Haverty Furniture's Q4 2024: Contradictions in Regional Performance, Traffic Trends, and Marketing Strategies

These are the key contradictions discussed in Haverty Furniture Companies' latest 2024Q4 earnings call, specifically including: Regional Performance, Traffic Improvement, Tariff Impact, Sales Trends, Market Demand, and Marketing Strategy:



Sales Decline and Comp Sales:
- Havertys reported fourth quarter sales of $184.4 million, down 12.5% with comparable store sales (comps) down 13.7%.
- The decline was attributed to rising mortgage rates affecting housing affordability and a challenging economic environment.

Gross Margin and Operating Margin:
- Gross profit margin decreased by 50 basis points to 61.9%, driven by a change in the LIFO reserve.
- Pretax profit for the quarter was $9.6 million, with an operating margin of 5.2%.
- The decline in gross and operating margins was due to decreased selling costs and lower advertising expenses.

Traffic Improvement and Customer Engagement:
- Traffic saw a positive gain year-over-year and was low single digits for the quarter.
- Conversion rates stabilized with written sales improving throughout the quarter.
- The improvement was driven by getting elections behind and tariff-related disruptions being avoided.

Store Expansion and Inventory Management:
- Havertys opened six new stores and closed one, ending the year with 129 stores.
- Inventories were reduced by over 11% for the year, but plans are to increase them by 5% to 10% over the next few quarters.
- The company is preparing for increased store growth and managing potential tariff-related production and pricing issues.