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