Haverty Furniture Companies Inc. (NYSE:HVT.A) Q1 2016 Earnings Conference Call - Preliminary Transcript

May 03, 2016 • 10:00 am ET

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Haverty Furniture Companies Inc. (NYSE:HVT.A) Q1 2016 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good day and welcome to Haverty's First Quarter 2016 Financial Results Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Mr. Dennis Fink, Executive Vice President and CFO. Please go ahead, sir.

Executive
Dennis Fink

Thank you, George. Good morning, everybody.

During this first quarter conference call, we'll make forward looking statements which are subject to risks and uncertainties. Actual results may differ materially from those made or implied in such statements. We speak only as of the date they are made, in which we undertake no obligation to publicly update or revise.

Factors that could cause actual results to differ include economic and competitive conditions, and other uncertainties detailed in the company's reports filed with the SEC.

Our president CEO and Chairman Clarence Smith, will now give you an update, on our results. And I'll direct Clarence.

Executive
Clarence Smith

Thanks for joining our 2016 first quarter conference call. As we previously reported net sales increased 1.7% to $194.5 million, with comparable store sales up point 9% or written sales were down 1.3% and written comparable sales down 2.2%. Our net earnings were 4.67 million compared to 6.1 million last year, or $0.21 per share versus $0.27.SG&A dollars for the first quarter increased $4.1 million compared with the same period last year. These were related to additional advertising, particularly in digital and direct mail and selling expenses related to our H-Design program and increased occupancy and depreciation, relating to our upgrades and new stores over the past 20 plus months.

We are pleased with the recent sales increase so far in the second quarter, with April comparable delivered sales up 4.5% and written sales up 4.1% after adjusting for the Easter holiday. We feel that many of the investments we have made in our H-Design program, our store upgrades and higher quality merchandise, aligned with our target marketing, is gaining traction.

For the second quarter to-date, we have seen a higher closing rate on flat traffic. We were encouraged by the recent performance and hope the trends continue in the months ahead. We are investing approximately $33 million this year in CapEx, with almost half related to IT systems and hardware upgrades and a major expansion of our Lakeland, Florida distribution center opening this summer.

The distribution center experience will allow us to import more product directly to Florida, bypassing our North Georgia distribution center, which has been the main storage facility for that state. This will help us reduce incoming freight cost, especially from Asia, and allow us to serve our 25 stores in the growing Florida markets, with specific coastal style merchandise much faster.

We are excited about the major improvements in our operations, with particular focus on the state-of-the-art warehouse and delivery scanners and new supply chains import support system, and the roll-out of the company to the company, of a new trial-based collaborative system. We've made major improvements in our web site presentation and the ease of use across multiple devices.

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