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HAVERTY FURNITURE COMPANIES INC (HVT) Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue of $181.6M grew sequentially modestly weaker versus Q4 but exceeded Wall Street consensus; diluted EPS of $0.23 beat consensus, with gross margin up 90 bps YoY to 61.2% on mix and product selection . EPS consensus was $0.14* and revenue consensus was $177.8M*; HVT delivered an EPS beat of $0.09 and a revenue beat of ~$3.8M*.
  • Comparable-store sales declined 4.8% and written comps fell 6.3%, reflecting weak housing turnover, winter storm disruptions and softer President’s Day event; however March trends improved to flat written sales, and average ticket rose ~4% to $3,314 .
  • 2025 guidance largely maintained: gross margin 60.0–60.5% unchanged; fixed/discretionary SG&A $291–$293M unchanged; variable SG&A lowered to 18.6–19.0%; CapEx cut to ~$24M (from ~$27.1M) amid tariff uncertainty .
  • Management emphasized tariff planning and supply-chain repositioning (halted most direct China shipments; shifting production to Vietnam/Cambodia/Mexico), inventory build to delay tariff impact, and selective pricing actions; liquidity remains strong with $118.3M cash and no debt .

Values retrieved from S&P Global for estimates.

What Went Well and What Went Wrong

What Went Well

  • Margin and EPS outperformed: gross margin rose to 61.2% (vs. 60.3% LY) and diluted EPS improved to $0.23 (vs. $0.14 LY) on merchandise mix and expense control . Management: “Gross margins remained strong for the quarter, coming in at 61.2%… pretax profits… $5.3M” .
  • Average ticket and design sales mix improved: average ticket up ~4% to $3,314; designer average ticket >$7,400 (+9%); design consultants accounted for 33.2% of written business (vs. 32.4% LY) .
  • Proactive supply chain and pricing: halted most direct China shipments (145% tariff risk), shifting to Vietnam/Cambodia/Mexico; minimal consumer price impacts expected due to supplier support and targeted pricing actions .

What Went Wrong

  • Demand headwinds: comps -4.8% and written comps -6.3%; President’s Day sales down ~10% over two weeks; weather impacted multiple markets; categories weakness in dining/occasional .
  • Sequential softness vs Q4: revenue $181.6M (vs. $184.4M Q4), gross margin 61.2% (vs. 61.9% Q4), EPS $0.23 (vs. $0.49 Q4), reflecting seasonality and promotional cadence .
  • Tariff uncertainty complicates planning: 90-day reprieve adds near-term relief but creates mid-year visibility risk; management reduced 2025 CapEx by ~$3M to maintain flexibility .

Financial Results

MetricQ3 2024Q4 2024Q1 2025 ActualQ1 2025 Consensus*
Revenue ($USD Millions)$175.9 $184.4 $181.6 $177.8*
Gross Profit ($USD Millions)$105.9 $114.2 $111.1 N/A
Gross Margin (%)60.2% 61.9% 61.2% N/A
SG&A ($USD Millions)$100.9 $105.8 $107.2 N/A
SG&A as % of Sales (%)57.4% 57.4% 59.0% N/A
Pre-tax Income ($USD Millions)$6.9 $9.6 $5.3 N/A
Net Income ($USD Millions)$4.9 $8.2 $3.8 N/A
Diluted EPS ($)$0.29 $0.49 $0.23 $0.14*

Values retrieved from S&P Global for estimates.

KPIs

KPIQ3 2024Q4 2024Q1 2025
Comp-Store Sales (%)-20.5% -13.7% -4.8%
Total Written Business (%)-15.3% -6.7% -2.6%
Design Consultants Share of Written Business (%)34.5% 31.8% 33.2%
Average Ticket ($)$3,365 $3,371 $3,314
Sales per Sq Ft ($)$164 $164 $162
Cash, Cash & Restricted Cash ($USD Millions)$127.4 $126.3 $118.3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Gross Profit Margin (%)FY 202560.0–60.5% 60.0–60.5% Maintained
Variable SG&A (% of Sales)FY 202519.0–19.3% 18.6–19.0% Lowered
Fixed/Discretionary SG&A ($USD Millions)FY 2025$291–$293 $291–$293 Maintained
Effective Tax Rate (%)FY 202526.5% 26.5% Maintained
Capital Expenditures ($USD Millions)FY 2025~$27.1 ~$24.0 Lowered
Retail Square Footage (%)FY 2025N/A~+2.0% vs 2024 New/affirmed

Management notes guidance includes tariffs in effect as of April 30 but excludes paused additional proposed tariffs; monitoring ongoing negotiations .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Tariffs/MacroConsumer caution; margin cadence; forward-looking risks incl. tariff unpredictability . 2025 margin/SG&A guidance set pre-2025 tariff changes .90-day reprieve helpful; halted most direct China shipments (145% tariff); targeted price increases; minimal expected consumer impact at current tariff levels Heightened focus; near-term mitigation; medium-term uncertainty
Supply Chain & InventoryStrong balance sheet; executing strategy despite housing slowdown .Building inventories (+$5M QoQ) to improve service and delay tariff impact; shifting production to Vietnam/Cambodia/Mexico; Mexico largely exempt under USMCA Proactive repositioning; buffering tariff impact
Product PerformanceAverage ticket rose slightly; merchandising refresh underway .Upholstery/bedroom/mattress in line; weakness in dining/occasional; designer tickets >$7,400 (+9%) Mixed: core categories stable; occasional/dining weaker
Promotions/EventsLabor Day written trends mirrored quarterly declines .President’s Day down ~10%; testing more impactful in-store promotions; aiming for stronger Memorial Day Increasing promotional intensity
Store Growth & MarketsOpened new stores; ending 2024 with 129; expansion goal of five net new stores .Third Houston store planned late Q3; Daytona relocation; closures in Buckhead (6/30) and Waco (9/30) on lease expirations/profitability Prudent expansion; selective consolidation
In-Store Tech & TaggingEmploy data analytics to strengthen brand .Rolling out new point-of-purchase/tagging program by Labor Day; IT CapEx ~$2.6M in 2025 Implementation phase

Management Commentary

  • “Gross margins remained strong for the quarter, coming in at 61.2%… Our pretax profits for the quarter were $5.3 million” — Steven Burdette, CEO .
  • “We have halted most direct shipments from China due to the tariffs, which would be applied… at an additional 145%… we will see price increases… minimal due to our suppliers’ support” — Steven Burdette .
  • “Our 2025 guidance includes tariffs currently in effect as of April 30… and does not include the effect of additional proposed tariffs… We expect our gross margins for 2025 to be between 60% and 60.5%” — Richard Hare, CFO .
  • “We are well positioned to grow from these challenges due to our strong brand, debt-free balance sheet…” — Steven Burdette .
  • From press release: “We are pleased to report solid first quarter results with improved gross margins, earnings, and expense control, despite… weak housing… weather… low consumer confidence, and significant shifts in trade policy” — Steven G. Burdette .

Q&A Highlights

  • Weather and monthly cadence: Written sales down ~2% in Jan, ~5% in Feb (same-day basis), flat in March; multiple storms hit broader footprint; President’s Day down ~10% .
  • Tariff pricing and volumes: Targeted price increases implemented; at current tariff levels, minimal expected volume impact; larger tariffs would be a “different story” .
  • Competitive promotions: Typical aggressive competitor promotions around President’s Day; HVT increasing promotional testing and intensity going forward .
  • CapEx reduction: Cut ~$3M from store expansion given tariff uncertainty; focus remains on Houston additions, timing cautious .
  • Supply chain shift and inventory buffer: Moving China-sourced production to Vietnam/Cambodia/Mexico; inventory build intended to bridge transition and mitigate tariff impact .
  • New stores ramp: Early Houston traffic good; distribution leverage helping control costs; closures based on lease expirations/profitability .

Estimates Context

Metric (Q1 2025)Consensus Mean*ActualSurprise
Revenue ($USD Millions)$177.8*$181.6 +$3.8M*
Diluted EPS ($)$0.14*$0.23 +$0.09*
# of Estimates (EPS/Revenue)2 / 2*N/AN/A
  • HVT delivered a clear beat on both revenue and EPS versus S&P Global consensus; positive revision risk may emerge for FY margin/expense trajectory given lowered variable SG&A guidance and resilient gross margin outlook .

Values retrieved from S&P Global for estimates.

Key Takeaways for Investors

  • Near-term narrative skew positive on execution: EPS and revenue beats versus consensus, driven by mix and tight SG&A, despite soft comps and event-related weather impacts .
  • Guidance quality: Gross margin outlook held at 60.0–60.5%; variable SG&A lowered to 18.6–19.0%, signaling improved expense discipline; CapEx reduced to $24M provides flexibility under tariff uncertainty — supportive for FCF resilience .
  • Tariff mitigation strategy credible: supplier support, targeted pricing, inventory buffer and shift away from China to Vietnam/Cambodia/Mexico; watch for July tariff decisions as potential volatility catalyst .
  • Category mix watch: strength in upholstery/bedroom/mattress; weakness in dining/occasional suggests merchandising and promotion adjustments necessary to drive traffic/units .
  • Market expansion with prudence: continued build-out in Houston and selective relocations/closures should enhance distribution leverage while preserving returns; monitor Houston store openings and ramps in H2 .
  • Seasonal and event cadence matters: President’s Day softness highlights importance of promotional intensity; Memorial Day performance will be an early read on H2 demand normalization .
  • Balance sheet optionality: $118.3M cash, no debt, and $80M credit availability support shareholder returns and strategic investments through macro volatility .

Appendix: Additional Data Points

  • Q1 2025 EBITDA: $9.9M ; Operating cash flow $6.2M; Free cash flow ~$0.1M; dividends paid $5.2M; share repurchases ~$2.0M .
  • Design consultant penetration: 33.2% in Q1; designer average ticket >$7,400 (+9%) .
  • Community/brand engagement: Military Appreciation Event across all 130 showrooms and 78 mattresses donated via partnership (brand goodwill, potential traffic driver) .

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