Havertys' income jumps 8.4% in third quarter
By Clint Engel -- Furniture Today, November 5, 2006
Atlanta — Strong sales and margins helped Havertys to an 8.4% increase in third-quarter profit, but the Top 100 company warned that an industry-wide slowdown will likely lead to a sales decline in the current period.
Net income for the Atlanta-based retailer with 120 stores in 17 Southern and Midwestern states grew to $4.1 million. Sales were up 10.3% to $222.9 million and same-stores sales increased. 8.2%.
Through the first three quarters, Havertys' net income grew nearly 55% to $12.8 million.
The fourth quarter, however, got off to a rough start, with October sales decreasing 7.6% from the same month a year ago to $63.5 million, with same-store sales down 10.1%. Havertys President and CEO Clarence Smith said business gained steam in early November, but it's going to be difficult to make up the difference through the rest of this year.
Smith said strong sales and gross profit in the third quarter were tempered by increased costs. Last year's third quarter results also included a $2.6 million one-time gain from the sale of two stores and a warehouse.
Selling expenses were up in the recent quarter, largely because more sales were financed by customers under outsourced no-interest credit promotions and the related increased discount rates paid by Havertys.
The retailer opened two stores in August — its first in the Fort Lauderdale, Fla., area, and another in the Cedar Hill suburb of Dallas, replacing an older showroom. It also closed its Texarkana, Texas, store during the quarter.
Havertys just opened an additional Cincinnati-area store in Florence, Ky., and next year plans to open five stores including its first Huntsville, Ala., location and a second one in Austin, Texas.
Smith also said the company is overhauling its haver-tys.com Web site and expects to be selling online — with a focus on building business in existing markets — by the end of next year.
| Haverty Furniture | |||
|---|---|---|---|
| Earnings per share are fully diluted. | |||
| Quarter ended 9/30 | 2006 | 2005 | Change |
| (a) Includes other pretax income of $100,000 in the 2006 quarter, $2.6 million in the 2005 quarter, $1.3 million in the 2006 nine months and $3.1 million in the 2005 nine months, including a $2.6 million gain on the sale of real estate in the 2005 periods. |
|||
| Sales | $222,940,000 | $202,044,000 | 10.3% |
| Operating income | 5,276,000 | 2,943,000 | 79.3% |
| Net income (a) | 4,136,000 | 3,816,000 | 8.4% |
| Earnings per share | 0.18 | 0.17 | 5.9% |
| 9 months ended 9/30 | 2006 | 2005 | Change |
| Sales | $643,063,000 | $602,071,000 | 6.8% |
| Operating income | 16,817,000 | 9,498,000 | 77.1% |
| Net income (a) | 12,830,000 | 8,300,000 | 54.6% |
| Earnings per share | 0.56 | 0.36 | 55.6% |
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