Havertys 2Q sales rise 7.1% as profits plummet 64.1%
By Janice Chamberlain -- Furniture Today, August 7, 2005
Atlanta — Second-quarter sales for full-line retailer Haverty Furniture increased 7.1% as net income plummeted 64.1%. Same-store sales rose 2.3%.
Sales In the quarter came to $192.4 million, measured against $179.6 million in the comparable 2004 period. Net income in the latest quarter fell to $1.3 million from $3.6 million last year.
In the six months, Havertys sales were up 8.1% to $400 million from $369.9 million a year ago. Profits in the first half slid 53.7% to $4.5 million.
President and CEO Clarence Smith said, "We believe that sales for big-ticket furniture items have been hampered by a number of factors, including rising fuel costs, continued negative impressions concerning the economy in the media, and heavy promotional activity by the automobile industry.
"Our marketing and merchandising teams have developed a slightly more promotional strategy for implementation in the second half of the year to more aggressively compete for our customers' dollars," he said.
Smith said he expects gross margins to improve in the third and fourth quarters, since the chain has completed the planned closings of local warehouses and liquidated inventories.
In a conference call with analysts, Smith said Havertys was seeing a strengthening in the average retail selling price per SKU of more than 3% year-to-date. In July, the average price increased 4.5%.
He said the company had seen "significant fallout of other retailers in our markets, and we expect there will be further failures ... highlighting how difficult it is to be successful in our business."
| Haverty Furniture | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 6/30 | 2005 | (a)2004 | Change |
| (a) Restated. (b) Includes credit service charge income of $875,000 in the 2005 quarter, $1.2 million in the 2004 quarter, $1.9 million in the 2005 six months and $2.5 million in the 2004 six months. | |||
| Sales | $192,394,000 | $179,614,000 | 7.1% |
| Operating income | 1,835,000 | 5,505,000 | (66.7%) |
| Net income (b) | 1,309,000 | 3,646,000 | (64.1%) |
| Earnings per share | 0.06 | 0.16 | (62.5%) |
| 6 months ended 6/30 | 2005 | (a)2004 | Change |
| Sales | $400,027,000 | $369,915,000 | 8.1% |
| Operating income | 6,555,000 | 14,465,000 | (54.7%) |
| Net income (b) | 4,483,000 | 9,692,000 | (53.7%) |
| Earnings per share | 0.20 | 0.42 | (52.4%) |
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