Havertys posts Q3 gains in spite of rising economic headwinds

ATLANTA — While some industry companies reported slumping in the third quarter, Top 100 retailer Havertys reported positive figures in its latest earnings report, released Nov. 1.

The Atlanta-based retailer chalked the results up to pricing discipline and its merchandise mix. Clarence Smith, chairman and CEO, noted that business is up solidly over pre-pandemic figures and that the quarter’s average ticket outpaced red hot 2021.

“Our strong earnings were the result of increased sales and gross margin improvement,” said Smith. “We made progress in delivering customer backorders as we received a near record number of containers from vendors. We had a strong Labor Day as customers returned to more traditional shopping patterns with softer traffic outside these peak periods.

“Written business compared with last year’s record pace was down 7.2% but up 15.8% compared with the pre-pandemic third quarter of 2019. Our sales associates and design consultants are providing excellent service to each customer, and this quarter’s average ticket was up 8.2% over last year.”

Net sales for the quarter, ended Sept. 30, came in at $274.5 million, up 5.4% from $260.4 in the third quarter of 2021. Total written sales were down 7.2%, and written comp-store sales declined 6.9% for the quarter.

Havertys reported net income for the quarter of $24.6 million, up 1.66% from $24.2 million in 2021’s Q3. Earnings per share rose 11.2%, reaching $1.46 vs. $1.31 a year ago.

For the nine months of 2022, Havertys reported sales of $766.7 million compared with $746.9 million through the first nine months of 2021, an increase of 2.56%.

Net income for the year so far is down slightly, at $65.6 million from $66.5 million in 2021 while earnings per share through the first nine months of the year stood at $3.83, up 7.89% from $3.55 a year ago.

Smith said economic conditions aren’t favorable as 2022 comes to a close, but he believes Havertys is in good position to continue to succeed.

“The last quarter of 2022 will be challenging as consumers face continued inflation, rising interest rates, market volatility, and geopolitical concerns,” Smith said. “We are well-positioned to service our growing customer base and will continue to use our financial strength to invest in growth initiatives to drive the business in 2023 and beyond.”

The company expects gross profit margins for 2022 will be between 57.7% to 58%. While capital expenditures are estimated at approximately $30 million in 2022. Havertys expects retail square footage will be relatively flat as it plans to open three stores and close two.

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