Financial Data and Key Metrics Changes - Q1 2025 sales were $181.6 million, a decrease of 1.3% year-over-year, with comparable store sales down 4.8% [3][18] - Gross margins increased to 61.2% from 60.3%, reflecting improved product selection and merchandise mix [4][18] - Pre-tax profits rose to $5.3 million, with an operating margin of 2.9%, compared to $3.2 million and 1.7% in Q1 2024 [4][19] - Net income for Q1 2025 was $3.8 million, or $0.23 per diluted share, compared to $2.4 million, or $0.14 per share in the same quarter last year [19] Business Line Data and Key Metrics Changes - The design business accounted for approximately 33% of total business, with an average ticket of over $3,300, up about 4% [6] - The designer average ticket grew to over $7,400, an increase of over 9% [6] - Weakness was noted in dining and occasional categories, while upholstery, bedroom, and mattress categories performed in line with expectations [6] Market Data and Key Metrics Changes - Written sales were down 2.6% with comparable sales down 6.3% [3] - Sales for Presidents' Day were disappointing, down roughly 10% over the two-week period [5] - Traffic softened but remained positive in the low single digits, with conversion rates stabilizing and showing some improvement compared to last year [5] Company Strategy and Development Direction - The company plans to roll out a new point of purchase and tagging program to enhance the in-store customer experience [7] - The strategy includes increasing inventories of best-selling products to mitigate supply chain disruptions due to tariffs [11][12] - The company aims to open five new stores annually, with a cautious approach based on current market conditions [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with Q1 results despite challenges such as housing market lows, high interest rates, and declining consumer confidence [4][16] - The company is well-positioned to navigate challenges due to its strong brand, debt-free balance sheet, and customer focus [17] - Future guidance includes expectations for gross margins between 60% and 60.5% for 2025, factoring in current tariffs [21][22] Other Important Information - Inventory levels increased by approximately $5 million or about 6% since year-end 2024 [11] - The company has no funded debt and ended Q1 with $111.9 million in cash and cash equivalents [20] - CapEx for Q1 2025 was $6.1 million, with a planned reduction to $24 million for the year due to tariff uncertainties [22] Q&A Session Summary Question: Impact of winter storms on business - Management noted that January was down almost 2% in written business, February down about 5%, and March was flat, with multiple storms impacting operations [26][27][28] Question: Price increases due to tariffs - Management confirmed targeted price increases will be implemented, but they expect minimal impact on consumers due to supplier cooperation [31][32] Question: Changes in competition - Management observed aggressive promotions from competitors but did not believe promotional activity was the primary issue affecting sales [34][35] Question: Reduction in CapEx guidance - Management explained the $3 million reduction in CapEx was due to tariff uncertainties, leading to a cautious approach on store expansion [36][37] Question: Performance of new stores - Management expressed satisfaction with new store performance, noting they leverage existing distribution networks and initial traffic has been good [47][48]

Financial Data and Key Metrics Changes - Q1 2025 sales were $181.6 million, a decrease of 1.3% year-over-year, with comparable store sales down 4.8% [3][18] - Gross margins increased to 61.2% from 60.3%, reflecting improved product selection and merchandise mix [4][18] - Pre-tax profits rose to $5.3 million, with an operating margin of 2.9%, compared to $3.2 million and 1.7% in Q1 2024 [4][19] - Net income for Q1 2025 was $3.8 million, or $0.23 per diluted share, compared to $2.4 million, or $0.14 per share, in the same quarter last year [19] Business Line Data and Key Metrics Changes - The design business accounted for approximately 33% of total business, with an average ticket of over $3,300, up about 4% [6] - The designer average ticket grew to over $7,400, an increase of over 9% [6] - Weakness was noted in dining and occasional categories, while upholstery, bedroom, and mattress categories performed in line with expectations [6] Market Data and Key Metrics Changes - Written sales were down 2.6% with comparable sales down 6.3% [3] - Sales for the Presidents' Day event were disappointing, down roughly 10% over the two-week period [5] - Traffic softened but remained positive in the low single digits, with conversion rates stabilizing and showing some improvement compared to last year [5] Company Strategy and Development Direction - The company plans to roll out a new point of purchase and tagging program to enhance the in-store customer experience [7] - The strategy includes increasing inventories of best-selling products to improve service speed and mitigate tariff impacts [11][12] - The company aims to open five new stores annually, with a cautious approach due to current market conditions [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with Q1 results despite challenges from the housing market, high interest rates, and consumer confidence issues [4][16] - The company is well-positioned to navigate challenges due to its strong brand, debt-free balance sheet, and customer focus [17] - Future guidance includes expectations for gross margins between 60% and 60.5% for 2025, factoring in current tariffs [21][22] Other Important Information - SG&A expenses decreased by $2.2 million or 1.9% to $107.2 million, representing 59% of sales [19] - Inventory levels increased by approximately $5 million or about 6% since year-end 2024 [11][20] - The company has halted most direct shipments from China due to tariffs, which could cause temporary supply disruptions [10] Q&A Session Summary Question: Impact of winter storms on business - Management noted that January was down almost 2% in written business, February down about 5%, and March was flat, with multiple storms impacting operations [26][27][28] Question: Price increases due to tariffs - Management confirmed targeted price increases will be implemented, but they expect minimal impact on consumers due to supplier cooperation [31][32] Question: Changes in competition - Management observed aggressive promotions from competitors but did not believe promotional activity was the primary issue affecting their performance [34][35] Question: Reduction in CapEx guidance - Management explained the $3 million reduction in CapEx was due to tariff uncertainty, prompting a cautious approach to store expansion [36][37] Question: Performance of new stores - Management reported positive performance from new stores, leveraging existing distribution networks, and noted that initial traffic has been good [47][48]

Core Points - Havertys Furniture is hosting a Military Appreciation Event on May 3 across all 130 showrooms to honor local military families [1][5] - The company is partnering with Tempur-Pedic to donate 78 mattresses to The Joel Fund, a non-profit organization supporting military veterans and their families [3][4] - The event includes exclusive giveaways, refreshments, special financing, and a chance to win a $1,000 gift certificate [2] Company Overview - Havertys, established in 1885, operates 130 showrooms in 17 states, offering a wide selection of home furnishings in middle to upper-middle price ranges [6] - The company has a history of supporting military families, including ongoing military discounts [4] Non-Profit Partnership - The Joel Fund, founded in 2016, aims to reconnect veterans to life at home through community engagement and support programs [7] - The donation of mattresses will directly benefit military families identified by The Joel Fund as in need [3][4]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported net sales of $181.6 million, a decrease of 1.3% compared to the prior year quarter, with comparable store sales down 4.8% [3][17] - Gross profit margin increased by 90 basis points to 61.2% from 60.3% due to product selection and merchandise mix [4][17] - SG&A expenses decreased by $2.2 million or 1.9% to $107.2 million, representing 59% of sales, down from 59.4% in the prior year quarter [18] - Net income for Q1 2025 was $3.8 million or $0.23 per diluted share, compared to $2.4 million or $0.14 per share in the comparable quarter last year [18] Business Line Data and Key Metrics Changes - The design business improved to approximately 33% of total business, with the designer average ticket growing over 9% to over $7,400 [6] - Average ticket rose by approximately 4% to just over $3,300, while written sales were down 2.6% with comps down 6.3% [3][6] Market Data and Key Metrics Changes - The housing market continues to operate at thirty-year lows, influenced by affordability issues, inflated interest rates, and declining consumer confidence [4][16] - Sales for the Presidents' Day event were disappointing, down roughly 10% over the two-week period [5] Company Strategy and Development Direction - The company plans to roll out a new point of purchase and tagging program to enhance the in-store customer experience by Labor Day [7] - The company aims to open five new stores a year but will be cautious based on current conditions, with plans for a third store in Houston and relocating an existing store [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges such as housing affordability, high interest rates, and tariffs, citing a strong brand and debt-free balance sheet [16] - The company anticipates gross margins for 2025 to be between 60% and 60.5%, with fixed and discretionary SG&A expenses expected to increase due to store growth and inflation [21] Other Important Information - The company has halted most direct shipments from China due to tariffs, which could cause temporary supply disruptions [10] - Inventories increased by approximately $5 million or about 6% since year-end 2024, with expectations for further increases in Q2 [11][12] Q&A Session Summary Question: Impact of winter storms on business - Management noted that multiple winter storms impacted business, but did not quantify the exact impact [24][27] Question: Price increases due to tariffs - Management confirmed that targeted price increases will be implemented, but they expect minimal impact on consumers due to supplier support [30][31] Question: Changes in competition - Management observed aggressive promotions from competitors but did not believe it was affecting their promotional activity [33] Question: Reduction in CapEx guidance - The reduction in CapEx guidance was due to tariff uncertainty, prompting a cautious approach to store expansion [35][36] Question: Performance of new stores - Management reported positive performance from new stores, leveraging existing distribution networks, and expressed optimism for future openings [47][49]

Company Performance - Haverty Furniture (HVT) reported quarterly earnings of $0.23 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, and up from $0.14 per share a year ago, representing an earnings surprise of 64.29% [1] - The company posted revenues of $181.57 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.18%, although this is a decrease from year-ago revenues of $184 million [2] - Over the last four quarters, Haverty Furniture has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Outlook - Haverty Furniture shares have declined approximately 17.4% since the beginning of the year, compared to a decline of 5.5% for the S&P 500 [3] - The current consensus EPS estimate for the coming quarter is $0.22 on revenues of $178.98 million, and for the current fiscal year, it is $1.28 on revenues of $751.92 million [7] Industry Context - The Retail - Home Furnishings industry, to which Haverty Furniture belongs, is currently ranked in the bottom 16% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Haverty's stock performance [5]

[Q1 2025 Operating Results](index=1&type=section&id=Havertys%20Reports%20Operating%20Results%20for%20First%20Quarter%202025) This section provides an overview of Havertys' financial performance and strategic initiatives for the first quarter of 2025 [First Quarter 2025 Highlights](index=1&type=section&id=First%20quarter%202025%20versus%20first%20quarter%202024) 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](index=2&type=chunk) 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](index=7&type=chunk) [Balance Sheet and Cash Flow](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025) 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](index=7&type=chunk) 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](index=7&type=chunk) [2025 Outlook and Guidance](index=2&type=section&id=Expectations%20and%20Other) 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](index=7&type=chunk) - The company expects to increase its retail square footage by approximately **2.0%** in 2025 compared to 2024[7](index=7&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents the detailed consolidated financial statements, including income statements, balance sheets, and cash flow statements [Condensed Consolidated Statements of Income](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) 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](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) 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](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) 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](index=7&type=section&id=Supplemental%20Information) This section provides additional financial details, including non-GAAP reconciliations and important definitions and disclosures [GAAP to Non-GAAP Reconciliation](index=7&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) 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](index=7&type=section&id=Definitions%20and%20Disclosures) 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](index=17&type=chunk) - SG&A expenses are classified as either variable (selling and delivery costs) or fixed/discretionary (rent, advertising, administrative costs)[18](index=18&type=chunk) - 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](index=21&type=chunk)[23](index=23&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)

Financial Performance - Net sales for Q2 2021 reached $249.99 million, a significant increase of 127.3% compared to $109.97 million in Q2 2020[8] - Gross profit for the six months ended June 30, 2021, was $276.54 million, up 73.8% from $159.20 million in the same period of 2020[8] - Net income for the six months ended June 30, 2021, was $42.26 million, compared to $15.46 million in 2020, representing a 173.5% increase[9] - For the three months ended June 30, 2021, net income was $22.858 million, compared to $13.640 million for the same period in 2020, representing a year-over-year increase of 67.3%[18] - For the six months ended June 30, 2021, net income totaled $42.264 million, up from $15.459 million in the same period of 2020, marking a significant increase of 173.5%[18] - Total revenues for the three months ended June 30, 2021, were $249.99 million, a significant increase from $109.97 million in the same period of 2020[28] Assets and Liabilities - Total current assets increased to $380.59 million as of June 30, 2021, up 20.3% from $316.24 million at the end of 2020[7] - Total liabilities rose to $471.73 million as of June 30, 2021, an increase of 10.4% from $427.41 million in 2020[7] - Cash and cash equivalents at the end of the period were $242.06 million, compared to $157.76 million at the end of June 2020, reflecting a 53.3% increase[9] - Customer deposits increased to $116.08 million as of June 30, 2021, a 34.7% rise from $86.18 million in 2020[7] - Total stockholders' equity increased from $270.314 million on March 31, 2021, to $289.412 million on June 30, 2021, reflecting a growth of 7.1%[17] Expenses and Margins - Gross profit for Q2 2021 was 56.6%, an increase of 240 basis points from 54.2% in Q2 2020, while the first half of 2021 gross profit was 56.8% compared to 55.0% in the same period of 2020[56] - SG&A expenses as a percentage of sales for Q2 2021 were 45.0%, down from 66.1% in Q2 2020, reflecting operational changes due to store closures[58] - Variable SG&A expenses for Q2 2021 were $41.96 million, representing 16.8% of net sales, while fixed and discretionary expenses were $70.44 million, or 28.0% of net sales[61] - SG&A expenses increased by $39.7 million for Q2 2021 and $52.0 million for the six months ended June 30, 2021, compared to the same prior year periods[58] Operational Challenges - The company experienced supply chain disruptions and product shortages due to increased consumer demand and staffing shortages[14] - The company faced challenges in product availability due to long production lead times, with custom upholstery orders averaging 16 weeks compared to 4-6 weeks pre-pandemic[55] - The company has encountered labor shortages affecting distribution and delivery capacity, impacting overall operations[49] Cash Flow and Financing - Net cash provided by operating activities was $57.6 million in the first six months of 2021, driven by net income of $42.2 million and non-cash adjustments of $12.7 million[71] - Cash used in investing activities was $10.9 million in the first six months of 2021, compared to cash provided of $65.1 million during the same period in 2020[74] - Cash used in financing activities was $11.4 million in the first six months of 2021, primarily reflecting $8.6 million in cash dividends paid[75] - The company had $60.0 million available under a revolving credit facility, with $13.6 million available to borrow as of June 30, 2021[66] Future Plans and Expectations - The company plans to open new locations in Myrtle Beach, SC, and Austin, TX, while closing a location in Dallas, TX, with net selling space expected to be slightly up compared to 2020[76] - The company expects fixed and discretionary expenses for the full year of 2021 to be approximately $275.0 to $278.0 million[64] - The company anticipates full-year gross profit margins for 2021 to be between 56.5% and 56.8%[57] - The company expects to recognize approximately $10.4 million in total compensation cost related to unvested equity awards over a weighted-average period of two years[40] Stock and Shareholder Information - Dividends declared for common stock were $4.261 million ($0.25 per share) and for Class A common stock were $0.301 million ($0.23 per share) during the three months ended June 30, 2021[16] - The company authorized an additional $30.0 million for share repurchases, with approximately $16.8 million remaining under the existing authorization as of June 30, 2021[68]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for Haverty Furniture Companies, Inc. [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Haverty Furniture Companies, Inc., including the balance sheets, statements of comprehensive income, and cash flows, along with detailed notes explaining the company's business, accounting policies, and specific financial items [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific points in time | Item | March 31, 2021 (Unaudited, In thousands) | December 31, 2020 (In thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $210,124 | $200,058 | | Inventories | $103,569 | $89,908 | | Total current assets | $342,700 | $316,244 | | Total assets | $708,272 | $680,372 | | **Liabilities** | | | | Customer deposits | $104,728 | $86,183 | | Total current liabilities | $214,928 | $204,041 | | Total liabilities | $437,958 | $427,405 | | **Stockholders' Equity** | | | | Total stockholders' equity | $270,314 | $252,967 | - Total assets increased by **$27.9 million** from December 31, 2020, to March 31, 2021, driven primarily by increases in cash and cash equivalents and inventories[8](index=8&type=chunk) - Customer deposits, a current liability, significantly increased by **$18.5 million**, reflecting higher advance payments from customers[8](index=8&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This statement outlines the company's financial performance over a period, showing net sales, gross profit, and net income | Item | Three Months Ended March 31, 2021 (In thousands, except per share data) | Three Months Ended March 31, 2020 (In thousands, except per share data) | | :--- | :--- | :--- | | Net sales | $236,491 | $179,432 | | Gross profit | $135,034 | $99,553 | | Income before interest and income taxes | $25,308 | $2,086 | | Net income | $19,406 | $1,819 | | Basic earnings per share (Common Stock) | $1.07 | $0.10 | | Diluted earnings per share (Common Stock) | $1.04 | $0.09 | | Cash dividends per share (Common Stock) | $0.22 | $0.20 | - Net sales increased by **31.8%** to **$236.5 million** in Q1 2021 compared to **$179.4 million** in Q1 2020[9](index=9&type=chunk) - Net income saw a substantial increase from **$1.8 million** in Q1 2020 to **$19.4 million** in Q1 2021[9](index=9&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement details the cash inflows and outflows from operating, investing, and financing activities over a period | Item | Three Months Ended March 31, 2021 (In thousands) | Three Months Ended March 31, 2020 (In thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $19,601 | $(21,579) | | Net cash used in investing activities | $(4,745) | $(2,476) | | Net cash (used in) provided by financing activities | $(4,788) | $32,922 | | Increase in cash, cash equivalents and restricted cash equivalents | $10,068 | $8,867 | | Cash, cash equivalents and restricted cash equivalents at end of period | $216,839 | $91,269 | - Operating activities generated **$19.6 million** in cash in Q1 2021, a significant improvement from a **$21.6 million** cash usage in Q1 2020[11](index=11&type=chunk) - Cash used in investing activities increased to **$4.7 million** in Q1 2021, primarily due to higher capital expenditures[11](index=11&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [NOTE A – Business and Basis of Presentation](index=6&type=section&id=NOTE%20A%20%E2%80%93%20Business%20and%20Basis%20of%20Presentation) Haverty Furniture Companies, Inc. operates as a retailer of residential furniture within a single reportable segment. The unaudited interim financial statements are prepared in accordance with Form 10-Q, relying on management estimates, and the company believes any potential liabilities from ordinary course legal proceedings will not materially impact its financial condition - The Company operates as a retailer of residential furniture in the middle to upper-middle price ranges, exclusively under the Havertys brand, and reports within a single segment[13](index=13&type=chunk) - Interim financial statements are unaudited and prepared in accordance with Form 10-Q, requiring management estimates and assumptions[13](index=13&type=chunk)[14](index=14&type=chunk) - The Company believes that liabilities from ordinary course legal proceedings will not have a material adverse effect on its financial condition, results of operations, or cash flows[15](index=15&type=chunk) [Note B – COVID-19](index=6&type=section&id=Note%20B%20%E2%80%93%20COVID-19) The COVID-19 pandemic led to store closures and delivery halts in March 2020, with phased reopenings by June 2020. Post-reopening, business has been strong due to increased consumer spending on homes, but the company faces challenges with product shortages, supply chain delays, and staffing issues, with the pandemic's long-term influence remaining uncertain - Havertys closed all stores and halted deliveries in mid-March 2020, reopening 103 locations by May 1, 2020, and the remaining 17 by June 20, 2020[16](index=16&type=chunk) - Since reopening, business has been strong, with consumers spending more on homes, but manufacturers face demand challenges, product shortages, and distribution/delivery capacity issues due to staffing[17](index=17&type=chunk) - The duration of the pandemic's influence on consumers, the 'nesting' economy, and the business cannot be reasonably estimated, and future estimates and assumptions could change significantly[18](index=18&type=chunk) [NOTE C – Stockholders' Equity](index=7&type=section&id=NOTE%20C%20%E2%80%93%20Stockholders%27%20Equity) Stockholders' equity increased from $252.967 million at December 31, 2020, to $270.314 million at March 31, 2021, primarily driven by net income of $19.406 million, partially offset by dividends declared | Item | Balances at Dec 31, 2020 (In thousands) | Net income (In thousands) | Dividends declared (In thousands) | Balances at Mar 31, 2021 (In thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Stockholders' Equity | $252,967 | $19,406 | $(3,987) | $270,314 | | Common Stock | $29,600 | - | - | $29,789 | | Class A Common Stock | $1,996 | - | - | $1,842 | | Retained Earnings | $304,626 | $19,406 | $(3,987) | $320,045 | - Net income contributed **$19.406 million** to retained earnings for the three months ended March 31, 2021[19](index=19&type=chunk) - Dividends declared for Common Stock were **$0.22 per share** (**$3.717 million** total) and for Class A Common Stock were **$0.20 per share** (**$0.270 million** total) in Q1 2021[19](index=19&type=chunk) [NOTE D – Interim LIFO Calculations](index=9&type=section&id=NOTE%20D%20%E2%80%93%20Interim%20LIFO%20Calculations) The company's interim LIFO calculations are based on management's estimates of inventory levels and inflation rates, which are subject to change upon final year-end inventory valuations - Interim LIFO calculations are based on management's estimates of inventory levels and inflation rates[21](index=21&type=chunk) - These interim results are subject to change based on final year-end LIFO inventory valuations[21](index=21&type=chunk) [NOTE E – Fair Value of Financial Instruments](index=9&type=section&id=NOTE%20E%20%E2%80%93%20Fair%20Value%20of%20Financial%20Instruments) The fair values of short-term financial instruments like cash, receivables, and payables approximate their carrying values. Assets and liabilities related to self-directed, non-qualified deferred compensation plans are valued using Level 1 quoted market prices - Fair values of cash, cash equivalents, restricted cash, accounts receivable, accounts payable, and customer deposits approximate their carrying values due to their short-term nature[22](index=22&type=chunk) - Assets for deferred compensation plans were approximately **$8.8 million** at March 31, 2021, and **$7.9 million** at December 31, 2020, valued using Level 1 quoted market prices[22](index=22&type=chunk) - Related liabilities for deferred compensation plans were approximately **$8.9 million** at March 31, 2021, and **$8.1 million** at December 31, 2020[22](index=22&type=chunk) [NOTE F – Credit Agreement](index=9&type=section&id=NOTE%20F%20%E2%80%93%20Credit%20Agreement) The company has a $60.0 million revolving credit facility, maturing September 27, 2024, secured by various assets. Borrowings of $43.8 million in March 2020 were repaid by June 2020, and as of March 31, 2021, there were no outstanding amounts with $15.5 million net availability - The Credit Agreement is a **$60.0 million** revolving credit facility, secured by inventory, accounts receivable, cash, and other personal property, maturing on **September 27, 2024**[24](index=24&type=chunk) - The company borrowed **$43.8 million** in March 2020 and repaid it in June 2020[25](index=25&type=chunk) - As of March 31, 2021, the borrowing base was **$15.5 million**, with no outstanding letters of credit, resulting in **$15.5 million** net availability[25](index=25&type=chunk) [Note G – Revenues](index=10&type=section&id=Note%20G%20%E2%80%93%20Revenues) Revenue from merchandise sales and service fees is recognized upon delivery, net of returns and sales tax. Customer deposits, recorded upon receipt, totaled $104.7 million at March 31, 2021. The company disaggregates revenue by major product categories, showing Upholstery as the largest segment - Revenue is recognized from merchandise sales and related service fees, net of expected returns and sales tax, at the time of delivery to the customer[27](index=27&type=chunk) - Customer deposits increased to **$104.7 million** at March 31, 2021, from **$86.2 million** at December 31, 2020[27](index=27&type=chunk) | Product Category | Q1 2021 Net Sales (in thousands) | % of Net Sales (Q1 2021) | Q1 2020 Net Sales (in thousands) | % of Net Sales (Q1 2020) | | :--- | :--- | :--- | :--- | :--- | | Case Goods | $88,841 | 37.6% | $62,106 | 34.6% | | Upholstery | $95,626 | 40.4% | $73,629 | 41.0% | | Mattresses | $20,481 | 8.7% | $18,821 | 10.5% | | Accessories and Other | $31,543 | 13.3% | $24,876 | 13.9% | | Total | $236,491 | 100.0% | $179,432 | 100.0% | [NOTE H – Leases](index=10&type=section&id=NOTE%20H%20%E2%80%93%20Leases) The company utilizes operating leases for retail stores, offices, warehouses, and equipment, with terms ranging from 1 to 14 years and extension options. Variable lease payments, based on sales or usage, are expensed as incurred. Total lease expense for Q1 2021 was $13.3 million, with $13.1 million in operating cash flows from operating leases - The company has operating leases for retail stores, offices, warehouses, and equipment, with remaining terms of **1 to 14 years** and options to extend up to **20 years**[29](index=29&type=chunk) - Variable lease payments, based on sales volume or asset usage, are not included in the initial measurement of right-of-use assets or lease liabilities and are recorded as lease expense when incurred[30](index=30&type=chunk) | Item | Three Months Ended March 31, 2021 (In thousands) | Three Months Ended March 31, 2020 (In thousands) | | :--- | :--- | :--- | | Operating lease cost | $11,806 | $10,431 | | Variable lease cost | $1,508 | $1,615 | | Total lease expense | $13,314 | $12,046 | | Operating cash flows from operating leases | $13,093 | $9,996 | [NOTE I – Income Taxes](index=11&type=section&id=NOTE%20I%20%E2%80%93%20Income%20Taxes) The effective tax rate for the three months ended March 31, 2021, was 23.5%, an increase from 20.9% in the prior year, primarily due to state income taxes and additional tax expense from vested stock awards - The effective tax rate was **23.5%** for Q1 2021, up from **20.9%** for Q1 2020[34](index=34&type=chunk) - The primary difference from the statutory rate was due to state income taxes and additional tax expense from vested stock awards[34](index=34&type=chunk) [NOTE J – Stock Based Compensation Plan](index=12&type=section&id=NOTE%20J%20%E2%80%93%20Stock%20Based%20Compensation%20Plan) The company's stock-based compensation plan includes service-based and performance-based restricted stock awards. For Q1 2021, 114,368 service-based and 91,485 performance-based awards were granted/issued. Total compensation expense recognized was $2.7 million, with $12.2 million in unvested costs expected to be recognized over 2.1 years | Award Type | Outstanding at Dec 31, 2020 (Number of Awards) | Granted/Issued (Q1 2021, Number of Awards) | Awards vested or rights exercised (Q1 2021, Number of Awards) | Outstanding at Mar 31, 2021 (Number of Awards) | | :--- | :--- | :--- | :--- | :--- | | Service-Based Restricted Stock Awards | 239,281 | 114,368 | — | 352,424 | | Performance-Based Restricted Stock Awards | 213,895 | 91,485 | (56,578) | 326,067 | - The total fair value of performance-based restricted stock awards that vested during Q1 2021 was approximately **$2.0 million**[37](index=37&type=chunk) - Compensation expense for all awards was approximately **$2.7 million** for Q1 2021, up from **$1.0 million** in Q1 2020, with **$12.2 million** in unvested costs remaining[38](index=38&type=chunk) [NOTE K – Earnings Per Share](index=13&type=section&id=NOTE%20K%20%E2%80%93%20Earnings%20Per%20Share) The company reports earnings per share using the two-class method, reflecting the preferential dividend rate of Common Stock over Class A Common Stock. For Q1 2021, basic EPS for Common Stock was $1.07 and for Class A Common Stock was $1.00 - Earnings per share are reported using the two-class method, assuming 100% of earnings are distributed as dividends based on contractual rights[40](index=40&type=chunk) - Common Stock has a preferential dividend rate of at least **105%** of the dividend paid on Class A Common Stock[41](index=41&type=chunk) | Earnings Per Share | Three Months Ended March 31, 2021 (Dollars per Share) | Three Months Ended March 31, 2020 (Dollars per Share) | | :--- | :--- | :--- | | Basic earnings per share: | | | | Common Stock | $1.07 | $0.10 | | Class A Common Stock | $1.00 | $0.09 | | Diluted earnings per share: | | | | Common Stock | $1.04 | $0.09 | | Class A Common Stock | $0.98 | $0.09 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&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 and condition, discussing the impact of COVID-19, sales trends, profitability, expenses, liquidity, and capital resources for the three months ended March 31, 2021 [Forward-Looking Statements](index=14&type=section&id=Forward-Looking%20Statements) This subsection includes a cautionary statement regarding forward-looking statements, noting that they involve risks and uncertainties that could cause actual results to differ materially from expectations, and the company undertakes no obligation to update them - Statements in the Form 10-Q that are not historical facts are considered 'forward-looking statements' and involve risks and uncertainties[44](index=44&type=chunk) - Known material risk factors are described in 'Item 1A. Risk Factors' of the company's Form 10-K[44](index=44&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements unless required by law[44](index=44&type=chunk) [Impact of COVID-19 on Our Business](index=14&type=section&id=Impact%20of%20COVID-19%20on%20Our%20Business) The COVID-19 pandemic caused significant disruption, leading to store closures, furloughs, and workforce reductions in early 2020. The company implemented financial strengthening measures. Since reopening, business has been strong due to increased home spending, but challenges persist with product shortages, supply chain issues, and staffing difficulties, making the pandemic's future impact uncertain - The company closed stores and ceased delivery in mid-March 2020, furloughed **87%** of its workforce, and made permanent reductions of approximately **1,200 team members**[45](index=45&type=chunk) - Financial strengthening steps included reviewing operating expenses, reducing capital expenditures, temporary borrowing (**$43.8 million** repaid), and a **$70.0 million** sale-leaseback transaction[46](index=46&type=chunk) - Post-reopening, business has been strong due to increased consumer spending on homes, but product shortages, supply chain delays, and distribution/delivery staffing issues persist[47](index=47&type=chunk) [Net Sales](index=15&type=section&id=Net%20Sales) Net sales for Q1 2021 increased by 31.8% to $236.5 million compared to Q1 2020, with comparable-store sales (excluding March 2020) up 11.5%. Written business for the first two months of 2021 grew by 24.9%, indicating strong customer demand despite supply chain disruptions affecting mattress sales | Period | Net Sales Total Dollars (2021, In millions) | Net Sales % Change (2021) | Comp-Store Sales % Change (2021) | Net Sales Total Dollars (2020, In millions) | Net Sales % Change (2020) | Comp-Store Sales % Change (2020) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Q1 | $236.5 | 31.8% | 11.5% | $179.4 | (4.2)% | 11.6% | - Total sales for Q1 2021 increased by **$57.1 million** or **31.8%** compared to 2020[52](index=52&type=chunk) - Written business for the first two months of 2021 was up **24.9%** compared to the same period in 2020, with mattress business declining **180 basis points** due to supply-chain disruption[52](index=52&type=chunk)[53](index=53&type=chunk) [Gross Profit](index=15&type=section&id=Gross%20Profit) Gross profit margin for Q1 2021 improved to 57.1%, a 160 basis point increase from 55.5% in the prior year, primarily due to merchandise pricing and mix, partially offset by a larger negative LIFO impact. The company anticipates annual gross profit margins for 2021 to be between 56.5% and 57.0% - Gross profit for Q1 2021 was **57.1%**, an increase of **160 basis points** from **55.5%** in Q1 2020[54](index=54&type=chunk) - The increase in gross profit is primarily attributed to merchandise pricing and mix, partially offset by a larger negative LIFO impact[54](index=54&type=chunk) - Annual gross profit margins for 2021 are expected to be in the range of **56.5% to 57.0%**[54](index=54&type=chunk) [Selling, General and Administrative Expenses](index=16&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) SG&A costs as a percentage of sales decreased to 46.4% in Q1 2021 from 54.4% in Q1 2020, despite a $12.2 million dollar increase. This increase was driven by higher selling expenses, delivery costs, and incentive compensation, partially offset by reduced travel and occupancy costs. Variable expenses leveraged with sales growth, while fixed and discretionary expenses rose due to incentive compensation, health insurance, and advertising - SG&A costs as a percent of sales decreased to **46.4%** in Q1 2021 from **54.4%** in Q1 2020[56](index=56&type=chunk) - SG&A dollars increased by **$12.2 million** in Q1 2021, driven by higher selling expense (**$3.7 million**), delivery costs (**$1.4 million**), and incentive compensation (**$4.9 million**)[56](index=56&type=chunk) | Item | Q1 2021 (In thousands) | % of Net Sales (Q1 2021) | Q1 2020 (In thousands) | % of Net Sales (Q1 2020) | | :--- | :--- | :--- | :--- | :--- | | Variable | $40,707 | 17.2% | $35,337 | 19.7% | | Fixed and discretionary | $69,055 | 29.2% | $62,198 | 34.7% | | Total | $109,762 | 46.4% | $97,535 | 54.4% | [Liquidity and Capital Resources](index=17&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with $210.1 million in cash and cash equivalents at March 31, 2021, supplemented by a $60.0 million revolving credit facility with $15.5 million available. Cash flow from operations significantly improved, and the company expects sufficient funds for operating requirements, capital expenditures, dividends, and lease obligations - At March 31, 2021, the company had **$210.1 million** in cash and cash equivalents and **$6.7 million** in restricted cash equivalents[62](index=62&type=chunk) - The company believes its current cash position, operating cash flow, credit agreement funds, and access to debt markets are sufficient for operating requirements, capital expenditures, dividend payments, and lease obligations for the next several years[62](index=62&type=chunk) - Net cash provided by operating activities was **$19.6 million** in Q1 2021, a significant improvement from a **$21.6 million** use of cash in Q1 2020[68](index=68&type=chunk) [Cash and Cash Equivalents at End of Year](index=17&type=section&id=Cash%20and%20Cash%20Equivalents%20at%20End%20of%20Year) As of March 31, 2021, the company held $210.1 million in cash and cash equivalents, along with $6.7 million in restricted cash. Management believes these resources, combined with operating cash flow and credit facilities, are sufficient to meet future financial obligations and capital expenditures - Cash and cash equivalents totaled **$210.1 million**, with restricted cash and cash equivalents at **$6.7 million**, as of March 31, 2021[62](index=62&type=chunk) - The company expects its current cash position, operating cash flow, credit agreement, and access to debt markets to be sufficient for operating requirements, capital expenditures, dividend payments, and lease obligations for the next several years[62](index=62&type=chunk) [Long-Term Debt](index=17&type=section&id=Long-Term%20Debt) The company has a $60.0 million revolving credit facility, maturing September 27, 2024. As of March 31, 2021, there were no outstanding amounts, and $15.5 million was available to borrow - The company has a **$60.0 million** revolving credit facility, maturing **September 27, 2024**[63](index=63&type=chunk) - As of March 31, 2021, there were no outstanding amounts under the facility, and **$15.5 million** was available to borrow[63](index=63&type=chunk) [Leases](index=17&type=section&id=Leases) The company utilizes operating leases to finance a portion of its real estate, including retail stores, distribution centers, and support spaces - Operating leases are used to fund a portion of the company's real estate, including stores, distribution centers, and store support space[64](index=64&type=chunk) [Share Repurchases](index=17&type=section&id=Share%20Repurchases) In February 2020, the Board authorized an additional $30.0 million for the share repurchase program. The program was suspended between March and August 2020, with approximately $16.8 million remaining under the authorization as of March 31, 2021 - An additional **$30.0 million** was authorized for the share repurchase program in February 2020[65](index=65&type=chunk) - The program was suspended from March to August 2020[65](index=65&type=chunk) - Approximately **$16.8 million** remained available for repurchases under the existing authorization as of March 31, 2021[65](index=65&type=chunk) [Cash Flows Summary](index=17&type=section&id=Cash%20Flows%20Summary) The company experienced a significant shift in cash flows, with operating activities providing $19.6 million in Q1 2021 compared to a $21.6 million use in Q1 2020. Investing activities used $4.7 million, primarily for capital expenditures, while financing activities used $4.8 million, mainly for dividends - Net cash provided by operating activities was **$19.6 million** in Q1 2021, a substantial improvement from a **$21.6 million** use of cash in Q1 2020[68](index=68&type=chunk) - Cash used in investing activities increased by **$2.3 million** in Q1 2021, primarily due to capital expenditures[69](index=69&type=chunk) - Cash used in financing activities was **$4.8 million** in Q1 2021, mainly reflecting **$4.0 million** in cash dividends paid[69](index=69&type=chunk) [Operating Activities](index=17&type=section&id=Operating%20Activities) Operating activities generated **$19.6 million** in cash in Q1 2021, a significant improvement from a **$21.6 million** cash usage in Q1 2020, driven by increased net income and favorable changes in working capital - Net cash provided by operating activities was **$19.6 million** in Q1 2021, compared to a use of cash of **$21.6 million** in Q1 2020[68](index=68&type=chunk) - This improvement was primarily driven by an increase in net income and favorable changes in customer deposits, accounts payable, and inventories[68](index=68&type=chunk) [Investing Activities](index=17&type=section&id=Investing%20Activities) Cash used in investing activities increased by **$2.3 million** in Q1 2021 compared to Q1 2020, primarily due to higher capital expenditures - Cash used in investing activities increased by **$2.3 million** in Q1 2021 compared to Q1 2020, primarily due to higher capital expenditures[69](index=69&type=chunk) [Financing Activities](index=17&type=section&id=Financing%20Activities) Cash used in financing activities was **$4.8 million** in Q1 2021, mainly reflecting **$4.0 million** of cash dividends paid, contrasting with cash provided in Q1 2020 from credit facility proceeds - Cash used in financing activities was **$4.8 million** in Q1 2021, primarily reflecting **$4.0 million** of cash dividends paid[69](index=69&type=chunk) - In Q1 2020, cash provided by financing activities was **$32.9 million**, mainly from **$43.8 million** in revolving credit facility proceeds, partially offset by **$6.8 million** in share repurchases and **$3.8 million** in dividends[70](index=70&type=chunk) [Store Plans and Capital Expenditures](index=18&type=section&id=Store%20Plans%20and%20Capital%20Expenditures) The company plans to open new stores in Myrtle Beach, SC (Q1 2021), The Villages, FL (Q3 2021), and Austin, TX (Q4 2021), while closing a store in Dallas, TX (Q3 2021). Net selling space is expected to slightly increase in 2021, with total capital expenditures estimated at $23.0 million | Location | Actual or Planned Opening Quarter | Category | | :--- | :--- | :--- | | Myrtle Beach, SC | Q-1-21 | Open-New Market | | The Villages, FL | Q-3-21 | Open | | Dallas, TX | Q-3-21 | Closure | | Austin, TX | Q-4-21 | Open | - Net selling space in 2021 is expected to be slightly up compared to 2020[71](index=71&type=chunk) - Total capital expenditures are estimated to be **$23.0 million** for the full year 2021[71](index=71&type=chunk) [Off-Balance Sheet Arrangements](index=18&type=section&id=Off-Balance%20Sheet%20Arrangements) As of March 31, 2021, Haverty Furniture Companies, Inc. reported no off-balance sheet arrangements or obligations - As of March 31, 2021, the company had no off-balance sheet arrangements or obligations[72](index=72&type=chunk) [Critical Accounting Estimates](index=18&type=section&id=Critical%20Accounting%20Estimates) The company defines critical accounting estimates as those requiring significant, subjective judgments due to inherent uncertainties. Management reviewed its estimates and found none to be critical for the periods presented in the 10-K, with no significant changes since the last annual report - Critical accounting estimates are defined as those requiring difficult, subjective, or complex judgments due to inherently uncertain matters[73](index=73&type=chunk) - Management reviewed its accounting estimates and deemed none to be critical for the periods presented in the Form 10-K[73](index=73&type=chunk) - There have been no significant changes in accounting estimates since the last annual report[73](index=73&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=18&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the company's Form 10-K for detailed quantitative and qualitative disclosures about market risk, stating that there have been no material changes to its market risk exposure since December 31, 2020 - For market risk disclosures, refer to Item 7A, 'Quantitative and Qualitative Disclosures About Market Risk,' of the company's Form 10-K[74](index=74&type=chunk) - The company's exposure to market risk has not changed materially since December 31, 2020[74](index=74&type=chunk) [Item 4. Controls and Procedures](index=18&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2021. No material changes to internal control over financial reporting were identified, although the company continues to evaluate the impact of the COVID-19 pandemic's shift to remote work on its financial reporting processes - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of **March 31, 2021**[75](index=75&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the company's internal control during Q1 2021[76](index=76&type=chunk) - The company continues to evaluate the impact of the COVID-19 pandemic's shift to a rotating work-from-home environment on its internal control over financial reporting[76](index=76&type=chunk) [PART II. OTHER INFORMATION](index=19&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers other information including legal proceedings, risk factors, and a list of exhibits filed with the Form 10-Q [Item 1. Legal Proceedings](index=19&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from the 'Business and Basis of Presentation' section in Note A of the Notes to the Condensed Consolidated Financial Statements within this Form 10-Q - Information regarding legal proceedings is described under the subheading 'Business and Basis of Presentation' in Note A of the Notes to the Condensed Consolidated Financial Statements[78](index=78&type=chunk) [Item 1A. Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the company's Form 10-K for a discussion of known material risk factors, noting that there have been no material changes to these risk factors since the filing of the 10-K - 'Item 1A. Risk Factors' in the company's Form 10-K includes a discussion of known material risk factors[79](index=79&type=chunk) - There have been no material changes from the risk factors described in the Form 10-K[79](index=79&type=chunk) [Item 6. Exhibits](index=19&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with or incorporated by reference into the Form 10-Q, including organizational documents, certifications from the CEO and CFO, and the financial statements formatted in inline XBRL - Exhibits include Articles of Amendment and Restatement of the Charter, By-laws, Certifications of CEO and CFO (pursuant to Rules 13a-14(a), 15d-14(a), and 18 U.S.C. Section 1350), and financial statements in inline XBRL[81](index=81&type=chunk) - The financial statements formatted in inline XBRL include the Condensed Consolidated Balance Sheets, Statements of Comprehensive Income, Statements of Cash Flows, and Notes to Condensed Consolidated Financial Statements[81](index=81&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission file number: 1-14445 HAVERTY FURNITURE COMPANIES, INC. (Exact name of registrant as specified in its charter) Maryland 58-0281900 (S ...