Haverty Furniture(HVT) - 2025 Q1 - Quarterly Results

Q1 2025 Operating Results This section provides an overview of Havertys' financial performance and strategic initiatives for the first quarter of 2025 First Quarter 2025 Highlights Havertys achieved improved gross margins and earnings per share in Q1 2025, despite a slight decline in sales amidst market headwinds - Management reported solid Q1 results with improved margins and earnings, despite headwinds from a weak housing market, adverse weather, low consumer confidence, and trade policy shifts[2] Q1 2025 vs Q1 2024 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Diluted EPS | $0.23 | $0.14 | | Consolidated Sales (millions) | $181.6 | $184.0 | | Gross Profit Margin | 61.2% | 60.3% | | Comparable Store Sales | -4.8% | N/A | - SG&A expenses decreased by $2.2 million, primarily due to lower variable selling expenses ($2.0 million), reduced warehouse and delivery costs ($1.7 million), and decreased advertising spend ($1.1 million), partially offset by higher occupancy and administrative costs[7] Balance Sheet and Cash Flow Havertys maintained a strong balance sheet with substantial cash and no debt, generating positive operating cash flow and deploying capital for investments and shareholder returns - The company holds $118.3 million in cash and cash equivalents with no debt outstanding and has $80.0 million available under its credit facility as of March 31, 2025[7] Q1 2025 Cash Flow & Shareholder Returns (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating Cash Flow | $6.2 | $3.1 | | Capital Expenditures | ($6.1) | ($6.4) | | Free Cash Flow | $0.1 | ($3.3) | | Share Repurchases | $2.0 | $— | | Dividends Paid | $5.2 | $4.8 | | Total Cash Returns | $7.2 | $4.8 | - Cash from operating activities was $6.2 million, driven by earnings and working capital changes, including a $5.3 million increase in inventories and a $2.0 million increase in customer deposits[7] 2025 Outlook and Guidance Havertys reaffirmed its gross profit margin and fixed SG&A guidance for 2025, while lowering variable SG&A and capital expenditure forecasts due to tariff uncertainty Full Year 2025 Guidance | Metric | Guidance | Note | | :--- | :--- | :--- | | Gross Profit Margins | 60.0% to 60.5% | Unchanged | | Fixed & Discretionary SG&A (millions) | $291.0 - $293.0 | Unchanged | | Variable SG&A (% of sales) | 18.6% to 19.0% | Decreased | | Effective Tax Rate | ~26.5% | Excludes discrete items | | Capital Expenditures (millions) | ~$24.0 | Decreased by $3M | - The company is actively monitoring tariff negotiations and evaluating potential impacts to mitigate effects on the business. Current guidance excludes proposed tariffs that have been paused[7] - The company expects to increase its retail square footage by approximately 2.0% in 2025 compared to 2024[7] Financial Statements This section presents the detailed consolidated financial statements, including income statements, balance sheets, and cash flow statements Condensed Consolidated Statements of Income Despite a slight decrease in net sales, Q1 2025 saw improved gross profit and a significant increase in net income and diluted EPS due to effective cost management Q1 2025 Income Statement Summary (in thousands) | Account | Q1 2025 | Q1 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 | | Diluted EPS (Common) | $0.23 | $0.14 | Condensed Consolidated Balance Sheets As of March 31, 2025, the company maintained a strong financial position with total assets of $642.7 million, healthy liquidity, and solid stockholders' equity Balance Sheet Highlights (in thousands) | Account | Mar 31, 2025 | Mar 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $111,941 | $111,818 | | Inventories | $88,704 | $92,078 | | Total assets | $642,690 | $640,529 | | Total current liabilities | $128,647 | $131,145 | | Total liabilities | $337,329 | $333,839 | | Total stockholders' equity | $305,361 | $306,690 | Condensed Consolidated Statements of Cash Flows Q1 2025 saw a significant increase in net cash from operating activities, with stable investing outflows and financing primarily directed towards dividends and stock repurchases Q1 2025 Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,154 | $3,135 | | Net cash used in investing activities | ($6,122) | ($6,351) | | Net cash used in financing activities | ($8,058) | ($6,698) | | Decrease in cash | ($8,026) | ($9,914) | | Cash at end of period | $118,288 | $117,863 | Supplemental Information This section provides additional financial details, including non-GAAP reconciliations and important definitions and disclosures GAAP to Non-GAAP Reconciliation The company provides a reconciliation of EBITDA, a non-GAAP measure, which significantly increased in Q1 2025 primarily due to higher income before taxes EBITDA Reconciliation (in thousands) | Account | Q1 2025 | Q1 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 | Definitions and Disclosures This section defines key metrics and clarifies accounting practices, noting potential impacts on gross profit comparability, and includes a standard Safe Harbor statement for forward-looking statements - The company includes nearly all occupancy and home delivery costs within SG&A, which means its gross profit figures may not be directly comparable to other retailers who might include these costs in Cost of Goods Sold[17] - SG&A expenses are classified as either variable (selling and delivery costs) or fixed/discretionary (rent, advertising, administrative costs)[18] - The release contains a Safe Harbor statement, cautioning that forward-looking statements regarding future performance are subject to numerous risks and uncertainties, such as economic conditions, competition, and supply chain issues[21][23]