Cost cuts help Havertys post $501,000 profit
By Clint Engel -- Furniture Today, November 9, 2009
Atlanta — Havertys posted a third-quarter profit of $501,000 or two cents per share, benefiting from cost cutting and a small improvement in gross margin despite the tough business climate.
The gain for the quarter ended Sept. 30 compares with a net loss of $1.5 million or seven cents per share in the same period a year ago.
For the year to date, the net loss for the Atlanta-based Top 100 company was $13.3 million or 62 cents per share, versus a net loss of $2.8 million or 13 cents per share for the first nine months of 2008.
As previously reported, net sales for the third quarter were down 13.5% to $151.9 million and same-store sales declined 11.9%.
"The results reflect the considerable effort and difficult decisions that have been made by the Havertys team over the past few quarters," said President and CEO Clarence Smith. He noted that the company was able to reduce selling, general and administrative expenses in the third quarter by 15.7% from a year ago.
"Cost controls and improvements across all facets of our business have led to leaner and more agile operating structures," he said.
Smith said Havertys also has benefited from improved supply chain management, and has new merchandise in the stores at all price points that is fashion-forward and value-oriented.
"Gross margin was flat for the first nine months of the year but up modestly for third quarter due to the slight deflation we experienced in our (last in-first out) inventory valuation," he said.
"The combination of very attractive merchandise and effective periodic promotions are key elements in our strategy to hold margins and gain market share," he said.
Havertys operates 121 midpriced to upscale stores in 17 Southern and Midwestern states.
Haverty Furniture
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
| Quarter ended 9/30 | 2009 | 2008 | Change |
| Sales | $151,945,000 | $175,579,000 | (13.5%) |
| Operating income | 791,000 | (2,404,000) | — |
| Net income | 501,000 | (1,515,000) | — |
| Earnings per share | 0.02 | (0.07) | — |
| 9 months ended 9/30 | 2009 | 2008 | Change |
| Sales | $425,865,000 | $529,243,000 | (19.5%) |
| Operating income | (12,563,000) | (4,975,000) | — |
| Net income | (13,344,000) | (2,792,000) | — |
| Earnings per share | (0.62) | (0.13) | — |
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Cost cuts help Havertys to $501,000 profit
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