Havertys' sales climb 8.3% in fourth quarter

Larry Thomas, Furniture Today -- Home Accents Today, 2/27/2013 9:46:46 AM

ATLANTA - Aided by a successful advertising campaign and expanded custom and special order upholstery programs, Top 100 retailer Havertys said fourth-quarter sales rose 8.3%.

The 122-store chain reported that same-store sales were 6% above the fourth quarter of 2011, while the average ticket rose 7.8%.

"We are very pleased with these results and look forward to the opportunities in 2013. The initiatives towards attracting the ‘on trend' customer are gaining traction," said Clarence Smith, chairman, president and CEO. "The higher sales volume enabled us to better leverage our fixed and discretionary costs."

Net sales for the quarter were $182.3 million, up from $168.3 million in the final quarter of 2011.

Gross margins were 52.8% of sales, up from 52.3% in the 2011 fourth quarter.

Net income totaled $6.78 million or 30 cents per share. That compares with $17 million or 76 cents per share in the comparable period. The fourth quarter of 2011 included a non-cash gain of about $14.1 million, or 64 cents per share, for the reversal of nearly all of the valuation allowance against the retailer's deferred tax assets.

For the full year, sales totaled $670 million, an increase of 7.9% from $620.9 million in 2011.

Net income was $14.9 million or 67 cents per share. That was down from $15.5 million or 70 cents per share in 2011.

Smith said 2013 has started strong, noting that written and delivered sales are up about 14% over the same period last year. However, he said comparisons for the remainder of the quarter will be more difficult because last March was strong, there is one less day in February this year, and Easter weekend occurs in March this year.

The holiday weekend, which is traditionally a slow period for furniture sales, fell in the second quarter last year.

"Our merchandising and customer-centric focus distinguishes us in the marketplace and gives us an edge over our competitors," said Smith. "The improving housing and overall economic data bode well for Havertys as we are prepared operationally and financially to exploit the shifts in demand."

In addition to the expansion of three stores this year and the renovation of 18 others under its Bright Inspirations program, Havertys said it will close three stores during the first half of this year. The combined moves should result in a 1% decrease its retail square footage.

In a conference call with the investment community, Smith said the closing stores are in Roanoke, Va., Clearwater, Fla. - where it is looking for another location - and Jackson, Miss.

Smith also said the company continues to seek expansion opportunities in its core markets.