Haverty Furniture Companies, Inc. (NYSE:HVT) Q2 2016 Earnings Conference Call - Final Transcript

Aug 02, 2016 • 10:00 am ET


Haverty Furniture Companies, Inc. (NYSE:HVT) Q2 2016 Earnings Conference Call - Final Transcript


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Good day and welcome to the Haverty's Second Quarter 2016 Financial Results Conference Call. Today's conference is being recorded. Now, at this time I would like to turn the conference over to Mr. Dennis Fink, Executive Vice President and Chief Financial Officer. Please go ahead, sir.

Dennis Fink

Thank you, and good morning everyone. (Forward-looking Cautionary Statements) Our President, CEO and Chairman, Clarence Smith, will now give you an update on our results and progress. Clarence?

Clarence Smith

Good morning. Thanks for joining us on our second quarter conference call. As previously reported, net sales and comparable store sales rose 3.8% for the quarter. Written total and comparable store sales both rose 6%. Our average ticket increase about 2.2%, traffic was slightly lower, but we were encouraged by our improved closing rate for the quarter and year-to-date.

Earnings for the second quarter were $0.24 compared to $0.21 for the same period last year. For the first half, earnings per share were $0.45 compared to $0.48 last year. We did see our SG&A increase as a percent of sales to 49.6% compared to 49.4% last year. These increases were largely due to high administrative cost related to increased healthcare cost, selling expense and occupancy related to new stores that have opened in the last year.

Both written and delivered sales for Q3 to date are up 3.8% with comparable store delivered sales up 3.9% and written comp sales up 3.6%. This year we've made heavy investments in the systems and the infrastructure to help provide a better experience for or customers.

The major hardware computer additions that our CIO Head, Clairy and his dedicated team installed this spring with upgrade so the leading edge IBM Power8 has helped to cut the screen speed when placing orders on our stores by over half. The purpose of these upgrades is to help serve all of our customers in every phase of the shopping cycle, including the processing and handling of the product through delivery.

We've added new state-of-the-art scanners for all of our drivers and service technicians to provide a paperless system and to speed up every stage of handling merchandise through completion of our top drover delivery process.

We recently had over a 100 of our vendors and freight carriers into Atlanta for a supply chain partner summit to bring all of our partners up to speed on the installation of our new GT Mix of system and their expected committed to our mutual success.

This program ties all of our partners involve in the manufacture movement of import merchandise from preproduction, manufacturing, Haverty's dedicated quality teams, ocean, transport, shipping lines and domestic freight lines all in one single platform. Every partner will have an necessary visibility throughout the entire process so that our supply chain team will have a much tighter time table for product arrival and guarantee in the delivery time for our customers.

We've developed with our VP of Supply Chain of Abir Thakurta and his team what is recognized to be one of