Haverty Furniture Companies Inc Q4 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Anthony Lebiedzinski - Sidoti & Company, LLC - Analyst : Good morning, gentlemen, and thank you for taking the questions.

Question: Anthony Lebiedzinski - Sidoti & Company, LLC - Analyst : So first, can you talk please about the cadence of your written sales as the quarter progressed? And just wondering if you saw any notable changes in terms of different geographies or different regions.

Question: Anthony Lebiedzinski - Sidoti & Company, LLC - Analyst : Yes, thanks for that color, Richard. So just wondering as far as the big change between October and the rest of the quarter, was this just more people buying stuff around the holidays or like anything you can share as far as what drove the 21% decrease in October than you were, I guess, less bad and the rest of the quarter?

Question: Anthony Lebiedzinski - Sidoti & Company, LLC - Analyst : Understood. Okay. And one of your peers said yesterday during its conference call that they were hurt by severe weather in January. Though they said their President's Day sales were somewhat better on. Can you share with us anything like directionally as far as how the current year has started for you?

Question: Anthony Lebiedzinski - Sidoti & Company, LLC - Analyst : Understood. Okay. All right, but just wondering if you also saw that impact as well. Got you. Okay. And then, Steve, you talked about rightsizing of staffing. Can you share with us as far as like what your employee count was, whether at the end of the year or like where it is now? And how does that compare to the prior year? Obviously, four years ago, when you had the COVID pandemic initially hit, you guys did a big cut to your employee base then you rehired some people. So can you just share some perspective as to how you're structurally different than where you are now versus pre-pandemic levels as far as the employee count?

Question: Anthony Lebiedzinski - Sidoti & Company, LLC - Analyst : Got you. Okay. And then lastly for me before I pass it onto others. So Steve, you also mentioned that you're experimenting, I guess, with some new alternative financing programs. Can you expand on that? Give us some additional color.

Question: Anthony Lebiedzinski - Sidoti & Company, LLC - Analyst : Understood. Well, thank you very much and best of luck.

Question: Michael Legg - The Benchmark Company, LLC - Analyst : Thanks, good morning. Wanted to follow up a little bit on the financing question. What percent of your sales were financed? And then of the consumers who tried to finance, what did you see from the approval rate versus historic trends?

Question: Michael Legg - The Benchmark Company, LLC - Analyst : Okay. And then promotion in the industry, can you talk what you're seeing from competitors in your area?

Question: Michael Legg - The Benchmark Company, LLC - Analyst : Okay. And then we have the store growth with the Bed Bath & Beyond leases that you took over. Previously, we had mentioned that you have been looking at some out-of-the auction on your own. What's your viewpoint now with still going after new stores that you don't have already?

Question: Michael Legg - The Benchmark Company, LLC - Analyst : Okay, great. Thanks. And one more question. Just on the design initiative, I know we have roughly one designer per store. There have been talk, I believe, about possibly increasing that despite the headcount reduction that's been planned. What's going on the designer staffing?

Question: Michael Legg - The Benchmark Company, LLC - Analyst : And then just as your sales have pulled back after COVID, are any of these sales commissions and the salespeople, are they still making the money they need to be happily employed or their compensation, is it down? How does that look?

Question: Michael Legg - The Benchmark Company, LLC - Analyst : Great. And then just one more. Outdoor, is that still slated to start launching in select stores?

Question: Michael Legg - The Benchmark Company, LLC - Analyst : Great. Thanks, guys.

Question: Cristina Fernßndez - Telsey Advisory Group LLC - Analyst : Hi, good morning. Wanted to start with a big picture question. Can you talk about what your view is of the housing market in 2024 that's informing your planning for the business? And do you think based on your positioning that you can outperform the overall market?

Question: Cristina Fernßndez - Telsey Advisory Group LLC - Analyst : Okay. So then another question, wanted to understand better the cost inflation that you're seeing on the various categories and the increase on the SG&A. I know you don't guide to revenues. But when I do the math, let's assume, let's say like flat revenues, it implies an operating margin that's down based on my calculation, about 250 basis points at the midpoint based on the ranges you gave. So maybe just kind of walk us through sort of the increases you are seeing? And do you see this as temporary? Or are there efforts to kind of trying to get back to that high single digit, double digit operating margin? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 22, 2024 / 3:00PM, HVT.N - Q4 2023 Haverty Furniture Companies Inc Earnings Call

Question: Cristina Fernßndez - Telsey Advisory Group LLC - Analyst : Okay. That's very helpful. And then the last question I had. On the store openings, I guess how should we think about the contribution of your new stores? You're opening more stores this year. If your average store did about $7 million in sales in 2023, how is normally the ramp up of a new store to get to that level, like how -- usually what's year one? How does it ramp up to maturity?

Question: Cristina Fernßndez - Telsey Advisory Group LLC - Analyst : Great. Thank you for the color and best luck this quarter.