Haverty Furniture(US:HVT)2022-02-16 18:56Financial Data and Key Metrics Changes - The company reported record fourth quarter and full year performance, achieving $1 billion in net sales for the first time, with earnings per share of $4.90 compared to $3.12 the previous year [5] - In Q4 2021, net sales were $265.9 million, a 10.2% increase year-over-year, while comparable store sales rose by 9.2% [26] - Gross profit margin decreased by 60 basis points from 57% to 56.4% due to increased freight and product costs [26] - Net income for Q4 2021 was $24.3 million or $1.35 per diluted share, compared to $25.4 million or $1.37 per share in the same quarter last year [29] Business Line Data and Key Metrics Changes - The company is focusing on enhancing its e-commerce business, with pure Internet sales transactions currently in the mid-single digits percentage of sales, aiming to reach the 10% range post-relaunch [14] - The company plans to triple its third-party curated collections this year, indicating a strong focus on expanding product offerings [15] Market Data and Key Metrics Changes - The company is positioned in 9 out of the top 10 hottest housing markets in the U.S., with plans to open stores in key regions such as Northern Virginia, Austin, and Indianapolis [9] - The company added capacity to its main distribution center, allowing for 20% more storage, and is investing in regional facilities to support growth in the Mid-Atlantic and Mid-American regions [11] Company Strategy and Development Direction - The company plans to open 5 new stores per year for the next three years starting in 2023, focusing on its distribution footprint [10][44] - Capital expenditures for 2022 are expected to be approximately $37 million, with key investments in stores, distribution, and IT enhancements [13][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of demand, noting a healthy backlog and no significant order cancellations [39][42] - The company anticipates a return to normalized receiving levels by February and March 2022, following supply chain disruptions [19] - Management expects gross profit margins for 2022 to be between 56.7% and 57%, with improvements anticipated over the course of the year [34] Other Important Information - The company has no funded debt on its balance sheet and ended Q4 2021 with $166.1 million in cash and cash equivalents [31] - The company purchased $22.3 million of common shares in Q4 2021, totaling $41.8 million for the year, representing approximately 8% of its current market capitalization [32] Q&A Session Summary Question: Sustainability of demand versus pre-pandemic levels and notable order cancellations - Management has not seen notable cancellations and reports a healthy backlog, which is up over last year [39][42] Question: Store growth and geographic footprint - New store openings will primarily be within the current distribution footprint, with potential expansion into other states [44] Question: Demand trends throughout the quarter - Written trends were soft in October and November but showed positive trends in December [49] Question: Promotions and competitive environment - The company has not changed its promotion cadence and continues to focus on digital marketing efforts [52] Question: Expectations for freight and product costs - Management noted some leveling out of container rates but still expects elevated costs to impact margins [53]