Q2 2026 Haverty Furniture Companies Inc Earnings Call Transcript
Key Points
- Earnings per share doubled to $0.32 in Q2 2026, with net sales up 7.7% and comparable store sales up 8%.
- Gross margin expanded 60 basis points to 61.4%, driven by strong average ticket growth of 14% to over $3,800.
- Design business continues to thrive, with average ticket up 15.7% to over $8,800 and custom special-order sales rising 23.6%.
- Inventory reduced to $100.5 million from $106.9 million in Q1, with plans to further reduce to $95 million in Q3.
- Opened two new stores in Q2 and plans six more in H2 2026, including entry into an 18th state, with new locations performing ahead of expectations.
- Received $2.1 million in tariff refunds, with potential for additional refunds from indirect suppliers to offset cost pressures.
- Traffic turned positive in Q2, and all merchandise categories saw sales growth, with double-digit increases in upholstery, bedroom, dining, and occasional.
- Expanded AI use across operations, including home delivery and customer chat, to improve efficiency and customer service.
- Maintained a strong balance sheet with $104.3 million in cash, no funded debt, and increased credit availability to $100 million.
- Gross margin excluding tariff refunds was flat at 60.7% versus 60.8% last year, indicating underlying margin pressure.
- SG&A expenses increased 5.4% to $113.2 million, driven by higher commissions, third-party credit costs, and administrative expenses.
- Facing significant cost pressures from fuel increases, including a 25-30% rise in container rates and higher diesel fuel costs.
- Third-party credit costs continue to rise, impacting variable SG&A expenses and overall profitability.
- Closed two stores in Texas (San Angelo and College Station) due to underperformance, reflecting ongoing portfolio optimization.
- Effective tax rate in Q2 was 28.5%, higher than the anticipated 26% for the full year, due to state taxes and stock award vesting.
- Customer deposits increased, but this may indicate higher order backlog, which could strain delivery timelines.
- Tariff refunds from indirect suppliers are uncertain and may be lower than expected due to negotiations and legal fees.
Greetings, and welcome to the Haverty second quarter 2026 earnings call. (Operator Instructions)
It is now my pleasure to introduce your host, Tiffany Hinkle, Assistant Vice President of Financial Reporting and Investor Relations.
Thank you. You may begin.
Good morning and thank you for joining us for our second-quarter earnings call. I am here today with our President and CEO, Steve Burdett, and Executive Vice President and CFO, Richard Hare. Before we begin, I'd like to remind everyone that today's conference call may contain forward-looking statements, which are subject to risks and uncertainties. Actual results may differ materially from those made or implied in such statements, which speak only as of the date they are made and which we undertake no obligation to publicly update or revise. That could cause actual results to differ include economic and competitive conditions and other uncertainties detailed in the company's
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