Haverty Furniture's Q2 2025: Navigating Tariffs, Pricing Strategies, and Consumer Reactions

Impact of tariffs on pricing strategy, consumer response to pricing increases, extended payment plans and their impact are the key contradictions discussed in Haverty Furniture Companies' latest 2025Q2 earnings call.



Sales Increase and Market Challenges:
- Haverty Furniture Companies reported first-quarter sales increase in Q2 2025 after a two-year decline, with Q2 sales at $181 million.
- The growth was driven by a 1.3% increase in written sales and a 0.4% increase in total written sales, despite a 2.3% decrease in comparable store sales.
- Despite challenges such as a struggling housing market, high interest rates, and inflation, consumer resilience and positive traffic contributed to this growth.

Gross Margins and Strategic Pricing:
- Gross margins improved to 60.8%, up 40 basis points from the previous year's quarter.
- This improvement was due to strategic product selection and merchandising mix, as well as successful pricing adjustments implemented in May to offset tariff impacts.

Marketing and Promotional Efforts:
- Haverty's invested $1.1 million in marketing promotions during Q2, with a focus on competitive credit offerings and aggressive promotional strategies.
- This investment resulted in a $17 million revenue from a loyalty email campaign, contributing to overall sales growth despite a slight decrease in average ticket.

Inventory and Supply Chain Management:
- Inventory levels rose by $4.6 million or 5% since Q1, with an anticipated flat inventory for the remainder of the year.
- The increase was strategically driven by rising demand for best-selling products and proactive management of supply chain disruptions, particularly in China.

Store Expansion and Real Estate Strategy:
- The company plans to open two new stores in Houston and relocate one store in Daytona Beach in 2025, while closing two locations in Atlanta and Waco.
- Four additional leases are secured for 2026 openings, although some planned openings for 2025 have been pushed back due to real estate market conditions and CapEx adjustments.