Haverty Furniture(US:HVT)2020-11-01 15:06Financial Data and Key Metrics Changes - Delivered comparable store sales increased by 4% with written comparable sales up 22.6%, marking the largest increase in at least 50 years [4] - Record quarterly net profit of $18.3 million, with earnings per share of $0.97 compared to $6.1 million and $0.31 per share last year [5][16] - Gross profit margin improved by 270 basis points from 53.5% to 56.2% due to better merchandising mix and fewer markdowns [13][5] - Selling, general, and administrative expenses decreased by $4.1 million or 3.9% to $100.1 million, falling to 46% of sales from 49.8% [14] Business Line Data and Key Metrics Changes - Internet sales represented 3.9% of total sales, up over 80% [6] - Buy Online Pickup in Store increased to 15%, tripling over the past three years [6] - The company experienced a "triple double" in several periods, indicating double-digit increases in traffic, closing rate, and average ticket [7] Market Data and Key Metrics Changes - Strong performance noted in larger markets, contributing to balanced growth across regions [7] - Customer deposits reached $88.4 million, up $58.3 million from the year-end balance, indicating strong demand [17] Company Strategy and Development Direction - The company aims to maintain high single-digit pretax operating income in upcoming quarters [6] - Investments are being made to improve website efficiency and increase digital marketing efforts [6] - The company is focused on adapting to industry changes and believes it is well-positioned compared to competitors [9] Management's Comments on Operating Environment and Future Outlook - Management noted the importance of convenience for customers during the pandemic and is committed to holding costs in most SG&A categories [5][6] - The backlog of orders is expected to carry into 2021, with significant product on the way [33] - Management is optimistic about maintaining gross margins and is focused on special orders and custom products [38] Other Important Information - Capital expenditures for 2020 have been increased to $11.4 million, focusing on repairs, maintenance, and IT upgrades [22] - The company opened one new location in the Dallas-Fort Worth area during Q3 2020 [23] Q&A Session Summary Question: Insights on trends through the quarter and 4Q outlook - Management indicated that written sales for Q4 are expected to be in a similar range as Q3, with ongoing investments in distribution capacity [29] Question: Customer deposit levels and delivery timelines - Management expects the backlog to extend into 2021, with a significant amount of product on the way, but aims to fulfill important deliveries before the holidays [33] Question: Considerations for 2021 models regarding gross margins and SG&A costs - Management acknowledged the need to assess gross profit margins in a non-promotional environment and indicated that SG&A costs may see slight increases as personnel is added back [35][36]