Haverty Furniture(US:HVT)2021-05-02 07:18Financial Data and Key Metrics Changes - In Q1 2021, delivered sales were $236.5 million, a 31.8% increase compared to the prior year quarter [20] - Total written sales for Q1 2021 were up 54.5% over the prior year period [20] - Comparable store sales increased by 11.5% over the prior year period [20] - Gross profit margin increased by 160 basis points from 55.5% to 57.1% [21] - Selling, general and administrative expenses increased by $12.2 million or 12.5% to $109.8 million, but as a percentage of sales, these costs declined to 46.4% from 54.4% [22] - Net income for Q1 2021 was $19.4 million or $1.04 per diluted share, compared to $1.8 million or $0.09 per share in the comparable quarter of last year [24] Business Line Data and Key Metrics Changes - Case goods saw the strongest sales increases, with their percentage of sales rising from 34.6% to 37.6% [35][36] - Upholstery remains a key driver, but case goods are showing significant growth [35] Market Data and Key Metrics Changes - The company reported a significant increase in customer deposits, which were $104.7 million, up $18.5 million from the previous quarter and up $78.6 million from Q1 2020 [25] - The undelivered backlog is up almost four times compared to last year, indicating strong demand [7] Company Strategy and Development Direction - The company plans to increase inventories and invest in additional warehouse capacities to manage the backlog [9] - A new multimedia marketing campaign is set to launch in May to differentiate the company from competitors [11] - The company is actively pursuing new store opportunities, with plans to open additional locations in Myrtle Beach, Central Florida, and Northeast Austin [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the sustained importance of home furnishings due to the strong housing market and government cash subsidies [8] - Supply chain challenges were acknowledged, including shipping delays and increased freight costs, but management is working to stabilize these issues [13][14] - Staffing remains a concern due to extended unemployment benefits affecting talent acquisition [17] Other Important Information - The company ended Q1 2021 with $210 million in cash and cash equivalents and no funded debt [25] - Planned capital expenditures for 2021 remain at $23 million, with significant investments in store remodels and distribution network improvements [29] Q&A Session Summary Question: Revenue impact from the winter storm - Management indicated that while there was some impact from the winter storm, the overall strong business performance may have mitigated its effect on total quarterly revenue [33] Question: Sales increases by product segment - The strongest sales increases were seen in case goods, with management noting that the availability of product contributed to this growth [35] Question: Supply chain constraints - Management highlighted that staffing issues and container capacity remain significant challenges, but they are optimistic about resolving these by the end of the year [38][39] Question: Sales modeling and future guidance - Management refrained from providing specific revenue guidance but noted that the strong backlog and customer deposits position the company well for future quarters [44][47] Question: Consumer spending trends - Management observed strong growth in key markets like Florida and Texas, with confidence in the sustainability of demand for home furnishings [48]