Haverty Furniture Companies Inc.

05/06/2026 | Press release | Distributed by Public on 05/06/2026 09:45

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes contained herein and with the audited consolidated financial statements, accompanying notes, related information and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025 ("Form 10-K").
Forward-Looking Statements and Risk Factors
Statements in this Quarterly Report on Form 10-Q (the "Form 10-Q") and the schedules hereto that are not purely historical facts or that necessarily depend on future events, including statements about our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by the use of forward-looking terminology including "anticipate," "believe," "estimate," "expect," "intend," "plan," "project," "target," "can," "could," "may," "should," "will," "would," or similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. In addition, oral statements made by our directors, officers, and employees to the investor and analyst communities, media representatives and others, depending upon their nature, may also constitute forward-looking statements.
All forward-looking statements are based upon currently available information and the Company's current assumptions, expectations, and projections about future events. Past performance is not a guarantee of future results or returns and no representation or warranty is made regarding future performance. Forward-looking statements are by nature inherently uncertain and involve known and unknown risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. These risks and uncertainties include, but are not limited to:
•competition from national, regional and local retailers of home furnishings;
•our ability to anticipate changes in consumer preferences;
•our ability to maintain and enhance our brand;
•our ability to successfully implement our growth and other strategies;
•our ability to locate our stores in suitable locations to attract customers;
•importing a substantial portion of our merchandise from foreign sources (including the impact of tariffs);
•our dependence on third-party producers to meet our requirements;
•significant fluctuations and volatility in the cost of raw materials and components;
•risks in our supply chain, including price, availability and quality of raw materials and components utilized in the products we sell and our ability to forecast our supply chain needs;
•a failure by our vendors to meet our quality control standards or comply with changes to the legislative or regulatory framework regarding product safety;
•our reliance on third-party transportation vendors for product shipments from our suppliers;
•damage to one of our distribution centers;
•our reliance on information technology and any disruptions in our IT systems;
•the vulnerability of our information technology infrastructure to cyber-attacks, breaches and other disruptions;
•the effects of labor disruptions or labor shortages; and our ability to attract and retain key employees;
•the rise of oil and gasoline prices;
•increased transportation costs;
•changes in economic conditions such as consumer disposable income, fuel prices, inflation rates, recession and fears of recession, unemployment rates, interest rates, tax rates, consumer confidence, and changing government policies, laws and regulations;
•certain risks may not be fully covered by insurance;
•failure to protect our intellectual property;
•our ability to comply with all applicable laws and regulations;
•pending or unforeseen litigation;
•natural disasters, public health events, geopolitical instability or other disruptive events; and
•other risks and uncertainties as may be detailed from time to time in our public announcements and Securities and Exchange Commission filings.
Further information on the risks and uncertainties that could cause our actual results to differ from these forward-looking statements are described in "Item 1A. Risk Factors" of our Form 10-K for 2025 and in the subsequent reports we file with the Securities and Exchange Commission. Consequently, all forward-looking statements in this report are qualified by the factors, risks and uncertainties contained therein. All forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report except as required by law. We intend for any forward-looking statements to be covered by, and we claim the protection under, the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Industry Overview
The retail residential furniture industry is influenced by the overall strength of the economy, new and existing home sales, consumer confidence, spending on large ticket items, interest rates, and the availability of credit. The industry continues to face headwinds from rising consumer debt, constrained housing inventory, tight access to home mortgage credit, and ongoing economic uncertainty driven by changes in tariff policy and geopolitical tensions, including rising oil and raw material prices.
Throughout 2025, the U.S. presidential administration announced new and modified tariffs on imported goods, including those sourced from China, Vietnam, and other key manufacturing regions. In response, several affected countries implemented retaliatory tariffs, adding economic uncertainty and increased cost pressures across the industry. On February 20, 2026, certain tariffs were invalidated following a ruling by the U.S. Supreme Court, adding further uncertainty to the trade environment. On April 20, 2026, U.S. Customs and Border Protection ("CBP") launched the Centralized Automated Processing of Entries ("CAPE") system, a new system CBP is using to process refund claims for IEEPA tariffs on imported goods. The Company has submitted refund claims through CAPE with respect to products on which it paid IEEPA tariffs. We continue to actively monitor tariff developments and assess their potential impact on our business.
Business Overview
Havertys is a leading specialty retailer of residential furniture and accessories, founded in 1885 in Atlanta, Georgia. As of March 31, 2026, we operated 128 stores in 17 states throughout the Southern and Midwestern regions of the U.S. Our products are selected to appeal to a middle to upper-middle income consumer across a variety of styles. We have a seasoned, commission-based sales team, and offer free design services to customers seeking a more in-depth personalized experience. Unlike many competitors, we do not outsource delivery; instead, our Havertys delivery team ensures a seamless and professional delivery experience, which includes a detailed inspection of the product prior to delivery, as well as placement and assembly of the furniture in the customer's home. We are recognized in our markets for offering high-quality, fashionable products and delivering exception customer service.
Net Sales
Our sales are generated by customer purchases of merchandise and related fees, net of expected returns and sales tax. We record our sales when merchandise is delivered to the customer. Comparable-store or "comp-store" sales is a measure which indicates the performance of our existing stores and website by comparing the growth in sales in store and online for a particular month over the corresponding month in the prior year. Stores are considered non-comparable if they were not open during the corresponding month in the prior year or if the selling square footage has been changed significantly. The method we use to compute comp-store sales may not be the same method used by other retailers.
We also track "written sales" and "written comp-store sales," which represent customer orders prior to delivery. As a retailer, comp-store sales and written comp-store sales are an indicator of relative customer spending and store performance. Comp-store sales, total written sales and written comp-store sales are intended only as supplemental information and none are substitutes for net sales presented in accordance with U.S. GAAP.
The following table outlines the changes in our sales and comp-store sales for the periods indicated.
2026 2025
Net Sales Comp-Store Sales Net Sales Comp-Store Sales
Period Total
Dollars 		%
Change 		$
Change 		%
Change 		$
Change 		Total
Dollars 		%
Change 		$
Change 		%
Change 		$
Change
Q1 $ 189.1 4.1 % $ 7.5 4.3 % $ 7.7 $ 181.6 (1.3) % $ (2.4) (4.8) % $ (8.8)
Net sales for the first quarter of 2026 increased $7.7 million, or 4.1%, compared to the same period in 2025. This growth was achieved despite continued pressure from a soft housing market which creates a challenging demand environment for the home furnishings industry. Our comp-store sales increased $7.7 million, or 4.3%, in the first quarter of 2026 compared to the same period in 2025. Written business for the first quarter of 2026 was up 6.4% compared to the first quarter of 2025, and comp-store written business was up 7.0%.
Our free in-home design service continues to provide strong customer engagement. Design consultants helped drive 35.3% of our total written sales for the first quarter of 2026, compared to 33.2% of total written sales for the same period in 2025, with a higher average written ticket of $8,312, compared to $7,439 for the same period in 2025.
Gross Profit
Gross profit margin for the first quarter of 2026 was 61.5%, up 30 basis points compared to the prior year period of 61.2%. The increase is primarily due to product selection, merchandise pricing and mix.
Substantially all of our occupancy and home delivery costs are included in selling, general and administrative expenses ("SG&A"), as are a portion of our warehousing expenses. Accordingly, our gross profit may not be comparable to those entities that include these costs in cost of goods sold.
Selling, General and Administrative Expenses
Our SG&A expenses as a percentage of sales for the first quarter of 2026 were 58.9% compared to 59.0% for the same period in 2025. SG&A expenses increased $4.1 million, or 3.8%, primarily due to higher selling, administrative, and occupancy costs. Selling expenses increased $2.4 million primarily due to third-party credit costs, sales commission and related benefit costs, consistent with the increase in net sales. Administrative expenses increased $0.8 million, driven by higher salaries and related benefits. Occupancy costs increased $0.6 million, largely due to costs associated with new store openings and the timing of repairs and maintenance.
We classify our SG&A expenses as either variable or fixed and discretionary. Our variable expenses include the costs in the selling and delivery categories and certain warehouse and distribution expenses, as these amounts will generally move in tandem with our level of sales. The remaining categories and expenses for occupancy, advertising, and administrative costs are classified as fixed and discretionary because these costs do not fluctuate with sales.
The following table outlines our SG&A expenses by classification:
(In thousands) Three Months Ended March 31,
2026 2025
$ % of
Net Sales 		$ % of
Net Sales
Variable $ 36,279 19.2 % $ 33,647 18.5 %
Fixed and discretionary 74,998 39.7 % 73,555 40.5 %
$ 111,277 58.9 % $ 107,202 59.0 %
The variable expenses in dollars were higher in the first quarter of 2026 compared to the same period in 2025, primarily driven by higher commission expense resulting from increased sales. Fixed and discretionary expenses increased in the first quarter of 2026 due to increases in occupancy costs, advertising, and administrative expenses compared to the prior year comparable period.
Liquidity and Capital Resources
Cash and Cash Equivalents
At March 31, 2026, we had $107.5 million in cash and cash equivalents, and $6.6 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 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.
Long-Term Debt
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, 2026 was $126.7 million and the net availability was $80.0 million.
Leases
We lease a portion of our real estate, including our stores, distribution centers, and store support space, pursuant to operating leases.
Cash Flows Summary
Operating Activities. Cash flow generated from operations provides us with a significant source of liquidity. Our operating cash flows result primarily from cash received from our customers, offset by cash payments we make for products and services, employee compensation, operations, and occupancy costs.
Cash provided by or used in operating activities is also subject to changes in working capital. Working capital at any specific point in time is subject to many variables, including seasonality, inventory selection, the timing of cash receipts and payments, and vendor payment terms.
Net cash used in operating activities was $2.9 million in the first three months of 2026, compared to $6.2 million provided by operating activities during the same period in 2025. This difference resulted primarily from changes in working capital. Working capital was primarily impacted by a higher inventory increase in 2026 compared to 2025, changes in other assets and liabilities, and the timing of vendor payments and cash receipts.
Investing Activities. Cash used in investing activities increased by $0.8 million in the first three months of 2026 compared to the first three months of 2025, due to higher capital expenditures.
Financing Activities. Cash used in financing activities in the first three months of 2026 were comparable to the first three months of 2025.
Store Plans
Location or Market Opening Quarter
Actual or Planned 		Category
Alexandria, LA Q-1-26 Closure
St. Louis, MO Q-2-26 Open
Nashville, TN Q-2-26 Open
San Angelo, TX Q-2-26 Closure
Fredericksburg, VA Q-3-26 Open
College Station, TX Q-3-26 Closure
Dallas, TX Q-4-26 Open
Houston, TX Q-4-26 Open
Pittsburgh, PA Q-4-26 Open
Atlanta, GA Q-4-26 Relocation
Houston, TX Q-1-27 Open
In April 2026, we opened our 129th store in the St. Louis, MO market.
Critical Accounting Estimates
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.
Haverty Furniture Companies Inc. published this content on May 06, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 06, 2026 at 15:45 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]