Haverty Furniture Companies, Inc. (HVT) Reports Quarterly Results for the Three Months Ended March 31, 2025
For the quarter ended March 31, 2025, Haverty Furniture Companies, Inc. reported net sales of $243.1 million, a 4.5% increase from the same period last year. The company’s gross profit margin was 34.1%, compared to 33.5% in the same period last year. Net income was $14.3 million, or $0.96 per diluted share, compared to $12.1 million, or $0.83 per diluted share, in the same period last year. The company’s cash and cash equivalents increased to $143.1 million, and its total debt decreased to $143.1 million. The company’s inventory turnover was 2.5 times, and its accounts receivable turnover was 2.3 times. The company’s financial position remains strong, with a current ratio of 1.4 and a debt-to-equity ratio of 0.5.
Financial Performance Overview
The company’s financial performance in the first quarter of 2025 showed a decline compared to the same period in 2024. Key highlights:
Net sales decreased by 1.3% to $181.6 million, with comparable-store sales down 4.8%. This was attributed to a weak housing market, inflationary pressures, and cautious consumer spending.
Gross profit margin improved by 90 basis points to 61.2%, primarily due to better product selection and merchandising mix.
Selling, general and administrative (SG&A) expenses as a percentage of net sales decreased slightly to 59.0% from 59.4%, driven by lower variable costs like selling and delivery expenses, partially offset by higher fixed costs like occupancy and administrative expenses.
Cash flow from operations increased to $6.2 million from $3.1 million in the prior year period, mainly due to changes in working capital.
Capital expenditures decreased, leading to a $0.2 million reduction in cash used for investing activities.
Financing activities used $1.4 million more cash compared to the prior year, primarily due to $2.0 million in common stock repurchases.
Revenue and Profit Trends
The company’s net sales and comparable-store sales declined in the first quarter of 2025 compared to the same period in 2024. This was attributed to a challenging macroeconomic environment, including a weak housing market, inflationary pressures, and cautious consumer spending.
However, the company was able to improve its gross profit margin by 90 basis points, indicating better product selection and merchandising mix. SG&A expenses as a percentage of net sales also decreased slightly, though the company faced higher fixed costs in areas like occupancy and administration.
Strengths and Weaknesses
Strengths:
- Improved gross profit margin through better product and merchandising strategies
- Ability to manage variable costs and maintain SG&A discipline
Weaknesses:
- Declining net sales and comparable-store sales due to macroeconomic headwinds
- Increasing fixed costs, particularly in occupancy and administration
Outlook
The company’s outlook remains cautious given the continued challenges in the macroeconomic environment, including the weak housing market and inflationary pressures. However, the company’s focus on managing costs and improving its product and merchandising mix could help mitigate the impact on profitability.
The company’s strong cash position, access to credit facilities, and ability to generate cash from operations suggest it has the financial flexibility to weather the current conditions. Ongoing monitoring of the economic situation and proactive adjustments to the business strategy will be crucial for the company’s future performance.
