Havertys 1Q profits surge 56.3% on sales gain of 4.4%
By Clint Engel -- Furniture Today, April 28, 2002
ATLANTA — Havertys posted a 56.3% increase in first-quarter profit and a 4.4% sales gain, with imported goods and its proprietary Havertys branded merchandise playing a key role.
The Atlanta-based retailer earned $6.7 million on sales of $175 million in the quarter. Same-store sales increased 3.4% from a year earlier.
First-quarter earnings per share of 30 cents tied a record set in 2000, when the economy was healthier.
"We are pleased to again perform at this level, especially since we believe that the expected general recovery has only just begun," said Jay Slater, president and chief executive officer of the 104-store chain.
Slater noted that gross margins improved as Havertys' merchandise mix continued moving toward "imports with more style at traditional price points and items sold under the proprietary Havertys private-label brand."
Tony Wilkerson, senior vice president of marketing, said in a conference call that private-label goods now account for more than a quarter of the merchandise mix, and should reach 30% before midyear.
The Havertys brand was the retailer's fourth-largest seller at the end of the year and the third largest by the end of the first quarter. Now, it's No. 2 behind Broyhill — part of Furniture Brands International, which has a stable of producers that account for about half of the retailer's merchandise mix.
About 61% of the Havertys-brand goods are imported, from 23 suppliers.
As previously reported, earnings for the quarter were affected by a $1 million pretax charge for costs associated with the company's plans to vacate warehouses in the next 12 months as a new distribution center comes on line.
Havertys remains on schedule with its aggressive expansion plans this year, which include opening 11 stores, three of which will replace existing locations. It will also consolidate its Charlotte and Atlanta regional warehouses into a single 511,000-square-foot distribution center in Braselton, Ga., in the third quarter.
"We believe the effort and expenditures for these changes in our infrastructure are an excellent investment in our future," Slater said.
| Quarter ended 3/31 | 2002 | 2001 | Change |
|---|---|---|---|
| Sales(a) | $174,953,000 | $167,599,000 | 4.4% |
| Operating income | 12,662,000 | 7,996,000 | 58.4% |
| Net income | 6,730,000 | 4,307,000 | 56.3% |
| Earnings per share(b) | 0.30 | 0.20 | 50.0% |
| (a) Excludes credit service charge revenues of $2.4 million in the 2002 quarter and $3.1 | |||
| million in the 2001 quarter. (b) Based on average shares outstanding of 22.3 million in the 2002 quarter and 21.3 million in the 2001 quarter. | |||
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Havertys continues climb with sales up 8.2% in 1Q
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