Financial Performance - Net sales for Q3 2025 increased by $18.6 million, or 10.6%, compared to Q3 2024, despite a challenging housing market [57] - Comp-store sales for Q3 2025 rose by $12.5 million, or 7.1%, compared to the same period in 2024 [57] - For the nine months ended September 30, 2025, net sales increased by $18.5 million, or 3.4%, compared to the same period in 2024 [58] - Written business for the first nine months of 2025 increased by 2.6% compared to the same prior year period [58] Profitability and Expenses - Gross profit margin for Q3 2025 was 60.3%, up 10 basis points from 60.2% in Q3 2024, driven by product selection and pricing [61] - SG&A expenses as a percentage of sales for Q3 2025 were 57.8%, an increase from 57.4% in Q3 2024, with total SG&A expenses rising by $11.4 million, or 11.3% [63] - SG&A expenses for the first nine months of 2025 were $326.9 million, up 4.3% from $313.4 million in the same period in 2024 [64] - Variable expenses in Q3 2025 were $36.5 million, representing 18.7% of net sales, compared to 18.9% in Q3 2024 [66] Cash Flow and Liquidity - As of September 30, 2025, the company had $130.5 million in cash and cash equivalents and $6.5 million in restricted cash equivalents, indicating a strong liquidity position [68] - Net cash provided by operating activities was $45.3 million in the first nine months of 2025, up from $42.0 million in the same period of 2024, primarily due to changes in working capital [73] - Cash used in investing activities decreased by $8.6 million in the first nine months of 2025 compared to the same period in 2024, attributed to lower capital expenditures [74] - Cash used in financing activities increased by $0.8 million in the first nine months of 2025, with common stock repurchases totaling $2.0 million, compared to no repurchases in the same period of 2024 [75] - The borrowing base under the credit agreement was $133.9 million as of September 30, 2025, with net availability of $80.0 million [69] - The company anticipates funding its capital expenditures, dividend payments, and lease obligations through its current cash position and cash flow generated from operations over the next several years [68] - Operating cash flows are primarily driven by cash received from customers, offset by payments for products, services, and operational costs [71] - Working capital changes significantly impact cash flows, influenced by factors such as seasonality and inventory selection [72] - The company has the ability to obtain alternative sources of financing if needed, ensuring financial flexibility [68] Business Operations - Design consultants contributed to 34.2% of total written sales in Q3 2025, with an average written ticket of $7,986, compared to $7,312 in Q3 2024 [59] - The company plans to open a total of 129 stores by the end of 2025, including new locations in Houston, TX, and St. Louis, MO [76] - The company continues to assess the impact of new tariffs on its supply chain and cost structure, with significant tariff increases on imported goods effective October 2025 [54]

Financial Performance - Diluted earnings per share ("EPS") for Q3 2025 was $0.28, a slight decrease from $0.29 in Q3 2024[4] - Consolidated sales increased by 10.6% to $194.5 million compared to $175.9 million in the same quarter last year[4] - Comparable store sales rose by 7.1% for the quarter, indicating positive momentum in customer traffic and sales performance[4] - Gross profit margin improved to 60.3% in Q3 2025 from 60.2% in Q3 2024[4] - Net income for the nine months ended September 30, 2025, was $11,196,000, a decrease of 4.8% compared to $11,759,000 in 2024[14] - EBITDA for the nine months ended September 30, 2025, increased to $29,981,000, up 8.4% from $27,666,000 in 2024[16] - Net cash provided by operating activities was $45,285,000, an increase of 7.8% compared to $41,989,000 in the same period of 2024[14] Business Operations - Total written business increased by 10.0%, while comparable store written business grew by 8.0% for the quarter[8] - SG&A expenses were 57.8% of sales, up from 57.4%, with a total increase of $11.4 million primarily due to higher advertising and administrative costs[8] - The company plans to open five net new stores in 2026, resuming store count growth[3] - Comparable-store sales growth is a key performance indicator for the company, reflecting the performance of existing stores and online sales[17] Cash and Investments - Cash, cash equivalents, and restricted cash equivalents at September 30, 2025, totaled $137.0 million[8] - Cash, cash equivalents, and restricted cash equivalents at the end of the period increased to $136,977,000 from $127,365,000 in 2024, reflecting a growth of 7.3%[14] - Capital expenditures for the nine months ended September 30, 2025, were $15,277,000, a decrease of 37.1% from $24,285,000 in 2024[14] - The company paid dividends totaling $15,534,000 during the nine months ended September 30, 2025, compared to $15,295,000 in 2024, marking a slight increase[14] - The company repurchased $2,000,000 in common stock during the nine months ended September 30, 2025[14] Future Outlook - Expected gross profit margins for 2025 are projected to be between 60.4% to 60.7%, an increase from prior guidance[8] - The effective tax rate for 2025 is anticipated to be 26.5%, excluding the impact from discrete items and new tax legislation[8] - The company anticipates continued focus on retail and operating margins, with plans for capital expenditures in 2025[23] - Forward-looking statements indicate potential risks including competition, changes in consumer preferences, and supply chain vulnerabilities[24]

PART I. FINANCIAL INFORMATION This section details the company's unaudited financial statements and management's analysis of financial condition [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, cash flows, and detailed accounting notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the condensed consolidated balance sheets, detailing assets, liabilities, and equity for the specified periods **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 presents the condensed consolidated statements of comprehensive income, detailing net sales, gross profit, and net income **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 presents the condensed consolidated statements of cash flows, detailing 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 notes explaining the company's accounting policies, equity changes, revenue recognition, and other financial instrument details [Note A - Business and Basis of Presentation](index=7&type=section&id=Note%20A%20-%20Business%20and%20Basis%20of%20Presentation) Havertys is a residential furniture retailer; financial statements are unaudited and prepared under U.S. GAAP - 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 stockholders' equity, including net income, dividends, restricted stock, and treasury 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) Inventories are valued using the LIFO method, with interim calculations based on management estimates subject to change - **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) Fair values of short-term financial instruments approximate carrying values; deferred compensation assets use Level 1 market prices - 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) The company maintains an **$80.0 million** revolving credit facility with no outstanding borrowings as of June 30, 2025 - 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) Revenue from merchandise sales is recognized upon delivery; the company operates as a single reportable segment - **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) The company has operating leases for real estate and equipment, with variable payments expensed as incurred - 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) The effective tax rate increased to **32.8%** for the six months ended June 30, 2025, with no material impact from new 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) Earnings per share are reported using the two-class method, reflecting preferential dividends and differing voting rights - **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) The company is subject to various legal proceedings, none of which are expected to have a material adverse effect - 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 forward-looking statements and lists risks that could cause actual results to differ materially from expectations - 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) New U.S. tariffs on imported goods are effective August 7, 2025; the company is assessing their impact on supply chain and costs - 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) Net sales for Q2 2025 increased by **1.3%** year-over-year, despite a challenging demand environment, while comp-store sales decreased **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) Gross profit margin improved for both the second quarter and first six months of 2025, driven by product selection and pricing - **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) SG&A expenses as a percentage of sales increased due to higher administrative, occupancy, and advertising costs - **SG&A expenses** as a percentage of sales were **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** (**$3.4M**), **occupancy** (**$1.5M**), and **advertising** (**$1.1M**) costs, partially offset by **decreased warehouse and delivery costs** (**$1.1M**)[55](index=55&type=chunk)[56](index=56&type=chunk) - First six months of 2025 **SG&A increased** by **$2.1 million (1.0%)**, driven by **administrative** (**$4.5M**) and **occupancy** (**$3.1M**) costs, offset by **decreased warehouse and delivery** (**$2.8M**) and **selling expenses** (**$2.7M**)[55](index=55&type=chunk)[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) The company maintains strong liquidity with cash and a credit facility, despite decreased operating cash flows and increased stock repurchases - 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) The company plans new store openings and relocations, expecting **129** stores by the end of 2025 **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) Management concluded no accounting estimates were critical for the periods presented, with no significant changes since the last annual report - **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) The company's exposure to market risk has not materially changed since December 31, 2024, as detailed in its Form 10-K - 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) Management concluded disclosure controls and procedures were effective, with no 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 This section provides additional information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is cross-referenced to Note K - Contingencies within 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) The company refers to its Form 10-K for risk factors, confirming no material changes from those previously described - 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) The Board authorized a stock repurchase program; no repurchases occurred in Q2 2025, with **$6.1 million** remaining authorized - 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) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q2 2025 - 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 charter, by-laws, and certifications - 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)

[Executive Summary](index=1&type=section&id=Executive%20Summary) Havertys Furniture achieved its first year-over-year sales growth since Q4 2022, showing strong gross margins and improved operational trends [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Havertys Furniture reported its first year-over-year sales growth since Q4 2022, alongside strong gross margins and improved operational trends, despite a challenging market. Diluted EPS decreased, while consolidated sales increased slightly | Metric | Q2 2025 | Q2 2024 | Change | Chunk | | :-------------------------------- | :------ | :------ | :----- | :---- | | Diluted EPS | $0.16 | $0.27 | -40.7% | 3 | | Consolidated Sales | $181.0 million | $178.6 million | +1.3% | 3 | | Comparable Store Sales | -2.3% | N/A | N/A | 3 | | Gross Profit Margin | 60.8% | 60.4% | +0.4 percentage points | 3 | - Achieved year-over-year sales growth for the first time since **Q4 2022**, driven by new marketing and promotional strategies[2](index=2&type=chunk) - Experienced positive traffic trends and improved conversion rates[2](index=2&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) President and CEO Steven G. Burdette highlighted the company's return to year-over-year sales growth in Q2 2025, attributing it to effective marketing, team dedication, and historical experience, despite ongoing challenges in the housing market and consumer confidence - CEO noted positive sales and operational trends, including strong gross margins, positive traffic, and improved conversion rates[2](index=2&type=chunk) - Acknowledged a challenging environment with a soft housing market, low consumer confidence, and tariff uncertainty[2](index=2&type=chunk) - Improved sales results are a reflection of new marketing and promotional strategies and the team's dedication[2](index=2&type=chunk) [Financial Performance Overview](index=2&type=section&id=Financial%20Performance%20Overview) Q2 2025 showed slight sales growth and improved gross margins, but increased SG&A expenses impacted net income for both the quarter and six-month period [Second Quarter 2025 Results of Operations](index=2&type=section&id=Second%20Quarter%202025%20Results%20of%20Operations) For the second quarter of 2025, consolidated sales increased by 1.3% to $181.0 million, while comparable store sales decreased by 2.3%. Gross profit margin improved to 60.8%, but SG&A expenses as a percentage of sales increased, leading to a decline in pre-tax and net income compared to the prior year | Metric | Q2 2025 | Q2 2024 | Change | Chunk | | :-------------------------------- | :------ | :------ | :----- | :---- | | Sales | $181.0 million | $178.6 million | +1.3% | 8 | | Gross Profit | $110.1 million | $108.0 million | +1.9% | 8 | | Gross Profit as % of Sales | 60.8% | 60.4% | +0.4 percentage points | 8 | | Total SG&A | $107.3 million | $103.1 million | +4.1% | 8 | | Total SG&A as % of Sales | 59.3% | 57.7% | +1.6 percentage points | 8 | | Pre-tax Income | $4.3 million | $6.5 million | -33.8% | 8 | | Net Income | $2.7 million | $4.4 million | -38.6% | 8 | | Diluted EPS | $0.16 | $0.27 | -40.7% | 8 | - Total written business increased **0.4%**, while comparable store written business decreased **2.1%**[7](index=7&type=chunk) - SG&A expenses increased by **$4.2 million**, primarily due to higher administrative expenses (**$3.4 million**), occupancy costs (**$1.5 million**), and advertising costs (**$1.1 million**), partially offset by lower warehouse and delivery costs (**$1.1 million**)[7](index=7&type=chunk) [Six Months Ended June 30, 2025 Results of Operations](index=2&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Results%20of%20Operations) For the first six months of 2025, total sales remained flat at $362.6 million compared to the prior year. Gross profit increased slightly, but higher SG&A expenses led to flat pre-tax income and a modest decrease in net income and diluted EPS | Metric | H1 2025 | H1 2024 | Change | Chunk | | :-------------------------------- | :------ | :------ | :----- | :---- | | Sales | $362.6 million | $362.6 million | 0.0% | 8 | | Gross Profit | $221.2 million | $219.0 million | +1.0% | 8 | | Gross Profit as % of Sales | 61.0% | 60.4% | +0.6 percentage points | 8 | | Total SG&A | $214.5 million | $212.5 million | +0.9% | 8 | | Total SG&A as % of Sales | 59.2% | 58.6% | +0.6 percentage points | 8 | | Pre-tax Income | $9.6 million | $9.6 million | 0.0% | 8 | | Net Income | $6.5 million | $6.8 million | -4.4% | 8 | | Diluted EPS | $0.39 | $0.41 | -4.9% | 8 | [Financial Statements](index=4&type=section&id=Financial%20Statements) Financial statements reflect slight Q2 2025 sales growth but decreased net income, flat six-month sales, and reduced cash flow primarily from inventory increases [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The condensed consolidated statements of income show a slight increase in net sales for Q2 2025 but a decrease in net income due to higher selling, general, and administrative expenses. For the six months, net sales were flat, and net income saw a minor decline | (In thousands) | 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 | | Selling, general and administrative | $107,333 | $103,099 | $214,535 | $212,455 | | Income before income taxes | $4,326 | $6,453 | $9,619 | $9,648 | | Net income | $2,689 | $4,438 | $6,467 | $6,831 | | Diluted EPS (Common Stock) | $0.16 | $0.27 | $0.39 | $0.41 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $642.7 million, slightly down from December 31, 2024. Cash and cash equivalents decreased, while inventories increased. Total liabilities also saw a minor decrease, with stockholders' equity remaining relatively stable | (In thousands) | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :----------------------------------- | :------------ | :---------------- | :------------ | | Total assets | $642,672 | $648,747 | $642,105 | | Cash and cash equivalents | $107,357 | $120,034 | $109,942 | | Inventories | $93,270 | $83,419 | $92,401 | | Total current assets | $236,148 | $238,896 | $240,410 | | Total liabilities | $337,801 | $341,186 | $335,007 | | Stockholders' equity | $304,871 | $307,561 | $307,098 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities decreased to $13.4 million from $17.5 million in the prior year, primarily due to an increase in inventories and a decrease in customer deposits. The company invested $11.7 million in capital expenditures and used $14.2 million in financing activities, including dividends and share repurchases | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 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) | | Decrease in cash, cash equivalents, and restricted cash equivalents | $(12,543) | $(11,710) | | Cash, cash equivalents, and restricted cash equivalents at end of period | $113,771 | $116,067 | - Operating cash flow was impacted by a **$9.9 million** increase in inventories and a **$1.4 million** decrease in customer deposits[7](index=7&type=chunk) - Purchased approximately **94,000** shares of common stock for **$2.0 million** and paid **$10.4 million** in quarterly cash dividends[7](index=7&type=chunk) [Key Financial and Operational Metrics](index=3&type=section&id=Key%20Financial%20and%20Operational%20Metrics) Key metrics for H1 2025 indicate increased EBITDA and free cash flow, supported by a strong liquidity position with substantial cash and no outstanding debt [Other Financial and Operations Data](index=3&type=section&id=Other%20Financial%20and%20Operations%20Data) For the six months ended June 30, 2025, EBITDA increased to $18.7 million. Sales per square foot slightly decreased, while the average ticket value saw a modest increase | Metric | H1 2025 | H1 2024 | Change | Chunk | | :---------------- | :------ | :------ | :----- | :---- | | EBITDA (in millions) | $18.7 | $16.8 | +11.3% | 9 | | Sales per square foot | $161 | $166 | -3.0% | 9 | | Average ticket | $3,350 | $3,332 | +0.5% | 9 | - Design consultants accounted for **33.4%** of written business in **2025**, down from **36.0%** in **2024**[7](index=7&type=chunk) [Liquidity Measures](index=3&type=section&id=Liquidity%20Measures) Free cash flow for the six months ended June 30, 2025, was $1.7 million, a slight increase from the prior year. The company maintained a strong liquidity position with $113.8 million in cash and no outstanding debt, alongside $80.0 million in credit availability | Metric | H1 2025 | H1 2024 | Change | Chunk | | :-------------------------- | :------ | :------ | :----- | :---- | | Operating cash flow | $13.4 million | $17.5 million | -23.5% | 10 | | Capital expenditures | $(11.7 million) | $(16.0 million) | +26.9% | 10 | | Free cash flow | $1.7 million | $1.5 million | +13.3% | 10 | | Cash at period end | $113.8 million | $116.1 million | -2.0% | 10 | | Share repurchases | $2.0 million | $0 | N/A | 10 | | Dividends | $10.4 million | $10.1 million | +3.0% | 10 | - No debt outstanding at **June 30, 2025**, with **$80.0 million** in credit availability[7](index=7&type=chunk) [Outlook and Guidance](index=2&type=section&id=Outlook%20and%20Guidance) Havertys Furniture's 2025 guidance remains largely consistent with prior expectations, including gross profit margins between 60.0% to 60.5% and fixed/discretionary SG&A expenses in the $291.0 to $293.0 million range. Variable SG&A is anticipated to decrease, and planned capital expenditures are approximately $24.0 million - **2025** guidance includes currently effective tariffs but excludes effects of additional proposed tariffs[7](index=7&type=chunk) - Gross profit margins for **2025** are expected to be between **60.0%** to **60.5%**, unchanged from prior guidance[7](index=7&type=chunk) - Fixed and discretionary SG&A expenses for **2025** are expected to be in the **$291.0** to **$293.0 million** range (unchanged), while variable SG&A expenses are anticipated to be **18.5%** to **18.8%** (a decrease from prior guidance due to lower warehouse and delivery costs)[7](index=7&type=chunk) - Effective tax rate for **2025** is expected to be **26.5%**, excluding discrete items and new tax legislation[7](index=7&type=chunk) - Planned capital expenditures for **2025** are approximately **$24.0 million**, with retail square footage expected to remain consistent with **2024**[7](index=7&type=chunk) [Non-GAAP Financial Measures and Definitions](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Definitions) This section clarifies non-GAAP measures including EBITDA, comparable store sales, and the classification of cost of goods sold and SG&A expenses [GAAP to Non-GAAP Reconciliation (EBITDA)](index=8&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation%20(EBITDA)) The company provides EBITDA as a non-GAAP financial measure, believing it offers additional useful information for investors. EBITDA for the six months ended June 30, 2025, was $18.7 million, an increase from $16.8 million in the prior year - EBITDA is presented as a meaningful non-GAAP measure to supplement GAAP financial reporting[14](index=14&type=chunk) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 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 | [Comparable Store Sales Definition](index=8&type=section&id=Comparable%20Store%20Sales%20Definition) Comparable-store sales measure the performance of existing stores and the website by comparing sales growth for a particular month over the corresponding month in the prior year. Stores are excluded if they were not open during the corresponding month or if selling square footage changed significantly - Comparable-store sales indicate the performance of existing stores and the website[16](index=16&type=chunk) - Stores are considered non-comparable if not open during the corresponding month or if selling square footage changed significantly[16](index=16&type=chunk) [Cost of Goods Sold and SG&A Expense Classification](index=8&type=section&id=Cost%20of%20Goods%20Sold%20and%20SG%26A%20Expense%20Classification) Havertys includes most occupancy and home delivery costs, along with a portion of warehousing expenses, in SG&A, which may differ from other entities' classifications. SG&A expenses are further categorized into variable (selling and delivery costs) and fixed/discretionary (rent, depreciation, advertising, administrative costs) - Substantially all occupancy and home delivery costs, plus a portion of warehousing expenses, are included in SG&A expense[17](index=17&type=chunk) - SG&A expenses are classified as variable (selling and delivery costs) or fixed and discretionary (rent, depreciation, advertising, administrative costs)[18](index=18&type=chunk) - Variable selling expenses primarily include compensation for commission-based sales associates, third-party financing discounts, and credit card transaction fees[18](index=18&type=chunk) [Corporate Information](index=8&type=section&id=Corporate%20Information) This section outlines Havertys Furniture's corporate profile, Q2 2025 conference call details, and a safe harbor statement concerning forward-looking information [About Havertys Furniture](index=8&type=section&id=About%20Havertys%20Furniture) Haverty Furniture Companies, Inc., established in 1885, is a full-service home furnishings retailer operating 129 showrooms across 17 states in the Southern and Midwestern regions, offering a wide selection of quality merchandise in middle to upper-middle price ranges - Established in **1885**, Havertys is a full-service home furnishings retailer[20](index=20&type=chunk) - Operates **129** showrooms in **17** states across the Southern and Midwestern regions[20](index=20&type=chunk) - Provides a wide selection of quality merchandise in middle to upper-middle price ranges[20](index=20&type=chunk) [Conference Call Information](index=8&type=section&id=Conference%20Call%20Information) Havertys Furniture hosted a live webcast of its conference call on July 31, 2025, at 10:00 a.m. ET, with a replay available on its investor relations website - Live webcast of the conference call was held on **July 31, 2025**, at **10:00 a.m. ET**[19](index=19&type=chunk) - A replay was made available on the company's investor relations website (ir.havertys.com) at approximately **1:00 p.m. ET** on the same day[19](index=19&type=chunk) [Safe Harbor Statement](index=9&type=section&id=Safe%20Harbor%20Statement) This press release and the conference call contain forward-looking statements subject to safe harbor provisions, which involve risks and uncertainties that could cause actual results to differ materially from expectations. Investors are cautioned not to place undue reliance on these statements and to review subsequent SEC filings for further disclosures - The report contains forward-looking statements subject to safe harbor provisions of the Securities Act of **1933** and **1934**[21](index=21&type=chunk) - Forward-looking statements involve risks and uncertainties, and actual results may differ materially due to various factors, including competition, consumer preferences, supply chain risks, economic conditions, and regulatory changes[23](index=23&type=chunk) - The company undertakes no duty to update forward-looking statements except as required by law, advising investors to review subsequent SEC filings[24](index=24&type=chunk)

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited condensed consolidated financial statements and accompanying notes for the relevant periods [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | (In thousands) | March 31, 2025 | December 31, 2024 | | :--------------- | :------------- | :---------------- | | Total assets | $642,690 | $648,747 | | Total liabilities | $337,329 | $341,186 | | Total stockholders' equity | $305,361 | $307,561 | | Cash and cash equivalents | $111,941 | $120,034 | | Inventories | $88,704 | $83,419 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) | (In thousands, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net sales | $181,567 | $183,997 | | Gross profit | $111,083 | $111,019 | | Income before income taxes | $5,293 | $3,195 | | Net income | $3,778 | $2,393 | | Basic earnings per share: Common Stock | $0.24 | $0.15 | | Cash dividends per share: Common Stock | $0.32 | $0.30 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 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) | | Common stock repurchased | $(2,000) | — | | Dividends paid | $(5,173) | $(4,845) | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note A - Business and Basis of Presentation](index=7&type=section&id=Note%20A%20-%20Business%20and%20Basis%20of%20Presentation) - Haverty Furniture Companies, Inc operates as a retailer of residential furniture in the middle to upper-middle price ranges, exclusively under the Havertys brand without franchising[12](index=12&type=chunk) - The unaudited condensed consolidated financial statements are prepared in accordance with Form 10-Q instructions and rely on management's estimates and assumptions, which may differ from actual results[12](index=12&type=chunk)[13](index=13&type=chunk) [Note B – Stockholders' Equity](index=8&type=section&id=Note%20B%20%E2%80%93%20Stockholders%27%20Equity) | (in thousands) | Balances at Dec 31, 2024 | Net income | Dividends declared (Common Stock) | Dividends declared (Class A Common Stock) | Acquisition of treasury stock | Balances at Mar 31, 2025 | | :------------- | :----------------------- | :--------- | :-------------------------------- | :---------------------------------------- | :---------------------------- | :----------------------- | | Total Stockholders' Equity | $307,561 | $3,778 | $(4,799) | $(374) | $(2,000) | $305,361 | [Note C – Interim LIFO Calculations](index=10&type=section&id=Note%20C%20%E2%80%93%20Interim%20LIFO%20Calculations) - Inventories are valued using the last-in, first-out (LIFO) method with an annual LIFO index[17](index=17&type=chunk) - Interim LIFO calculations are based on management's estimates of year-end inventory levels and expected inflation/deflation rates, making interim results subject to change based on the final year-end valuation[17](index=17&type=chunk) [Note D – Fair Value of Financial Instruments](index=10&type=section&id=Note%20D%20%E2%80%93%20Fair%20Value%20of%20Financial%20Instruments) - The fair values of cash, restricted cash, accounts payable, and customer deposits approximate their carrying values due to their short-term nature[18](index=18&type=chunk) - Assets related to self-directed, non-qualified deferred compensation plans are valued using **Level 1 quoted market prices**[18](index=18&type=chunk) [Note E – Credit Agreement](index=10&type=section&id=Note%20E%20%E2%80%93%20Credit%20Agreement) - The company has an **$80.0 million revolving credit facility**, secured primarily by inventory, maturing on October 24, 2027[19](index=19&type=chunk) - As of March 31, 2025, and December 31, 2024, there were **no outstanding borrowings** under the Credit Agreement, with a net availability of **$80.0 million** at March 31, 2025[20](index=20&type=chunk) [Note F – Revenues and Segment Reporting](index=10&type=section&id=Note%20F%20%E2%80%93%20Revenues%20and%20Segment%20Reporting) - Revenue from merchandise sales and related service fees is recognized upon delivery to the customer[21](index=21&type=chunk) - The company operates within a **single reportable segment**, with an executive committee serving as the chief operating decision maker (CODM) and evaluating performance based on income before income taxes[23](index=23&type=chunk)[24](index=24&type=chunk) | (In thousands) | Net Sales (2025) | % of Net Sales (2025) | Net Sales (2024) | % of Net Sales (2024) | | :------------- | :--------------- | :-------------------- | :--------------- | :-------------------- | | 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 % | | Total | $181,567 | 100.0 % | $183,997 | 100.0 % | [Note G – Leases](index=11&type=section&id=Note%20G%20%E2%80%93%20Leases) - The company holds operating leases for retail stores, offices, warehouses, and equipment, with remaining terms of **1 to 12 years** and options to extend up to 20 years[27](index=27&type=chunk) - Variable lease payments, based on sales volume or asset usage, are not included in the initial measurement of lease liabilities and are recorded as lease expense in the period incurred[28](index=28&type=chunk)[29](index=29&type=chunk) | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------- | :-------------------------------- | :-------------------------------- | | Operating lease cost | $12,334 | $12,244 | | Variable lease cost | $1,302 | $1,374 | | Total lease expense | $13,636 | $13,618 | [Note H – Income Taxes](index=12&type=section&id=Note%20H%20%E2%80%93%20Income%20Taxes) - The effective tax rate for the three months ended March 31, 2025, was **28.6%**, an increase from **25.1%** in the prior year, primarily due to nondeductible items and state income taxes[31](index=31&type=chunk) [Note I – Stock-Based Compensation Plans](index=13&type=section&id=Note%20I%20%E2%80%93%20Stock-Based%20Compensation%20Plans) - Total compensation cost related to unvested equity awards was approximately **$11.9 million** as of March 31, 2025, expected to be recognized over a weighted-average period of two years[35](index=35&type=chunk) - Compensation charged to selling, general and administrative expenses was approximately **$2.1 million for Q1 2025**, down from **$2.6 million for Q1 2024**[35](index=35&type=chunk) - The total fair value of performance-based restricted stock awards that vested during Q1 2025 was approximately **$2.1 million**[34](index=34&type=chunk) [Note J – Earnings Per Share](index=14&type=section&id=Note%20J%20%E2%80%93%20Earnings%20Per%20Share) - The company reports earnings per share using the **two-class method**, reflecting Common Stock's preferential dividend rate and Class A Common Stock's greater voting rights[37](index=37&type=chunk)[38](index=38&type=chunk) | Earnings Per Share | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------- | :-------------------------------- | :-------------------------------- | | Basic EPS: Common Stock | $0.24 | $0.15 | | Diluted EPS: Common Stock | $0.23 | $0.14 | [Note K – Contingencies](index=15&type=section&id=Note%20K%20%E2%80%93%20Contingencies) - The company is subject to various claims and legal proceedings in the ordinary course of business, but currently has **no pending claims reasonably likely to have a material adverse effect** on its financial condition, results of operations, or cash flows[40](index=40&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 discusses financial performance, operational trends, liquidity, and capital resources for the first quarter of 2025 [Forward-Looking Statements](index=16&type=section&id=Forward-Looking%20Statements) - Statements in the report that are not purely historical facts or depend on future events are considered forward-looking statements, subject to risks and uncertainties[42](index=42&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, as actual results could differ materially due to factors like competition, consumer preferences, supply chain issues, and economic conditions[42](index=42&type=chunk) [Impact of tariffs imposed by the U.S government](index=16&type=section&id=Impact%20of%20tariffs%20imposed%20by%20the%20U.S%20government) - The U.S government imposed additional tariffs on imported goods starting in Q1 2025, with a **90-day pause** for most trading partners (excluding China) implemented in April 2025[44](index=44&type=chunk) - The company is actively monitoring negotiations and evaluating the impact of these tariffs to minimize their effect on its business[44](index=44&type=chunk) [Net Sales](index=17&type=section&id=Net%20Sales) - Net sales decreased by **$2.4 million (1.3%)** and comparable-store sales decreased by **$8.8 million (4.8%)** in Q1 2025 compared to Q1 2024, attributed to a weak housing market, inflationary pressures, cautious consumer spending, and atypical winter weather[47](index=47&type=chunk) - Design consultants drove **33.2% of total written sales** in Q1 2025, with an average written ticket of **$7,422**, an increase from 32.4% and $6,782 in Q1 2024[48](index=48&type=chunk) | Period | Net Sales Total $ (2025) | % Change (2025) | Comp-Store Sales % Change (2025) | Net Sales Total $ (2024) | % Change (2024) | Comp-Store Sales % Change (2024) | | :----- | :----------------------- | :-------------- | :------------------------------- | :----------------------- | :-------------- | :------------------------------- | | Q1 | $181.6 | (1.3)% | (4.8)% | $184.0 | (18.1)% | (18.5)% | [Gross Profit](index=17&type=section&id=Gross%20Profit) - Gross profit margin for Q1 2025 increased by **90 basis points to 61.2%** compared to 60.3% in the prior year, primarily due to product selection and merchandising mix[49](index=49&type=chunk) [Selling, General and Administrative Expenses](index=17&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) - SG&A costs as a percentage of sales decreased to **59.0% in Q1 2025** from 59.4% in Q1 2024, with total SG&A dollars decreasing by **$2.2 million (2.0%)**[50](index=50&type=chunk) - The decrease in SG&A dollars was driven by lower selling expense ($2.0 million), warehouse and delivery costs ($1.7 million), and advertising and marketing costs ($1.1 million), partially offset by higher occupancy costs ($1.6 million) and administrative expenses ($1.0 million)[50](index=50&type=chunk) | (In thousands) | 2025 $ | % of Net Sales (2025) | 2024 $ | % of Net Sales (2024) | | :------------- | :----- | :-------------------- | :----- | :-------------------- | | Variable | $33,647 | 18.5 % | $36,986 | 20.1 % | | Fixed and discretionary | $73,555 | 40.5 % | $72,370 | 39.3 % | | Total | $107,202 | 59.0 % | $109,356 | 59.4 % | [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) - The company believes its current cash position, cash flow from operations, available credit, and access to debt capital markets are sufficient for operating requirements, capital expenditures, dividend payments, and lease obligations for the next several years[54](index=54&type=chunk) [Cash and Cash Equivalents](index=18&type=section&id=Cash%20and%20Cash%20Equivalents) - As of March 31, 2025, the company had **$111.9 million in cash and cash equivalents** and $6.3 million in restricted cash equivalents[54](index=54&type=chunk) [Long-Term Debt](index=18&type=section&id=Long-Term%20Debt) - The company maintains an **$80.0 million revolving credit facility**, maturing October 24, 2027, with **no outstanding borrowings** and $80.0 million net availability as of March 31, 2025[55](index=55&type=chunk) [Leases](index=18&type=section&id=Leases) - The company leases a portion of its real estate, including stores, distribution centers, and store support space, through operating leases[56](index=56&type=chunk) [Cash Flows Summary](index=18&type=section&id=Cash%20Flows%20Summary) - Net cash provided by operating activities increased to **$6.2 million in Q1 2025** from $3.1 million in Q1 2024, driven by higher net income and changes in working capital, including increased inventories[59](index=59&type=chunk) - Cash used in investing activities decreased by **$0.2 million** in Q1 2025 due to lower capital expenditures[60](index=60&type=chunk) - Cash used in financing activities increased by **$1.4 million** in Q1 2025, primarily due to **$2.0 million in common stock repurchases** (compared to none in Q1 2024)[61](index=61&type=chunk) [Store Plans and Capital Expenditures](index=19&type=section&id=Store%20Plans%20and%20Capital%20Expenditures) - The company is reevaluating its store plans and capital expenditures for 2025 to minimize the impact of increased tariffs[62](index=62&type=chunk) - Assuming new stores open as planned, the company expects to end 2025 with **129 stores**, including planned openings in Houston (Q1, Q3 2025) and a relocation in Daytona (Q2 2025), alongside closures in Atlanta (Q2 2025) and Waco (Q3 2025)[62](index=62&type=chunk) [Critical Accounting Estimates](index=19&type=section&id=Critical%20Accounting%20Estimates) - Critical accounting estimates involve significant, subjective, or complex judgments due to inherent uncertainties, but **no significant changes were identified** since the last annual report[63](index=63&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) This section confirms no material changes in market risk exposure since the year-end 2024 report - The company's exposure to market risk has **not materially changed** 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 confirms the effectiveness of disclosure controls and procedures as of March 31, 2025, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective as of March 31, 2025**[65](index=65&type=chunk) - **No material changes** in the company's internal control over financial reporting were identified during the fiscal quarter ended March 31, 2025[66](index=66&type=chunk) [PART II. OTHER INFORMATION](index=20&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=20&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the financial statement notes for information on legal proceedings, with no material adverse effects anticipated - Information regarding legal proceedings is described in Note A of the Notes to the Condensed Consolidated Financial Statements[68](index=68&type=chunk) [Item 1A. Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) This section confirms no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been **no material changes** from the risk factors described in the company's 2024 Annual Report on Form 10-K[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) The company details its Q1 2025 common stock repurchases and the remaining authorization under its buyback program - The board of directors has authorized a stock repurchase program with **no expiration date**[70](index=70&type=chunk) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Approximate Dollar Value of Shares That May Yet be Purchased | | :----- | :------------------------------- | :--------------------------- | :----------------------------------------------------------- | | March 1 - March 31 | 93,741 | $21.34 | $6,121,000 | | Total | 93,741 | | | [Item 5. Other Information](index=20&type=section&id=Item%205.%20Other%20Information) This section confirms no directors or officers adopted, modified, or terminated any Rule 10b5-1 trading arrangements during Q1 2025 - **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 March 31, 2025[72](index=72&type=chunk) [Item 6. Exhibits](index=21&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including CEO/CFO certifications and XBRL-formatted financial statements - Exhibits include certifications of the Chief Executive Officer and Chief Financial Officer (31.1, 31.2, 32.1) and financial statements formatted in inline XBRL (101)[74](index=74&type=chunk) [SIGNATURES](index=22&type=section&id=SIGNATURES) - The report was signed on May 2, 2025, by Steven G Burdette, President, Chief Executive Officer, and Director, and Richard B Hare, Executive Vice President, Chief Financial Officer, and Corporate Secretary[80](index=80&type=chunk)

[First Quarter 2025 Operating Results Highlights](index=1&type=section&id=First%20Quarter%202025%20Operating%20Results%20Highlights) Havertys reported solid Q1 2025 results, demonstrating improved gross margins and earnings amidst challenging market conditions [CEO Commentary](index=1&type=section&id=CEO%20Commentary) President and CEO Steven G. Burdette reported solid first-quarter results, highlighting improved gross margins, earnings, and expense control despite challenges like a weak housing market, adverse weather, low consumer confidence, and trade policy shifts. He emphasized the company's resilience, historical experience, and strong balance sheet in navigating economic changes - Havertys achieved **solid Q1 results** with improved gross margins, earnings, and expense control despite headwinds such as a weak housing market, atypical winter weather, low consumer confidence, and significant shifts in trade policy[2](index=2&type=chunk) - The company leverages its **140-year history of resilience** and a **solid balance sheet** to manage the dynamic U.S. trade policy environment and deliver shareholder value[3](index=3&type=chunk) [Q1 2025 Key Financial Highlights](index=1&type=section&id=Q1%202025%20Key%20Financial%20Highlights) For the first quarter of 2025, Havertys reported an increase in diluted EPS and gross profit margin, despite a slight decrease in consolidated and comparable store sales compared to the prior year Q1 2025 vs Q1 2024 Key Financial Highlights | Metric | Q1 2025 | Q1 2024 | Change | | :----- | :------ | :------ | :----- | | Diluted EPS | $0.23 | $0.14 | +$0.09 | | Consolidated Sales | $181.6 million | $184.0 million | -1.3% | | Comparable Store Sales | -4.8% | N/A | -4.8% | | Gross Profit Margin | 61.2% | 60.3% | +0.9 pp | [Detailed First Quarter 2025 Performance and Outlook](index=2&type=section&id=Detailed%20First%20Quarter%202025%20Performance%20and%20Outlook) This section details Havertys' Q1 2025 sales, profitability, financial position, cash flow, and provides the 2025 outlook [Sales and Business Performance](index=2&type=section&id=Sales%20and%20Business%20Performance) In Q1 2025, total sales decreased by 1.3% and comparable store sales by 4.8%. Written business also saw declines, while design consultants increased their contribution to written business - Total sales decreased **1.3%** and comparable-store sales decreased **4.8%** for the quarter[7](index=7&type=chunk) - Total written business was down **2.6%**, and comparable-store written business declined **6.3%** for the quarter[7](index=7&type=chunk) - Design consultants accounted for **33.2%** of written business in 2025, up from **32.4%** in 2024[7](index=7&type=chunk) [Profitability and Expense Management](index=2&type=section&id=Profitability%20and%20Expense%20Management) Gross profit margins improved to 61.2% in Q1 2025. SG&A expenses decreased by $2.2 million, primarily due to lower selling, warehouse, and delivery costs, and reduced advertising, partially offset by increased occupancy and administrative expenses - Gross profit margins increased to **61.2%** in 2025 from **60.3%** in 2024[7](index=7&type=chunk) - SG&A expenses were **59.0%** of sales versus **59.4%** and decreased **$2.2 million**[7](index=7&type=chunk) Key Drivers of SG&A Expense Change (Q1 2025 vs Q1 2024) | Driver | Change (Millions USD) | | :----- | :-------------------- | | Selling expenses | -$2.0 | | Warehouse and delivery costs | -$1.7 | | Advertising costs | -$1.1 | | Occupancy costs | +$1.6 | | Administrative expenses | +$1.0 | [Balance Sheet and Cash Flow Summary](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20Summary) As of March 31, 2025, Havertys maintained a strong liquidity position with $118.3 million in cash and no outstanding debt. The company generated $6.2 million in cash from operating activities and invested $6.1 million in capital expenditures, while also returning capital to shareholders through share repurchases and dividends - Cash, cash equivalents, and restricted cash equivalents at March 31, 2025, totaled **$118.3 million**[7](index=7&type=chunk) - Generated **$6.2 million** in cash from operating activities, driven by earnings and working capital changes[7](index=7&type=chunk) - Invested **$6.1 million** in capital expenditures, purchased approximately **94,000 shares** for **$2.0 million**, and paid **$5.2 million** in quarterly cash dividends[7](index=7&type=chunk) - No debt outstanding at March 31, 2025, with **$80.0 million** in credit availability[7](index=7&type=chunk) [2025 Outlook and Guidance](index=2&type=section&id=2025%20Outlook%20and%20Guidance) Havertys' 2025 guidance remains largely unchanged for gross profit margins (60.0%-60.5%) and fixed/discretionary SG&A ($291.0-$293.0 million). Variable SG&A is anticipated to decrease to 18.6%-19.0% due to lower warehouse and delivery costs. Capital expenditures are reduced to $24.0 million due to tariff uncertainty, with retail square footage expected to increase by approximately 2.0% - 2025 guidance includes current tariffs but excludes proposed additional tariffs, with close monitoring of negotiations[7](index=7&type=chunk) - Gross profit margins for 2025 are expected to be between **60.0% to 60.5%**, unchanged from prior guidance[7](index=7&type=chunk) - Fixed and discretionary SG&A expenses for 2025 are expected to be in the **$291.0 to $293.0 million** range, unchanged[7](index=7&type=chunk) - Variable SG&A expenses for 2025 are anticipated to be in the **18.6% to 19.0%** range, a decrease from previous guidance due to lower warehouse and delivery costs and third-party credit expense[7](index=7&type=chunk) - Planned capital expenditures for 2025 are approximately **$24.0 million**, a **$3 million** decrease from prior guidance due to tariff uncertainty[7](index=7&type=chunk) - Retail square footage is expected to increase approximately **2.0%** in 2025 over 2024[7](index=7&type=chunk) [Summary Financial Data Tables](index=3&type=section&id=Summary%20Financial%20Data%20Tables) This section provides summarized financial data tables for Q1 2025, including operational results, key metrics, and liquidity [Results of Operations (Summary)](index=3&type=section&id=Results%20of%20Operations%20(Summary)) This section provides a summary of Havertys' key operational results for the three months ended March 31, 2025, compared to the same period in 2024, highlighting sales, gross profit, SG&A, and net income Key Results of Operations (Three Months Ended March 31) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | | :------------------------ | :------------------ | :------------------ | | Sales | $181.6 | $184.0 | | Gross Profit | $111.1 | $111.0 | | Gross profit as a % of sales | 61.2% | 60.3% | | SGA Total | $107.2 | $109.4 | | SGA as a % of sales | 59.0% | 59.4% | | Pre-tax income | $5.3 | $3.2 | | Net income | $3.8 | $2.4 | | Diluted EPS | $0.23 | $0.14 | [Other Financial and Operations Data](index=3&type=section&id=Other%20Financial%20and%20Operations%20Data) This section presents additional operational metrics for the three months ended March 31, 2025, including EBITDA, sales per square foot, and average ticket size Other Financial and Operations Data (Three Months Ended March 31) | Metric | 2025 | 2024 | | :---------------- | :--- | :--- | | EBITDA (in millions) | $9.9 | $6.6 | | Sales per square foot | $162 | $169 | | Average ticket | $3,314 | $3,195 | [Liquidity Measures](index=3&type=section&id=Liquidity%20Measures) This section details Havertys' liquidity position and cash returns to shareholders for the three months ended March 31, 2025, including free cash flow, operating cash flow, capital expenditures, share repurchases, and dividends Liquidity Measures (Three Months Ended March 31) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | | :------------------------ | :------------------ | :------------------ | | Operating cash flow | $6.2 | $3.1 | | Capital expenditures | ($6.1) | ($6.4) | | Free cash flow | $0.1 | ($3.3) | | Cash at period end | $118.3 | $117.9 | | Share repurchases | $2.0 | — | | Dividends | $5.2 | $4.8 | | Cash returns to shareholders | $7.2 | $4.8 | [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents Havertys' condensed consolidated statements of income, balance sheets, and cash flows [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This statement provides a detailed breakdown of Havertys' revenues, costs, and profits for the three months ended March 31, 2025, compared to the same period in 2024, including net sales, gross profit, expenses, and net income per share Condensed Consolidated Statements of Income (Three Months Ended March 31, in thousands) | (In thousands, except per share data) | 2025 | 2024 | | :------------------------------------ | :--- | :--- | | Net sales | $181,567 | $183,997 | | Cost of goods sold | $70,484 | $72,978 | | Gross profit | $111,083 | $111,019 | | Selling, general and administrative | $107,202 | $109,356 | | Total expenses | $107,044 | $109,379 | | Income before interest and income taxes | $4,039 | $1,640 | | Income before income taxes | $5,293 | $3,195 | | Income tax expense | $1,515 | $802 | | Net income | $3,778 | $2,393 | | Diluted earnings per share: Common Stock | $0.23 | $0.14 | | Cash dividends per share: Common Stock | $0.32 | $0.30 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement presents Havertys' financial position as of March 31, 2025, December 31, 2024, and March 31, 2024, detailing assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (In thousands) | (In thousands) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :------------- | | **Assets** | | | | | Cash and cash equivalents | $111,941 | $120,034 | $111,818 | | Inventories | $88,704 | $83,419 | $92,078 | | Total current assets | $232,739 | $238,896 | $240,999 | | Property and equipment, net | $182,002 | $182,622 | $173,128 | | Total assets | $642,690 | $648,747 | $640,529 | | **Liabilities and Stockholders' Equity** | | | | | Accounts payable | $16,850 | $14,914 | $16,980 | | Customer deposits | $42,760 | $40,733 | $40,912 | | Total current liabilities | $128,647 | $131,565 | $131,145 | | Total liabilities | $337,329 | $341,186 | $333,839 | | Stockholders' equity | $305,361 | $307,561 | $306,690 | | Total liabilities and stockholders' equity | $642,690 | $648,747 | $640,529 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement outlines the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2025, compared to the same period in 2024, showing the net change in cash and cash equivalents Condensed Consolidated Statements of Cash Flows (Three Months Ended March 31, in thousands) | (In thousands) | 2025 | 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, cash equivalents, and restricted cash equivalents | ($8,026) | ($9,914) | | Cash, cash equivalents, and restricted cash equivalents at end of period | $118,288 | $117,863 | [Notes and Non-GAAP Reconciliations](index=7&type=section&id=Notes%20and%20Non-GAAP%20Reconciliations) This section provides a GAAP to non-GAAP reconciliation for EBITDA and defines key financial metrics [GAAP to Non-GAAP Reconciliation (EBITDA)](index=7&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation%20(EBITDA)) Havertys provides a reconciliation of GAAP measures to EBITDA, a non-GAAP financial measure, which the company believes offers additional useful information for investors - EBITDA is presented as a non-GAAP financial measure to provide additional useful information to investors, not as a substitute for GAAP measures[14](index=14&type=chunk) Reconciliation of GAAP measures to EBITDA (Three Months Ended March 31, in thousands) | (in thousands) | 2025 | 2024 | | :----------------------------- | :--- | :--- | | Income before income taxes | $5,293 | $3,195 | | Interest income, net | ($1,254) | ($1,555) | | Depreciation and amortization | $5,895 | $4,946 | | EBITDA | $9,934 | $6,586 | [Key Financial Metric Definitions](index=7&type=section&id=Key%20Financial%20Metric%20Definitions) This section defines key financial metrics used in the report, including comparable store sales and the classification of Cost of Goods Sold and SG&A expenses, clarifying how these are reported by Havertys - Comparable-store sales measure the performance of existing stores and the website by comparing sales growth for a particular month over the corresponding month in the prior year, excluding stores not open or with significant square footage changes[16](index=16&type=chunk) - Havertys includes substantially all occupancy and home delivery costs, plus a portion of warehousing expenses, in SG&A expense, which may make its gross profit not comparable to entities that include these costs in cost of goods sold[17](index=17&type=chunk) - SG&A expenses are classified as variable (selling and delivery costs, primarily commission-based compensation, third-party financing discounts, credit card fees, personnel, fuel) or fixed and discretionary (rent, depreciation, amortization, other occupancy costs, advertising, administrative costs)[18](index=18&type=chunk) [Corporate Information and Forward-Looking Statements](index=7&type=section&id=Corporate%20Information%20and%20Forward-Looking%20Statements) This section covers Havertys' Q1 2025 conference call, company profile, and a safe harbor statement for forward-looking data [Conference Call and Company Profile](index=7&type=section&id=Conference%20Call%20and%20Company%20Profile) Havertys announced details for its Q1 2025 conference call and provided a brief overview of the company, established in 1885, as a full-service home furnishings retailer operating 130 showrooms across 17 states - A live webcast of the conference call for Q1 2025 results will be held on **May 1, 2025**, at **10:00 a.m. ET**, with a replay available at ir.havertys.com[19](index=19&type=chunk) - Havertys, established in **1885**, is a full-service home furnishings retailer with **130 showrooms** in **17 Southern and Midwestern states**, offering quality merchandise in middle to upper-middle price ranges[20](index=20&type=chunk) [Safe Harbor Statement](index=8&type=section&id=Safe%20Harbor%20Statement) This section contains a safe harbor statement regarding forward-looking statements, cautioning that actual results may differ materially due to various risks and uncertainties, and the company undertakes no duty to update these statements except as required by law - The press release and conference call contain forward-looking statements subject to safe harbor provisions, which involve risks and uncertainties that could cause actual results to differ materially[21](index=21&type=chunk)[23](index=23&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, which describe expectations only as of the date they are made, and the company undertakes no duty to update them except as required by law[23](index=23&type=chunk)[24](index=24&type=chunk) - Factors that could cause actual results to differ include competition, consumer preferences, strategy implementation, brand maintenance, importing risks, raw material costs, supply chain issues, labor disruptions, economic conditions, and litigation[23](index=23&type=chunk)

Store Operations - As of December 31, 2024, Havertys operated 129 stores with approximately 4.5 million retail square feet, an increase from 124 stores and 4.387 million square feet in 2023[29]. - In 2024, Havertys opened 6 new stores and closed 1, resulting in a net increase of 5 stores for the year[33]. - Havertys plans to open an average of 5 new stores per year, primarily in former "big box" retail sites, with the first store in Houston, TX opened in 2024[32]. - The company operates 129 retail stores totaling approximately 4.5 million square feet as of December 31, 2024[112]. - The number of stores increased to 129 in 2024 from 124 in 2023, with retail square footage at year-end reaching 4,539,000[148]. Sales and Revenue - Approximately 33.6% of written sales in 2024 resulted from consultations with in-home designers, with average sales tickets for designer visits being twice that of in-store sales[28]. - Online sales accounted for approximately 3.0% of total business in 2024, indicating a focus on enhancing digital channels[36]. - Net sales for 2024 decreased by $139.2 million or 16.1% compared to 2023, attributed to the housing recession, inflationary pressures, and cautious consumer spending[148]. - Comparable store sales decreased by 16.7% in 2024 compared to 2023[148]. - The average ticket value in 2024 was $3,371, reflecting a 3.0% increase over the previous year[148]. - Net sales are recorded when merchandise is delivered to customers, reflecting revenue from merchandise sales and related fees, net of expected returns and sales tax[139]. Financial Performance - The company reported a net income of $19.956 million for 2024, down from $56.319 million in 2023, resulting in a net income margin of 2.8%[148]. - Gross profit as a percentage of net sales remained stable at 60.7% for both 2024 and 2023, with a 100 basis point increase in gross profit margins excluding LIFO impact[150]. - Selling, general and administrative (SG&A) expenses decreased by $36.6 million or 8.0% in 2024, with SG&A as a percentage of net sales rising to 58.0% from 52.9% in 2023[155]. - The effective tax rate increased to 23.7% in 2024 from 22.5% in 2023[157]. - The company had $120.0 million in cash and cash equivalents as of December 31, 2024, with no outstanding borrowings under its $80.0 million revolving credit facility[158][160]. Supply Chain and Sourcing - The company’s largest ten suppliers accounted for approximately 41.3% of product purchases in 2024, with a significant portion of wood products imported from Asia[43]. - Approximately 20.8% of case goods sales and 5.9% of upholstery sales in 2024 were generated by direct imports[44]. - The company relies on third-party producers for product supply, which may lead to operational difficulties and affect timely delivery of quality merchandise[73]. - Significant fluctuations in raw material prices could adversely affect profits, with potential impacts from supply chain disruptions and increased costs[77]. - The company’s ability to forecast supply chain needs is crucial, as significant deviations from projected demand could adversely affect financial results[78]. Workforce and Employee Engagement - Havertys' total workforce as of December 31, 2024, was 2,334, with 1,480 in retail operations and 645 in warehouse and delivery[49]. - The company emphasizes a strong safety program and employee engagement, with approximately 117,000 hours of learning consumed by team members in 2024[54]. - The company faces high employee turnover in the retail industry, which could lead to increased hiring and training costs[90]. - Labor shortages and competition may increase labor expenses and impair the ability to provide high levels of customer service[91]. Risk Factors - Approximately 58% of total furniture purchases in 2024 were for goods not produced domestically, exposing the company to political and economic risks associated with global sourcing[72]. - The company faces significant competition from various retailers, including internet-only retailers and national department stores, which may impact market share and profitability[64]. - Cyber threats and the need for robust cybersecurity measures are critical, as successful attacks could materially harm business operations[87]. - The company has implemented a cybersecurity framework to manage risks, although threats continue to evolve[103]. - The board of directors oversees cybersecurity risks, with regular updates from the Senior Vice President of Information Technology[108]. - Rising oil and gasoline prices could adversely affect profitability due to increased transportation costs[97]. Capital and Investments - Capital expenditures are expected to be approximately $27.1 million in 2025 to support operations and strategic expansion[159]. - Cash used in investing activities in 2024 consisted primarily of $32.1 million of capital expenditures, compared to $53.1 million in 2023[170][171]. - Total capital expenditures for stores in 2024 were $27.3 million, with planned expenditures of $22.7 million for 2025[173]. - The company repurchased 214,500 shares of Common Stock for $5.0 million in 2024, with approximately $8.1 million remaining under the existing authorization[163]. Financial Reporting and Audit - The consolidated financial statements of Haverty Furniture Companies, Inc. for the years ended December 31, 2024, 2023, and 2022 have been audited and present fairly the financial position of the Company as of December 31, 2024 and 2023[218]. - The audit report expressed an unqualified opinion on the Company's internal control over financial reporting as of December 31, 2024[219]. - There were no critical audit matters identified during the audit process, indicating a straightforward audit without significant issues[222]. - The financial statements are prepared in accordance with generally accepted accounting principles in the United States[218]. - The Company’s management is responsible for the financial statements, while the independent auditor's role is to express an opinion based on the audit[220]. - The audit was conducted in accordance with PCAOB standards, ensuring a thorough examination of the financial statements[221]. - The company has been audited by Grant Thornton LLP since 2016[223].

Financial Performance - Diluted earnings per share (EPS) for Q4 2024 decreased to $0.49 from $0.90 in Q4 2023, and for FY 2024, EPS was $1.19 compared to $3.36 in FY 2023[5] - Consolidated sales for Q4 2024 decreased by 12.5% to $184.4 million, and for FY 2024, sales decreased by 16.1% to $722.9 million[5] - Comparable store sales decreased by 13.7% in Q4 2024 and by 16.7% for FY 2024[5] - Net income for the twelve months ended December 31, 2024, was $19,956,000, a decrease of 64.5% compared to $56,319,000 in 2023[15] - EBITDA for the twelve months ended December 31, 2024, was $41,682,000, down 51.4% from $85,805,000 in 2023[17] Profitability and Margins - Gross profit margin for Q4 2024 was 61.9%, down from 62.4% in Q4 2023, and remained at 60.7% for FY 2024[5] - SG&A expenses as a percentage of sales increased to 57.4% in Q4 2024 from 54.4% in Q4 2023, primarily due to lower sales and increased fixed costs[9] - Dividends paid in 2024 totaled $20,468,000, down 42.1% from $35,240,000 in 2023[15] Cash Flow and Investments - Cash generated from operating activities in 2024 was $58.9 million, with a decrease in inventories of $10.5 million[9] - Net cash provided by operating activities decreased to $58,909,000 in 2024 from $97,203,000 in 2023, reflecting a decline of 39.4%[15] - Capital expenditures for 2024 were $32,092,000, a reduction of 39.5% compared to $53,115,000 in 2023[15] - The company plans capital expenditures of approximately $27.1 million for 2025[9] Shareholder Returns - The company returned $25.5 million to shareholders in 2024, including $5.0 million in share repurchases and $20.5 million in dividends[4] Future Outlook - The effective tax rate for 2025 is expected to be 26.5%, excluding the impact of discrete items[9] - The company plans to discuss future expectations and growth strategies during the conference call on February 25, 2025[21] Operational Highlights - The company opened five net new stores in 2024, marking a return to the Houston, TX market after approximately 40 years[3] - The company reported a net gain on the sale of land, property, and equipment of $153,000 in 2024, compared to a gain of $71,000 in 2023[15] - Changes in inventories resulted in a cash inflow of $10,537,000 in 2024, compared to an inflow of $24,377,000 in 2023[15] - The company emphasizes the importance of EBITDA as a meaningful measure for investors, supplementing GAAP financial results[16]

Sales Performance - Total sales for Q3 2024 decreased by $44.4 million, or 20.2%, compared to Q3 2023, with comp-store sales down 20.5% or $44.9 million [45]. - For the nine months ended September 30, 2024, total sales decreased by $112.8 million, or 17.3%, with comp-store sales down 17.7% or $114.0 million compared to the same period in 2023 [46]. Profitability - Gross profit margin for Q3 2024 was 60.2%, a decrease of 60 basis points from 60.8% in Q3 2023 [49]. - The company expects annual gross profit margins for 2024 to be between 60.0% and 60.5% [51]. Expenses - SG&A costs as a percentage of sales for Q3 2024 were 57.4%, up from 51.1% in Q3 2023, with SG&A dollars decreasing by $11.8 million, or 10.5% [52]. Cash Flow and Capital Expenditures - Cash and cash equivalents at September 30, 2024, totaled $121.2 million, with an additional $6.2 million in restricted cash equivalents [59]. - Net cash provided by operating activities was $42.0 million in the first nine months of 2024, down from $79.4 million during the same period in 2023 [64]. - Total capital expenditures for the full year of 2024 are estimated to be $33.0 million, depending on the timing of spending for capital projects [66]. Store Expansion - The company plans to open five net new locations, ending 2024 with a total of 129 stores, increasing net selling space by approximately 3.4% over 2023 [66]. Design Contribution - Design consultants contributed to 34.5% of total written sales in Q3 2024, with an average written ticket of $7,312, up from 29.0% and $6,937 in Q3 2023 [47]. Market Risk - The company's exposure to market risk has not changed materially since December 31, 2023 [68].

Financial Performance - Diluted earnings per share (EPS) decreased to $0.29 from $1.02, reflecting a significant decline in profitability [2] - Consolidated sales fell by 20.2% to $175.9 million, with comparable-store sales down 20.5% [2] - Net income for the nine months ended September 30, 2024, was $11,759 thousand, down from $41,317 thousand for the same period in 2023 [13] - EBITDA for the nine months ended September 30, 2024, was $27,666 thousand, compared to $64,334 thousand for the same period in 2023 [15] Expenses and Margins - Gross profit margin decreased to 60.2% from 60.8%, impacted by changes in the LIFO reserve [5] - Selling, general and administrative (SG&A) expenses were 57.4% of sales, an increase from 51.1% in the previous year [5] - The company plans to continue its strategic initiatives to enhance retail and operating margins in 2024 [22] Business Operations - Total written business declined by 15.3%, while comparable-store written business decreased by 16.3% [5] - Design consultants contributed 34.5% of written business in 2024, up from 29.0% in 2023 [5] - The company operates 126 showrooms across 17 states, focusing on middle to upper-middle price ranges [20] Cash Flow and Assets - Cash, cash equivalents, and restricted cash equivalents totaled $127.4 million as of September 30, 2024 [6] - Operating cash flow generated was $42.0 million, down from $79.4 million in the previous year [9] - Total assets as of September 30, 2024, were $659,302 thousand, a slight increase from $654,133 thousand at December 31, 2023, but a decrease from $676,681 thousand at September 30, 2023 [11][12] - Cash and cash equivalents at the end of the period were $127,365 thousand, down from $141,352 thousand at the end of the same period in 2023 [13] Inventory and Liabilities - Inventories decreased to $88,688 thousand as of September 30, 2024, from $102,334 thousand at September 30, 2023 [11] - Total current liabilities decreased to $137,798 thousand as of September 30, 2024, from $151,406 thousand at September 30, 2023 [12] - Customer deposits increased to $43,940 thousand as of September 30, 2024, from $46,308 thousand at September 30, 2023 [12] Capital Expenditures - Planned capital expenditures for 2024 are approximately $33.0 million, with a retail square footage increase of about 3.4% expected [7] - Capital expenditures for the nine months ended September 30, 2024, were $(24,285) thousand, compared to $(46,428) thousand for the same period in 2023 [13] Taxation - The effective tax rate for 2024 is projected to be 28.0%, an increase from the previous guidance of 27.5% [7]