Havertys Q3 profit triples

ATLANTA — Havertys’ third-quarter net income jumped to $18.3 million, or 97 cents per share, as the furniture retailer’s written business continued at a record pace since stores reopened in May.

That net income for the period ended Sept. 30 was triple the $6.1 million, or 30 cents per share, for the same period a year ago.

As previously reported, third-quarter net sales increased 3.9% to $217.5 million, and comparable-store sales were up 4%. In a sign demand continues to outstrip available supply, written sales for the quarter were up 22.8%, and written comparable-store sales rose 22.6%.

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Gross profit margins increased to 56.2% and selling, general and administrative expenses decreased $4.1 million, or to 46% of sales, as the retailer reduced advertising expenses, travel and salaries, wages and payroll taxes (the result of a second-quarter workforce reduction. The decreases were offset in part by increases in commissions and incentive compensation.

“The surge in demand for home furnishings and the impact of coronavirus on production, when coupled with shipping complications, has generated supply chain challenges,” said Clarence Smith, Havertys chairman, president and CEO.

“We believe our vendor relationships and system capabilities are a competitive advantage in accelerating receipt of product and setting delivery dates with customers. Increasing our staffing to appropriately serve our customer is a key near-term focus and we continue to enhance our online shopping and buying experience.”

Smith said the impact of COVID on the furniture industry and others aligned with the home “is in stark contrast with those connected to travel and entertainment,” and, “We cannot predict the duration of this dynamic business shift or its long-term impact on our industry, but we are confident in our seasoned teams and have the resources to capitalize on the changing retail landscape.”

For the first nine months, Havertys’ net income more than doubled to $33.7 million, or $1.77 cents per share, from $15.8 million, or 77 cents per share, for the same period a year ago. Net sales decreased 13.9% to $506.9 million.

The company said it expects gross profit margins for the fourth quarter to be comparable as a percentage of sales to the third-quarter level based on estimates of product and freight costs, among other things. It’s estimate for SG&A expenses for the fourth quarter is in the $67 million to $69 million range, down from the actual $69.6 million in the year-ago fourth quarter.

Havertys expects to open a new market store in Myrtle Beach, S.C., in early March 2021. It currently operates 120 showrooms in 16 Southern and Midwestern states.

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