Havertys earnings drop 23.9% as sales fall 3.8%
By Furniture Today Staff -- Furniture Today, October 28, 2001
ATLANTA — Top 100 chain Havertys said it earned $5.6 million or 26 cents per share in the third quarter, down 23.9% from the same period a year ago as sales fell 3.8% to $170.6 million.
"Our focus on improving gross margins resulted in third-quarter earnings at the high end of our recent 24 cents to 26 cents per share guidance," said Jay Slater, president and chief executive officer. "We managed our inventory and product introductions well and also benefited from the strength of branded products we carry, including those under the Havertys brand."
He added the retailer will turn more to Havertys-branded and exclusive products in coming months.
Those accounted for 11% of what the store's core inventory carried at the beginning of this year and about 19% now. Slater said the percentage will reach 25% early next year, and the retailer's merchandising group is looking at boosting it to 30% by the end of 2002.
Core inventory makes up about 80% of what each store sells, so 25% of that equals 20% of total inventory.
The store generally can offer better values and get higher margins from the store-brand and exclusive product, Slater said. Such product might include a name brand, such as Broyhill, on goods sold only by Havertys in its distribution areas.
Same-store sales fell 8.8% in the third quarter, the company said. Dennis Fink, chief financial officer, said the same-store number was "running slightly positive" in October so far, with total sales up in the 6% to 7% range.
For the fourth quarter, Fink said the company is projecting sales in the $180 million range, up about 2.5%, with same-store sales falling 3% to 3.5%. Management is "comfortable" with the consensus Wall Street earnings estimate of 33 cents per share, compared with 39 cents in the 2000 fourth quarter.
| Quarter ended 9/30 | 2001 | 2000 | Change |
|---|---|---|---|
| Sales | $170,645,000 | $177,345,000 | (3.8%) |
| Operating income | 9,355,000 | 12,085,000 | (22.6%) |
| Net income | 5,611,000 | (a)7,376,000 | (23.9%) |
| Earnings per share | 0.26 | 0.35 | (25.7%) |
| 9 months ended 9/30 | 2001 | 2000 | Change |
| Sales | $490,359,000 | $505,499,000 | (3.0%) |
| Operating income | 22,239,000 | 32,658,000 | (31.9%) |
| Net income | 12,481,000 | (a)16,312,000 | (23.5%) |
| Earnings per share | 0.58 | 0.77 | (24.7%) |
| (a) Includes a $3.4 million extraordinary charge, the cumulative effect of an accounting change. | |||
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