable valuation metrics positions it as one of the market's strongest value stocks, appealing to value investors [8].

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's Q1 2025 financial statements reflect a **57.9% increase in net income** to **$3.8 million** despite a slight sales decrease, alongside improved operating cash flow [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets slightly decreased to **$642.7 million**, with a reduction in cash and a marginal decrease in stockholders' equity Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$642,690** | **$648,747** | | Cash and cash equivalents | $111,941 | $120,034 | | Inventories | $88,704 | $83,419 | | **Total Liabilities** | **$337,329** | **$341,186** | | **Total Stockholders' Equity** | **$305,361** | **$307,561** | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Q1 2025 net sales slightly decreased by **1.3%** to **$181.6 million**, but net income significantly increased by **57.9%** to **$3.8 million** Q1 2025 vs. Q1 2024 Income Statement (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $181,567 | $183,997 | -1.3% | | Gross Profit | $111,083 | $111,019 | +0.1% | | Income Before Income Taxes | $5,293 | $3,195 | +65.7% | | **Net Income** | **$3,778** | **$2,393** | **+57.9%** | | Diluted EPS (Common) | $0.23 | $0.14 | +64.3% | - Cash dividends per share for Common Stock increased to **$0.32** in Q1 2025 from **$0.30** in Q1 2024[10](index=10&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 net cash from operating activities increased to **$6.2 million**, while cash used in financing activities rose due to **$2.0 million** in stock repurchases Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,154 | $3,135 | | Net cash used in investing activities | ($6,122) | ($6,351) | | Net cash used in financing activities | ($8,058) | ($6,698) | | **Decrease in cash** | **($8,026)** | **($9,914)** | - The company repurchased **$2.0 million** of common stock in Q1 2025, whereas no repurchases were made in Q1 2024[11](index=11&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, single reportable segment operations, **44.8%** of sales from upholstery, and an **$80.0 million** revolving credit facility with no outstanding borrowings Revenue by Product Category - Q1 2025 vs Q1 2024 (in thousands) | Category | Q1 2025 Net Sales | % of Sales | Q1 2024 Net Sales | % of Sales | | :--- | :--- | :--- | :--- | :--- | | Case Goods | $58,052 | 32.0% | $59,085 | 32.1% | | Upholstery | $81,415 | 44.8% | $82,935 | 45.1% | | Mattresses | $15,804 | 8.7% | $16,600 | 9.0% | | Accessories and Other | $26,296 | 14.5% | $25,377 | 13.8% | - The company operates as a single reportable segment, with financial and operational decisions made on a market area approach[23](index=23&type=chunk) - As of March 31, 2025, the company had full availability of **$80.0 million** under its revolving credit facility, with no outstanding borrowings[20](index=20&type=chunk)[55](index=55&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **1.3%** Q1 2025 net sales decline to macroeconomic factors, while gross profit margin improved to **61.2%** and SG&A expenses decreased by **2.0%** [Net Sales](index=17&type=section&id=Net%20Sales) Q1 2025 net sales decreased by **1.3%** to **$181.6 million**, with comparable-store sales down **4.8%** due to macroeconomic factors, though in-home design services showed positive trends Q1 Sales Performance | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales | $181.6M (-1.3%) | $184.0M (-18.1%) | | Comp-Store Sales Change | -4.8% | -18.5% | - Written business for Q1 2025 was down **2.6%** compared to Q1 2024, with written comp-store sales down **6.3%**[47](index=47&type=chunk) - In-home design consultants drove **33.2%** of total written sales in Q1 2025, up from **32.4%** in Q1 2024, with the average ticket increasing from **$6,782** to **$7,422**[48](index=48&type=chunk) [Gross Profit](index=17&type=section&id=Gross%20Profit) Gross profit margin for Q1 2025 improved by **90 basis points** to **61.2%**, driven by favorable product selection and merchandising mix - Gross profit margin increased to **61.2%** in Q1 2025 from **60.3%** in Q1 2024, a **90 basis point** improvement[49](index=49&type=chunk) [Selling, General and Administrative Expenses](index=17&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) Q1 2025 SG&A expenses decreased by **$2.2 million** (**2.0%**) to **$107.2 million**, improving to **59.0%** of sales due to lower variable costs SG&A Expense Breakdown (in thousands) | Expense Type | Q1 2025 | % of Sales | Q1 2024 | % of Sales | | :--- | :--- | :--- | :--- | :--- | | Variable | $33,647 | 18.5% | $36,986 | 20.1% | | Fixed and discretionary | $73,555 | 40.5% | $72,370 | 39.3% | | **Total SG&A** | **$107,202** | **59.0%** | **$109,356** | **59.4%** | [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$111.9 million** in cash and full availability of its **$80.0 million** credit facility, with operating cash flow improving to **$6.2 million** - At March 31, 2025, the company had **$111.9 million** in cash and cash equivalents and **$6.3 million** in restricted cash[54](index=54&type=chunk) - Net cash provided by operating activities increased to **$6.2 million** in Q1 2025 from **$3.1 million** in Q1 2024[59](index=59&type=chunk) - Cash used in financing activities increased by **$1.4 million** YoY, primarily due to **$2.0 million** in common stock repurchases in Q1 2025[61](index=61&type=chunk) [Store Plans and Capital Expenditures](index=19&type=section&id=Store%20Plans%20and%20Capital%20Expenditures) The company is managing its store portfolio with planned openings and closures, while re-evaluating 2025 store plans and capital expenditures due to potential tariff impacts 2025 Store Activity Plan | Location or Market | Planned Quarter | Activity | | :--- | :--- | :--- | | Houston, TX | Q1-25 | Open | | Daytona, FL | Q2-25 | Relocation | | Atlanta, GA | Q2-25 | Closure | | Waco, TX | Q3-25 | Closure | | Houston, TX | Q3-25 | Open | - The company is re-evaluating its store plans and capital expenditures for 2025 to minimize the impact of increased tariffs[62](index=62&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=19&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports no material changes to its market risk exposure since the end of fiscal year 2024 - There has been no material change in the company's market risk exposure since December 31, 2024[64](index=64&type=chunk) [Item 4. Controls and Procedures](index=19&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of the end of the reporting period[65](index=65&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[66](index=66&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=20&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no pending legal proceedings expected to have a material adverse effect on its financial condition or operations - The company is subject to various claims in the ordinary course of business but currently has no pending legal proceedings expected to have a material adverse effect[40](index=40&type=chunk)[68](index=68&type=chunk) [Item 1A. Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred from the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes from the risk factors described in the company's Form 10-K have occurred[69](index=69&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=20&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) In Q1 2025, the company repurchased **93,741** common shares for approximately **$2.0 million**, with **$6.1 million** remaining under the repurchase program Q1 2025 Share Repurchase Activity | Period | Total Shares Purchased | Average Price Paid Per Share | Approx. Value Remaining for Repurchase | | :--- | :--- | :--- | :--- | | Jan 2025 | 0 | $— | $8,121,000 | | Feb 2025 | 0 | $— | $8,121,000 | | Mar 2025 | 93,741 | $21.34 | $6,121,000 | [Item 5. Other Information](index=20&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement in Q1 2025[72](index=72&type=chunk) [Item 6. Exhibits](index=21&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO and CFO certifications and financial statements in inline XBRL format - Key exhibits filed include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and financial data in inline XBRL format (Exhibit 101)[74](index=74&type=chunk)