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HAVERTY FURNITURE COMPANIES INC (HVT) Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered a clean top-line and EPS beat: revenue rose 10.6% to $194.5M and diluted EPS was $0.28, versus consensus of $182.98M and $0.24, respectively; gross margin held at 60.3% despite higher SG&A and LIFO expense from tariff effects . The beat was driven by strong Labor Day performance, double-digit written and delivered sales, and the first positive written and delivered comp in several years .
  • Comparable store sales turned positive (+7.1%), with total written business +10.0% and comp written +8.0%; average ticket rose 6.1% to $3,668 and designer average ticket rose 11.9% to $7,986, reflecting effective merchandising and marketing investments .
  • Guidance tightened higher on gross margin (now 60.4–60.7% for FY25 vs prior 60.0–60.5%) and fixed/discretionary SG&A (now $296–$298M vs prior $291–$293M), acknowledging heavier marketing/admin spend; variable SG&A remains 18.6–18.8%, tax rate unchanged at 26.5%, capex unchanged at $24M .
  • Narrative catalysts: sustained traffic gains, marketing ROI (direct mail, broadcast/digital), tariff-driven pricing execution with minimal demand impact, resumed special order flow, and store growth resuming in 2026 (five net new stores) with a third Houston opening in Q4; management highlighted leverage potential >$800M revenue and a debt-free balance sheet .

What Went Well and What Went Wrong

What Went Well

  • “Strong Labor Day weekend performance, double-digit growth in written and delivered sales” and the first positive written and delivered comp-store sales in several years; comparable-store sales +7.1% and gross margin 60.3% (+10 bps YoY) .
  • Average ticket rose 6.1% to $3,668; design business remained robust at 34.2% of sales with designer average ticket +11.9% to $7,986, reflecting effective merchandising/mix and targeted pricing .
  • Management raised FY25 gross margin guidance (60.4–60.7%) and maintained capex at $24M while reaffirming the debt-free balance sheet and liquidity ($137.0M cash including restricted) .

What Went Wrong

  • SG&A increased $11.4M (+11.3%) and rose to 57.8% of sales (vs 57.4% prior year), driven by higher advertising/marketing (+$2.8M), selling expense, occupancy, and administrative/incentive compensation; this muted operating margin despite sales strength .
  • Pre-tax income fell to $6.4M (3.3% of sales) from $6.9M (3.9%); LIFO expense of ~$0.6M pressured gross margins, reflecting tariff cost flow-through .
  • Macro/tariff overhang remains: high rates and weak housing, finalized 25% tariffs on specific imported upholstery moving to 30% from Jan 1, 2026; pricing adjustments and LIFO will continue into Q4 and likely into next year .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$175.9 $181.0 $194.5
Gross Profit Margin %60.2% 60.8% 60.3%
SG&A as % of Sales (Total)57.4% 59.3% 57.7%
Pre-tax Income ($USD Millions)$6.9 $4.3 $6.4
Pre-tax Margin %3.9% 2.4% 3.3%
Net Income ($USD Millions)$4.9 $2.7 $4.7
Net Income Margin %2.8% 1.5% 2.4%
Diluted EPS ($)$0.29 $0.16 $0.28

KPIs and Operating Metrics

KPIQ1 2025Q2 2025Q3 2025
Comp-Store Sales Growth %-4.8% -2.3% +7.1%
Total Written Business Growth %-2.6% +0.4% +10.0%
Comp Written Business Growth %-6.3% -2.1% +8.0%
Design Consultants Share of Written Business %33.2% 33.4% 34.2%
Average Ticket ($)$3,314 “just under $3,400” (qualitative) $3,668

Estimates vs Actual (Q3 2025)

MetricConsensus*ActualSurprise
Revenue ($USD)$182,983,500*$194,484,000 +$11,500,500 (+6.3%)*
Diluted EPS ($)$0.24*$0.28 +$0.04 (+16.7%)*
# of Estimates (EPS, Revenue)2 / 2*——

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious Guidance (as of Jul 30, 2025)Current Guidance (as of Oct 29, 2025)Change
Gross Profit Margin %FY 202560.0%–60.5% 60.4%–60.7% Raised
SG&A – Fixed & Discretionary ($M)FY 2025$291–$293 $296–$298 Raised
SG&A – Variable (% of Sales)FY 202518.5%–18.8% 18.6%–18.8% Slight ↑ lower bound
Effective Tax Rate %FY 202526.5% 26.5% Maintained
Capital Expenditures ($M)FY 2025~$24.0 ~$24.0 Maintained
Retail Square FootageYE 2025Consistent with 2024 Consistent with 2024 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
AI/Technology & DigitalImplement new POP/tagging; loyalty email (~$8M Q1). Q2: AI algorithms for ad efficiency; Adobe Edge rollout; +15.6% organic traffic; web sales +8.4% .Continued AI/data analytics to improve targeting; double-digit web traffic and e-commerce written +13.6% .Improving digital engagement
Supply Chain & Special OrdersQ1: Halted most direct China shipments (145% additional tariff); vendors moving production; inventory build to cushion . Q2: Realigning production to Vietnam/Cambodia/Mexico; inventory +~5% since Q1 .New 25% tariffs finalized Oct 14 on upholstered wood products from Mexico/Vietnam/Cambodia/Thailand/Indonesia, moving to 30% Jan 1, 2026; resumed special orders; vendor collaboration; price adjustments .Operational normalization with tariff pass-through
Tariffs/MacroHigh rates, weak housing, low confidence; pricing actions as needed .Continued macro pressure; mention of government shutdown, monitoring Supreme Court/tariff policy; LIFO expense increased and will continue .Cautious but managed
Product PerformanceQ2: Upholstery/bedroom positive; bedding/occasional down low-single digits; dining/decor down high-single digits .Q3: Bedroom/bedding low–mid double-digit outperformance; upholstery/occasional high-single digits; dining/decor mid-single digits .Mix shift favoring bedroom/bedding
Regional TrendsQ2: broadly consistent across districts .Q3: Stronger in Midwest, Georgia Central, Florida, Texas; East lighter but positive .Broad-based improvement
Marketing & PromotionsQ2: +$1.1M marketing, direct mail success; 60 months no interest; promotions extended .Q3: +$2.8M marketing (TV/direct mail), first direct mail in years effective; continued 60 months financing .Higher spend, strong ROI

Management Commentary

  • “Our third-quarter results were highlighted by a strong Labor Day weekend performance, double-digit growth in written and delivered sales, and our first quarter of positive written and delivered comp-store sales in several years.” – Steven G. Burdette, President & CEO .
  • “We will adjust retail prices strategically to maintain our values and margins… our vendors' collaboration [helps] deliver strong values to our customers.” – CEO on tariffs and pricing .
  • “Excluding the impact of a $624,000 LIFO expense… gross profit margin would have been 60.6%.” – CFO on tariff-related LIFO .
  • “When we get particularly above $800 million… you really start seeing [SG&A] falling significantly to the bottom line.” – CFO on leverage threshold .
  • “We expect to resume store count growth in the first quarter of 2026, targeting five net new store openings for the year.” – CEO on footprint expansion .

Q&A Highlights

  • Monthly cadence: written comps ~+10.6% July, +10.9% August, +8% September; deliveries +11.6% July, +7% August, +13.1% September; strength broadly across districts, with Midwest/GA/FL/TX strongest .
  • Tariffs/LIFO: price increases implemented in early October; LIFO expense YTD ~$750k vs prior-year ~$800k benefit; LIFO expected to continue rising through Q4 and into next year .
  • Expense outlook: FY25 fixed SG&A raised due to advertising and incentives; FY26 non-variable costs expected to grow in line with normal inflation; marketing spend now at sustainable levels .
  • SG&A leverage threshold: CFO indicated meaningful operating margin expansion historically above ~$800M revenue .
  • Pricing and demand: management sees minimal pushback; unit sales trend aligned with overall sales; strategic pricing to preserve margin guidance .

Estimates Context

  • Q3 2025 results beat Wall Street expectations on both revenue and EPS: revenue $194.48M vs $182.98M consensus (+6.3%), EPS $0.28 vs $0.24 (+16.7%), with two covering estimates on each metric.*
  • Beat drivers: traffic gains, higher average tickets, effective marketing/promotions, resumed special orders, and maintained gross margin despite LIFO/tariff costs .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Positive comp inflection with double-digit written/delivered growth and robust average ticket supports near-term estimate revisions higher; gross margin guidance raised despite tariff/LIFO headwinds .
  • SG&A intensity elevated by marketing/admin; watch for operating leverage as sales scale toward ~$800M where margins historically expand; management expects FY26 non-variable costs to grow modestly .
  • Tariff regime now clearer; strategic pricing already in place, with LIFO impact continuing near term; monitor elasticity and category mix (bedroom/bedding strength) .
  • Store fleet poised for 2026 growth (five net new), with Houston expansion accelerating local marketing ROI and potential revenue leverage without new distribution investment .
  • Balance sheet optionality intact: $137.0M cash, no debt, $80M credit availability; continued dividends and buyback authorization provide shareholder return flexibility .
  • Trading implications: Near-term momentum from comp turn and margin discipline could support multiple expansion; risks include macro housing softness, tariff volatility, and SG&A normalization.
  • Estimate trajectory: Expect upward adjustments to revenue/EPS for Q4 given pricing execution and seasonal events; monitor LIFO/tariff cost absorption and promotional cadence for margin sustainability .

Additional notes:

  • Q3 2025 8-K 2.02 and full press release read; Q3 2025 earnings call transcript read; no additional standalone press releases found for Q3 2025 .
  • Prior quarters read for trend analysis: Q1 and Q2 2025 8-Ks and transcripts .

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