Havertys (HVT) announced its operating results for the first quarter ended March 31, 2025, reporting diluted earnings per common share (EPS) of $0.23. This figure surpassed the $0.14 EPS reported in the first quarter of 2024 and beat analyst estimates. Net income for the quarter was $3.8 million.
Despite the earnings beat, net sales decreased by 1.3% to $181.6 million compared to $184.0 million in Q1 2024, with comparable store sales declining by 4.8%. Written business also saw a decrease of 2.6% overall and 6.3% on a comparable basis, attributed to persistent housing market issues and cautious consumer sentiment.
The company demonstrated strong profitability management, with gross profit margin improving by 90 basis points to 61.2% from 60.3% in the prior year, driven by favorable product selection. Selling, general, and administrative (SG&A) expenses decreased by 2.0% to $107.2 million, improving to 59.0% of sales from 59.4%.
Havertys' balance sheet remains robust with $111.9 million in cash and no funded debt, providing significant financial flexibility. Operating cash flow increased to $6.2 million from $3.1 million in Q1 2024. The free in-home design service continued to be a key differentiator, driving 33.2% of written sales with an average ticket of $7,422, up over 9% year-over-year.
For 2025, Havertys expects gross margins between 60% and 60.5%, fixed and discretionary SG&A between $291 million and $293 million, and variable SG&A between 18.6% and 19% of sales. Capital expenditures are planned at $24 million, a reduction from earlier plans due to market uncertainty. The effective tax rate is anticipated at 26.5%.
The company is actively addressing tariff uncertainty by shifting production away from China and increasing inventories of best-selling products to mitigate potential supply disruptions. Strategic store growth remains a priority, with plans for a third Houston store in late Q3 2025 and two more by mid-to-late 2026.
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