by However, the retailer remains profitable, with an increase in gross profit margins that rose to 60.8% compared to 57.1% last year
ATLANTA — Havertys Furniture reported a 19.7% drop in consolidated revenues and a 20.7% drop in comparable store sales during its third quarter ended Sept. 30.
Total consolidated revenues were $220.3 million, compared with $274.5 million for the same period last year. Total written sales were down 11.5% during the quarter and comp-store written sales were down 12.6%.
Meanwhile, the retailer’s gross profit margins rose to 60.8% from 57.1% the same period in 2022. Net income was $17.2 million, or $1.02 per share, compared to $24.6 million, or $1.46 per share, the same period last year.
“Our third-quarter results reflect a retrenching consumer and the agility of our teams to pivot operationally in a changing sales environment,” said Havertys Chairman and CEO Clarence Smith. “These efficiencies and the continued focus on serving the customer helped drive the quarter’s performance.”
The company also noted that its SG&A expenses decreased $11.8 million during the quarter and were 51.1% of sales compared to 45.4% during last year’s third quarter.
It said the primary drivers of the dollar volume decrease were a $4.8 million drop in selling expenses due to lower commission-based compensation expense and related payroll taxes and benefits; and a $3.2 million decrease in warehouse and delivery costs primarily from reduced headcount through attrition, less usage of temporary labor and lower expenses for fuel and demurrage fees.
In addition, it reported a $2.1 million drop in advertising expenses which it said was driven by reduced spending on television and interactive marketing partly offset by higher technology costs; and a $1.6 million decrease in administrative costs driven by lower compensation and group insurance costs partially offset by increased relocation expenses.
Other highlights of the report were as follows:
+ The company reported cash and cash equivalents of $141.4 million.
+ It generated $79.4 million in cash from operating activities mainly from solid earnings performance and changes in working capital including a $16 million reduction in inventories and an increase in other assets and liabilities of $10.5 million.
+ During the quarter it invested $46.4 million in capital expenditures, which included $28.2 million for the purchase of its Florida distribution center from its landlord in May.
+ It also purchased 104,221 shares of common stock for $3.2 million and paid $14.3 million in quarterly cash dividends.
+ It also reported no debt outstanding as of Sept. 30 and had credit availability of $80 million.
Year to date for the first nine months of the year, the company reported $651.4 million in sales compared to $766.7 million the same period in 2022, a 15% decline. Gross profit for the nine-month period was $391.7 million, or 60.1% of sales, compared to $444.3 million, or 58% of sales for the same period last year.
Its net income during the nine-month period was $41.3 million, or $2.46 per share, compared to $65.6 million, or $3.83 per share, the same period last year.
Looking forward, Smith said, “As we move into the fourth quarter, we are focused on maintaining our gross margins, growing our average ticket, and expanding our store base within our distribution footprint. Our merchants have developed a winning assortment for our sales teams and in-home designers to offer our customers. In October, we opened an additional location in the Charlotte, North Carolina, market and entered the Dayton, Ohio, market. The conversion of the four Bed Bath & Beyond locations in the Memphis, Tennessee, market and in the Florida markets of Destin, St. Petersburg, and metro Miami are underway, and we are evaluating other store opportunities for growth in the coming year.”
He added that while the macro-environment remains challenging, and that while the company is cautious in its near-term expectations, “Our strong financial, geographic and brand positions support our long-term strategy of delivering profitable growth in the years ahead.”
