HAVERTY FURNITURE COMPANIES INC
For the period ended Jun 30, 2024. Filed Aug 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 6, 2024
HVT$25.14-3.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0001628280-24-021092
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001628280-24-035196
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 44 previous paragraphs and 44 current paragraphs.
24 unchanged; 16 reworded; 4 added; 2 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
Total sales for the six months ended June 30, 2024, decreased $68.4 million, or 15.9%, compared to the same period in 2023. Our comp-store sales decreased 16.2%, or $69.1 million, in the first six months of 2024 compared to the same period in 2023.
Current report
Gross profit for the second quarter of 2024 was 60.4%, down 10 basis points compared to the prior year period of 60.5%. For the second quarter of 2024, the change in the LIFO reserve generated an immaterial impact on gross profit compared to a positive impact of $3.4 million for the same period of 2023. Gross profit for the six months ended June 30, 2024 was 60.4% compared to 59.8% for the same period of 2023. Our gross margins, excluding the impact of LIFO, were up based on product selection and merchandising mix in 2024 compared to 2023.
Current report
Our SG&A costs as a percent of sales for the second quarter of 2024 were 57.7% versus 53.3% for the same period in 2023 largely as a result of decreased sales. SG&A dollars decreased $6.9 million, or 6.3%, for the second quarter of 2024 compared to the same prior year period. The change is driven by lower warehouse and delivery costs of $3.5 million primarily from reduced labor costs, lower costs in selling expense of $3.3 million, decrease of $1.6 million in administrative expenses due to lower stock compensation costs, and a decrease of $1.3 million in advertising expenses. Occupancy costs were $2.8 million higher as rent expense in the prior year quarter was reduced by $1.8 million for incentives to vacate a property before the end of its lease term.
Current report
Cash and Cash Equivalents
Removed paragraphs (2)
Previous report
Gross profit for the first quarter of 2024 was 60.3%, up 120 basis points compared to the prior year period of 59.1%. The increase is primarily due to product selection and merchandising mix.
Previous report
Cash and Cash Equivalents at End of Year
Reworded paragraphs (16)
Previous wording
The following table outlines our sales and comp-store sales increases and decreases for the periods indicated:
Current wording
The following table outlines our sales and comp-store sales increases and decreases for the periods indicated. (Amounts and percentages may not always add to totals due to rounding.)
Previous wording
Total sales for the first quarter of 2024 decreased $40.8 million, or 18.1%, compared to the same period in 2023. Our comp-store sales decreased 18.5% or $41.4 million, in the first quarter of 2024 compared to the same period in 2023.
Current wording
Total sales for the second quarter of 2024 decreased $27.7 million, or 13.4%, compared to the same period in 2023. Our comp-store sales decreased 13.6% or $27.7 million, in the second quarter of 2024 compared to the same period in 2023.
Previous wording
Our free in-home design service is being used by more customers. Designers helped drive 32.3% of our total written business for the first quarter of 2024 compared to 26.0% for the same period in 2023.
Current wording
Our free in-home design service is being used by more customers. Designers helped drive 35.8% of our total written business for the second quarter of 2024 compared to 28.6% for the same period in 2023. For the first six months of 2024, our designers' written business was 34.0% compared to 27.3% for the same period of 2023.
Previous wording
Continued inflationary pressures and economic uncertainty has had a negative effect on discretionary spending. Demand for home furnishings rose rapidly during the COVID years as consumers redecorated their homes and outfitted home offices, pulling forward sales that are now normalizing. Rising interest rates have also exacerbated the small supply of homes available for sale and further weakened the housing market, which has a negative impact on demand for furniture. Written business for the first quarter of 2024 compared to the first quarter of 2023 was down 12.6% and written comp-store sales were down 13.0%.
Current wording
Demand for home furnishings rose rapidly during the COVID years as consumers redecorated their homes and outfitted home offices, pulling forward sales. Furthermore, recent inflationary pressures and economic uncertainty have had negative effects on consumer discretionary spending. Rising interest rates have also exacerbated the small supply of homes available for sale and further weakened the housing market. All of which has had a negative impact on demand for furniture and has adversely impacted our sales volumes in the first and second quarters of 2024. Written business for the second quarter of 2024 compared to the second quarter of 2023 was down 15.2% and written comp-store sales were down 15.8%.
Previous wording
We expect annual gross profit margins for 2024 will be 60.0% to 60.5%. This is a 50 basis points increase from our previous estimate based on our current merchandise mix and anticipated changes in product and freight costs and their impact on our LIFO reserve. Gross profit margins fluctuate quarter to quarter in relation to our promotional cadence.
Current wording
We expect annual gross profit margins for 2024 will be 60.0% to 60.5%. Gross profit margins fluctuate quarter to quarter in relation to our promotional cadence.
Previous wording
Our SG&A costs as a percent of sales for the first quarter of 2024 were 59.4% versus 52.7% for the same period in 2023 largely as a result of decreased sales. SG&A dollars decreased $9.0 million, or 7.6%, for the first quarter of 2024 compared to the same prior year period. The change is driven by lower costs in selling expense of $4.8 million, warehouse and delivery costs of $3.2 million, and advertising costs of $0.6 million.
Current wording
Our SG&A costs as a percent of sales for the first six months of 2024 were 58.6% versus 53.0% for the same period in 2023 largely as a result of decreased sales. SG&A dollars decreased $15.9 million, or 7.0%, for the first half of 2024 compared to the same prior year period. The change results primarily from lower costs in selling expense of $8.0 million, a decrease in warehouse and delivery costs of $6.8 million, and an increase in occupancy costs of $2.7 million.
Previous wording
The variable expenses in dollars were lower in the first quarter of 2024 compared to the same period in 2023, primarily due to the decrease in commission expense and third-party credit costs.
Current wording
The variable expenses in dollars were lower in the second quarter and for the first six months of 2024 compared to the same periods in 2023, primarily due to the decrease in commission expense and third-party credit costs.
Previous wording
Fixed and discretionary expenses were impacted in the first quarter of 2024 primarily by decreases in advertising expenses, warehouse costs, and administrative expenses compared to the prior year quarter.
Current wording
Fixed and discretionary expenses were impacted in the second quarter and first half of 2024 primarily by decreases in advertising expenses, warehouse costs, and administrative expenses and in the second quarter by an increase in occupancy costs compared to the prior year comparable periods.
Previous wording
Our variable expenses within SG&A for the full year of 2024 are anticipated to be 19.9% to 20.2%. Fixed and discretionary expenses are expected to be to approximately $290.0 to $292.0 million for the full year of 2024, a decrease of $5.0 million from our previous guidance based on changes in our marketing spend and other costs.
Current wording
Our variable expenses within SG&A for the full year of 2024 are anticipated to be 19.7% to 20.0%, a 20 basis point decrease primarily due to lower delivery and third-party credit costs. Fixed and discretionary expenses are expected to be to approximately $282.0 to $284.0 million for the full year of 2024, a decrease of $8.0 million from our previous guidance based on reductions in advertising, incentive compensation, and professional fees.
Previous wording
At March 31, 2024, we had $111.8 million in cash and cash equivalents, and $6.0 million in restricted cash equivalents. We believe that our current cash position, cash flow generated from operations, funds available from our credit agreement, and access to the long-term debt capital markets should be sufficient for our
Current wording
At June 30, 2024, we had $109.9 million in cash and cash equivalents, and $6.1 million in restricted cash equivalents. We believe that our current cash position, cash flow generated from operations, funds available from our credit agreement, and access to the long-term debt capital markets should be sufficient for our operating requirements and to enable us to fund our capital expenditures, dividend payments, and lease obligations through the next several years. In addition, we believe we have the ability to obtain alternative sources of financing, if needed.
Previous wording
In October 2022, we entered into the Fourth Amendment to our Amended and Restated Credit Agreement (as amended, the “Credit Agreement”) with Truist Bank. The Credit Agreement, which matures October 24, 2027, provides for a $80.0 million revolving credit facility. The borrowing base at March 31, 2024 was $121.1 million and the net availability was $80.0 million.
Current wording
In October 2022, we entered into the Fourth Amendment to our Amended and Restated Credit Agreement (as amended, the “Credit Agreement”) with Truist Bank. The Credit Agreement, which matures October 24, 2027, provides for a $80.0 million revolving credit facility. The borrowing base at June 30, 2024 was $117.5 million and the net availability was $80.0 million.
Previous wording
Net cash provided by operating activities was $3.1 million in the first three months of 2024 compared to $11.1 million during the same period in 2023. This difference resulted primarily from changes in working capital and a decrease in net income. Working capital was impacted by more normalized levels of inventories and customer deposits in 2024, as compared against the reduction of the backlog in 2023 and an increase in other liabilities.
Current wording
Net cash provided by operating activities was $17.5 million in the first six months of 2024 compared to $40.1 million during the same period in 2023. This difference resulted primarily from a decrease in net income and changes in working capital. Working capital was impacted by more normalized levels of inventories and customer deposits in 2024, as compared against the reduction of the backlog in 2023 and an increase in other liabilities.
Previous wording
Investing Activities. Cash used in investing activities decreased by$0.3 million in the first three months of 2024 compared to the first three months of 2023, due to capital expenditure spend.
Current wording
Investing Activities. Cash used in investing activities decreased by$24.6 million in the first six months of 2024 compared to the first six months of 2023, due to capital expenditure spend.
Previous wording
Financing Activities. Cash used in financing activities decreased by$0.6 million in the first three months of 2024 compared to the first three months of 2023, due to lower shares withheld for taxes in 2024 compared to 2023.
Current wording
Financing Activities. Cash used in financing activities for the payment of dividends and taxes on vested shares was comparable in the first six months of 2024 compared to the first six months of 2023.
Previous wording
Total capital expenditures for the full year of 2024 are estimated to be $32.0 million depending on the timing of spending for our capital projects.
Current wording
Total capital expenditures for the full year of 2024 are estimated to be $33.0 million depending on the timing of spending for our capital projects.
Previous wording
Critical accounting estimates are those that we believe are both significant and that require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates,
Current wording
Critical accounting estimates are those that we believe are both significant and that require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates, and we might obtain different estimates if we used different assumptions or conditions. We reviewed our accounting estimates, and none were deemed to be considered critical for the accounting periods presented in our Form 10-K. We had no significant changes in those accounting estimates since our last annual report.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
operating requirements and to enable us to fund our capital expenditures, dividend payments, and lease obligations through the next several years. In addition, we believe we have the ability to obtain alternative sources of financing, if needed.
Previous report — wording carried elsewhere
and we might obtain different estimates if we used different assumptions or conditions. We reviewed our accounting estimates, and none were deemed to be considered critical for the accounting periods presented in our Form 10-K. We had no significant changes in those accounting estimates since our last annual report.