Haverty Furniture(HVT)2025-02-25 16:00Financial Data and Key Metrics Changes - Fourth quarter sales were 722.9 million, with comparable sales down 16.7% [5] - Gross margins remained strong at 61.9% for the quarter and 60.7% for the year, despite a decrease of 50 basis points from the previous year [5][21] - Pre-tax profit for the quarter was 26.2 million with a 3.6% operating margin [6][21] - Net income for Q4 was 0.49 per diluted share, compared to 0.90 per share in the same quarter last year [24] Business Line Data and Key Metrics Changes - The design business accounted for approximately 32% of total business, with an average ticket of over 3,400 [8] Company Strategy and Development Direction - The company plans to roll out a new point of purchase and tagging program over the next two to three years to enhance customer experience [10] - Six new stores were opened in 2024, with plans for additional openings in Houston and other markets [12][13] - The supply chain team managed inventories effectively, reducing them by over 11% for the year, with expectations to increase inventories by 5% to 10% in the coming quarters [14][15] Management Comments on Operating Environment and Future Outlook - Management expressed concerns about the housing market due to rising mortgage rates, which could affect affordability [6][48] - The company anticipates a challenging demand environment in 2025, but hopes for improvements in the latter part of the year [51] - Management is committed to driving volume and maintaining stable margins despite potential tariff impacts [40][41] Other Important Information - The company ended the year with zero funded debt and over 32.1 million, with plans for $27.1 million in 2025 [25][28] Q&A Session Summary Question: Can you provide details on monthly trends for written or delivered sales? - Delivered sales were down in the low teens for October, November, and December, averaging 12.5% for the quarter, while written sales showed improvement towards the end of the quarter [32][33] Question: Has any positive momentum carried into the first quarter? - Management refrained from commenting on Q1 performance [35] Question: Were there regional differences in performance during Q4? - Florida and the central part of the country showed a bounce back, while the west and east were slightly weaker [37] Question: Can you elaborate on gross margin guidance and tariff impacts? - Management plans to mitigate tariff impacts through vendor relations and pricing adjustments, expecting stable margins in 2025 [39][40] Question: What is the demand environment expected in 2025? - Management anticipates a tough environment due to housing struggles and rising mortgage rates, but hopes for improvements later in the year [48][51] Question: What are the challenges in converting traffic to orders? - Conversion remains a key opportunity, with management testing strategies to improve this metric [52][53] Question: What is driving the increase in fixed SG&A guidance? - The increase is attributed to general inflation and occupancy costs related to new store openings [55]