Haverty Furniture(HVT)2025-03-06 20:07Store Operations and Expansion - 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]. - The company plans to open an average of five new stores per year, with the first store in Houston, TX, opened in 2024, targeting former "big box" retail sites[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, up from 124 in 2023[148]. Sales and Revenue - In 2024, approximately 33.6% of written sales resulted from consultations with in-home designers, with average sales tickets for designer visits being twice that of in-store sales[28]. - Total online sales for 2024 accounted for approximately 3.0% of Havertys' total business[36]. - Net sales for 2024 decreased by 3,371, reflecting a 3.0% increase over the previous year[148]. Financial Performance - 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 120.0 million in cash and cash equivalents and 58.9 million, driven primarily by net income of 27.9 million[167]. Supply Chain and Sourcing - In 2024, Havertys' merchandise purchases from the largest ten suppliers accounted for approximately 41.3% of total product purchases[43]. - Approximately 20.8% of case goods sales and 5.9% of upholstery sales in 2024 were generated by direct imports[44]. - 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 relies on third-party producers for nearly all products, which may lead to operational difficulties and affect timely delivery and quality[73]. - The company’s ability to forecast supply chain needs is critical, as significant deviations from projected demand may negatively impact operations and financial condition[78]. Employee and Training - As of December 31, 2024, Havertys' total workforce was 2,334, with 1,480 in retail operations and 645 in warehouse and delivery[49]. - The company invested approximately 117,000 hours in employee training and development in 2024[54]. - High employee turnover in the retail industry may lead to increased hiring and training costs, impacting operational efficiency[90]. - The company emphasizes the importance of attracting and retaining key management personnel to support strategic growth plans[92]. Risk Factors - 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 are evolving, and the company invests in security technology to protect against data breaches and cyber-attacks[87]. - The company faces risks from cybersecurity threats, with processes in place to manage these risks as part of its enterprise risk management[103]. - Economic downturns could adversely affect consumer spending on discretionary items, impacting sales and profitability[94]. - Rising oil and gasoline prices may negatively impact profitability due to increased transportation costs[97]. - The company is subject to risks associated with tariffs and import measures, which could lead to increased costs and affect pricing strategies[75]. Financial Reporting and Compliance - The consolidated financial statements of Haverty Furniture Companies, Inc. for the year ended December 31, 2024, present a fair view of the company's financial position compared to 2023[218]. - The audit opinion expressed an unqualified view on the financial statements, indicating no material misstatements were found during the audit[219]. - The company has maintained compliance with the PCAOB standards, ensuring the integrity of its financial reporting[221]. - No critical audit matters were identified during the audit, suggesting a stable financial reporting environment[222]. - The company’s internal control over financial reporting was evaluated, confirming its effectiveness as of December 31, 2024[219]. Capital Expenditures and Investments - Capital expenditures are expected to be approximately 32.1 million of capital expenditures, compared to 27.3 million, with planned outlays for 2025 projected at 25.0 million as of August 5, 2022, with approximately 5.0 million during 2024, with approximately $8.1 million remaining under the existing authorization[163].