Haverty Furniture(US:HVT)2025-10-30 15:00Financial Data and Key Metrics Changes - The company reported Q3 2025 sales of $194.5 million, a 10.6% increase year-over-year, with comparable store sales up 7.1% [3][13] - Gross margin improved to 60.3% from 60.2% in Q3 2024, with a pre-tax profit of $6.4 million, down from $6.9 million in the prior year [4][14] - Earnings per share (EPS) decreased to $0.28 from $0.29 in Q3 2024 [15] Business Line Data and Key Metrics Changes - The design business accounted for 34.2% of sales, driven by a 7.1% increase in special order upholstery [5] - Average ticket size increased to over $4,000, with design average ticket rising to over $8,000 [4][5] - All product categories showed increases, with bedroom and bedding leading in growth at low to mid double digits [9] Market Data and Key Metrics Changes - Customer traffic remained positive, with mid single-digit growth compared to last year [5] - The company noted that customers with household incomes over $150,000 continued to spend, providing confidence for future performance [5] Company Strategy and Development Direction - The company aims to return to a billion-dollar revenue level without additional investments in distribution infrastructure [3] - Plans to open four additional stores in 2026, focusing on improving customer experience through investments in bedding departments and design centers [11] - The company is adjusting retail prices strategically to maintain values and margins in response to new tariffs [6][7] Management's Comments on Operating Environment and Future Outlook - Management highlighted ongoing challenges such as high interest rates, rising home prices, and geopolitical tensions affecting consumer confidence [5] - Despite these challenges, management expressed optimism due to strong performance in key markets and customer segments [5][12] Other Important Information - The company invested an additional $2.8 million in marketing during the quarter, including a successful direct mail campaign [10] - The company has a debt-free balance sheet and ended the quarter with $130.5 million in cash and cash equivalents [16] Q&A Session Summary Question: Can you comment on the monthly trends in Q3 and any regional differences? - Management reported July sales up 10.6%, August up 10.9%, and September up over 8%, with consistent delivery performance across regions [20][21] Question: Can you quantify the impact of tariffs on the quarter? - Management indicated they do not have a specific dollar impact but adjusted pricing to mitigate tariff effects [22][24] Question: How should expenses be viewed for next year? - Management expects normal inflationary increases in non-variable costs, with a focus on maintaining marketing levels [26][28] Question: What is the level of sales needed to leverage SG&A expenses? - Historical data suggests that sales above $800 million lead to significant operating margin expansion [35]