管理層發言
Greetings, and welcome to Haverty's Fourth Quarter 2025 Earnings Conference Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce Tiffany Hinkle, Assistant Vice President of Financial Reporting, Investor Relations. Thank you, you may begin.
Thank you, operator. Good morning, and thank you for joining our fourth quarter earnings call. I'm here today with our President and CEO, Steve Burdette; 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. 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. A replay of this call will be available on our Investor Relations website this afternoon. For commentary about our business, I will now turn the call over to Steve.
Good morning, and thank you for joining our 2025 fourth quarter and 2025 year-end conference call. We are excited to report an increase in both written and delivered comp sales for Q4, marking our second consecutive quarter of positive comps. Our net sales for Q4 were $201.9 million, which was up 9.5% with comps up 8.2%. Total written sales were up 3.5% with comps up 3.2%. Gross margins for the quarter came in at 60.4% versus 61.9% last year. However, we did incur $3.9 million in LIFO charges during the quarter. Pretax income for the quarter was $10.8 million or 5.3% operating margin versus $9.6 million or 5.2% operating margin, resulting in $0.51 a share versus $0.49 a share. For the calendar year 2025, our net sales came in at $759 million, which was up 5% with comps up 2.1%. Gross margins for the year were flat with last year coming in at 60.7%, including $4.6 million in LIFO charges.
Pretax profits were $26.8 million or 3.5% operating margin versus $26.2 million or 3.6% operating margin, resulting in $1.19 a share, which was flat with last year. Richard will provide additional details regarding our SG&A expenses and LIFO impact in his discussion. During the quarter, we saw our written sales fall off as the quarter progressed. However, it was nice to see our after Thanksgiving sales up 6.2% with strong average ticket in design at approximately $8,500 and our overall average ticket at $4,400-plus. For Q4, our average ticket increased 10.9% to $3,759 with design average ticket growing 11.9% to $8,072. Our design business accounted for 33.3% of our sales, driven by our upholstery special order business up 14.8%. Traffic for the quarter followed our written sales trend during the quarter, ending with a decrease in the low single digits for the quarter overall. It is important to remember for comparison purposes that we had just experienced our first positive traffic increase in November and December of 2024 following the presidential election in several years.
Conversion rates remained slightly down for the quarter. For the calendar year, our written business was up 2.8% with comps up 0.7%. Our average ticket came in at $3,530, up 4.7%, and our designer average ticket was $7,781, up 9.7%. Traffic was up in the mid-single digits with conversion rates continuing to show improvement. Our merchandising and supply chain teams continue to partner with our outstanding vendors to ensure that our products are flowing consistently to avoid any disruptions for our customers. Our merchandising team continues to challenge our assortment to make sure that we are testing new styles, new colors, new price points and new categories, which creates excitement for our teams and customers by helping to differentiate ourselves from our competition. From a category perspective, for the quarter, bedroom and upholstery were up mid-single digits, followed by occasional up low single digits; and dining, mattresses and decor coming in flat.
Our inventories are in a great position as we continue to focus on having best sellers in stock for immediate gratification for our customers. At year-end, our inventories were up $12.7 million versus last year to $96.2 million. We do expect to see this drop over the next six months as we had to get in front of some of the most recent tariffs in Q4 with our inventory purchases and new product arrivals. We did get some good news late December when the administration delayed the additional 5% tariff on Section 232 upholstered wood furniture, leaving it at 25%. However, last Friday, we finally heard from the Supreme Court as they ruled that the IEEPA tariffs were illegal. As we heard over the weekend from the administration, and we verified this morning effective at 12:01 a.m. today, a 10% worldwide tariff has been issued through Section 122 of the 1974 Trade Act. This tariff to understanding will replace the IEEPA tariffs and the fentanyl tariffs and these Section 122 tariffs are not stackable on Section 232 tariffs or applicable under the current USMCA agreement; however, they are stackable with the Section 301 tariffs.
Haverty's will be thoughtful and deliberate in our approach with the continuing tariff adjustments so that we have a minimal impact on our customers, team members and shareholders. Our marketing, creative and media plans continue to resonate with our customers through broadcast, connected TV and digital marketing channels. We saw web traffic and key site engagement increased double digits year-over-year, contributing to our in-store success, and our written e-commerce sales increased 12.3% for the quarter. We ran our second direct mail campaign in late October in preparation for the after Thanksgiving shopping period. It was a 16-page piece mailed to approximately 750,000 new customers that highlighted our product assortment and design capabilities. We refined our targeting models based on results from the first campaign and added pricing, which we believe helped contribute to an improved conversion rate.
Our marketing dollars were down slightly for the quarter as a percent of net sales, as we were able to leverage the increase in sales. We continue to emphasize 60 months no interest for competitive reasons in our promotions, creating an increase in our credit costs for the quarter. However, these credit costs remained slightly down for the year. We ended the year at 129 stores, but already have plans for 5 new stores in 2026. Four of the stores have been announced in St. Louis, Nashville and 2 in Houston. We are excited to announce today that we will be entering Pennsylvania, which will be our 18th state. We will open in Q4 in North Pittsburgh across from the Ross township mall. We are currently in lease negotiations on several other locations that we hope to be able to announce by next quarter's call. The opening of 5 new stores in 2026, along with 4 planned remodels, a refresh of the mattress and design areas in our stores, of which approximately 35% will be done, will push our CapEx budget to around $33.5 million, which Richard will cover in more detail.
After careful evaluation, we have decided to close our Alexandria, Louisiana, location in March. This decision to close was driven by significant demographic shifts in the market, stagnant housing growth and the need for a major remodel. We wanted to thank all our team members who have served the Alexandria customers and surrounding markets for over 40-plus years. Our dedicated distribution, home delivery and customer service teams continue their wonderful work serving our customers across our 17, soon-to-be 18 states. All of our new store growth will be served by our current distribution network, requiring no new investments. The ability of the teams to adjust the business to the current demands is outstanding, allowing us to provide our customers with a memorable experience on each and every encounter. The industry continues to face ongoing challenges. But even with all the uncertainty, our optimism remains high as we rebounded in 2025, feeling like we hit an inflection point in Q3 with the momentum continuing into Q4.
Our push in 2026 is to continue our focus on testing new ideas and processes along with continuing our organic store growth. Thank you to all our Haverty team members for your dedication to our customers and our company's success. Our people define us, and I am proud to be a part of this great team. I want to continue to repeat that our debt-free balance sheet, our Haverty-branded products, our operational consistency, our integrity, our consumer focus, our design services, our commitment to quality and our regret-free experience provides our customers with the comfort and confidence to know that furnishing their homes with Haverty's is a great long-term investment. I will now turn the call over to Richard.
Thank you, Steve, and good morning. In the fourth quarter of 2025, net sales were $201.9 million, a 9.5% increase over the prior year quarter. Comparable store sales were up 8.2% over the prior year period. Our gross profit margin decreased 150 basis points to 60.4% from 61.9%. Excluding the impact of the $3.9 million LIFO expense in the fourth quarter of '25 and the $925,000 LIFO pickup in the prior year quarter, our adjusted gross profit margin increased 100 basis points to 62.4% from 61.4%. Selling, general and administrative expenses increased $6.6 million or 6.3% to $112.5 million. As a percent of sales, these costs approximated 55.7% of sales, down from 57.4% in the prior year's quarter. We experienced increased selling, occupancy and administrative costs during the quarter. Other income expense in the fourth quarter of 2025 was $29,000, and interest income was approximately $1.2 million during the fourth quarter of 2025.
Income before income taxes increased $1.2 million to $10.8 million. Our tax expense was $2.3 million for the fourth quarter of 2025, which resulted in an annual effective tax rate of 26.5% for the year. Net income for the fourth quarter of 2025 was $8.5 million or $0.51 per diluted share on our common stock compared to net income of $8.2 million or $0.49 per share in the comparable quarter last year. Now turning to our balance sheet. At the end of the fourth quarter, our inventories were $96.2 million, which was up $12.7 million from December 31, 2024, and up $3.7 million versus Q3 of 2025. At the end of the fourth quarter, our customer deposits were $35.5 million, which was down $5.2 million from the December 31, 2024, balance and down $8.4 million from the Q3 2025 balance. We ended the quarter with $125.3 million of cash and cash equivalents, and we have no funded debt on our balance sheet at the end of Q4 of 2025.
Looking at some of our cash flow usage. Capital expenditures were $4.4 million for Q4 2025 and $19.7 million for the calendar year. We also paid out $5.3 million of regular dividends in the quarter and $20.8 million for the calendar year. We purchased $2.8 million of common stock during the quarter at an average price of $22.63. During the calendar year, we purchased a total of $4.8 million of common stock, representing 216,482 shares. On February 20, 2026, our Board of Directors approved an additional $15 million authorization for our share buyback program. We currently have approximately $18.3 million of existing authorization in our buyback program. Our earnings release lists out several additional forward-looking statements, including our future expectations of certain financial metrics. I will highlight a few, but please refer to our press release for additional commentary. On February 20, 2026, the Supreme Court invalidated certain tariffs imposed by the administration under the International Emergency Economic Protection Act during 2025.
The administration announced its intentions to impose new tariffs under different regulations. Our 2026 guidance includes the impact of the new tariffs announced by the administration. We continue to monitor tariff developments and assess their potential impact on our business. We expect our gross margins for 2026 to be between 60.5% and 61%. We anticipate gross profit margins will be impacted by our current estimates of product freight and LIFO expenses. Our fixed and discretionary type SG&A expenses for 2026 are expected to be in the $307 million to $309 million range. The increases over 2025 are primarily related to store growth and modest inflation. The variable-type costs within SG&A for 2026 are expected to remain in the range of 18.6% to 18.8%. Our planned CapEx for 2026 is $33.5 million. Anticipated new or replacement stores, remodels and expansions account for $27.2 million. Investments in our distribution network are expected to be $3.2 million, and investments in our information technology are expected to be approximately $3.1 million.
Our anticipated effective tax rate in 2026 is expected to be 26%. This projection excludes the impact from vesting of stock awards and any potential new tax legislation. This completes my commentary on the fourth quarter financial results. Operator, we would like to open up the call for any questions at this time.
分析師問答
First question comes from Anthony Lebiedzinski with Sidoti & Company.
Certainly nice performance here in the fourth quarter. Can you first just start us off with just some further details about your same-store sales trends throughout the quarter? If you could just kind of walk us through October through December, provide some additional color on that?
Sure. In terms of the trend for the business, we experienced high single-digit growth in written business for October. In November, we saw middle single-digit growth, while in November and December, there was a slight decline in low single digits. Regarding deliveries, we were up 10% in October, mid-single digits in November, and nearly 15% in December.
That's very helpful. As we consider the guidance for variable SG&A expenses for '26, it suggests a mostly stable percentage compared to '25. You've mentioned some sales growth, and although there was a slowdown in the last month of the quarter, it's still the second consecutive quarter of positive same-store sales. Could you please explain the various factors that are influencing the variable aspect of your SG&A outlook for '26?
Certainly. In the fourth quarter, we reported an 18.9% performance, and we're optimistic about our guidance for 2025 being in the range of 18.6% to 18.8%. For this year, we aimed to keep things consistent. While we expect some leverage, we foresee increased selling costs in 2026 due to higher sales commissions. To stay competitive, we might also face additional costs from third-party credits next year, so we're keeping that percentage flat. We have raised our gross profit margins, despite facing significant pressure this year related to LIFO, as noted in our press release. With prices expected to stabilize in 2026, we don't foresee as much pressure going forward, which gives us confidence in our gross profit margin guidance. Additionally, the nonvariable costs are largely driven by store growth and inflation. We ended with $298 million, with an estimate midpoint of $308 million, which means about a $10 million difference. Approximately 40% of that increase is attributed to occupancy costs linked to business growth, while the rest is due to a modest 2% inflation on wages and incentives. We don't anticipate a significant rise in advertising costs, as most nonvariable pressures come from occupancy expenses and general wage inflation, including insurance costs.
That's very helpful. Okay. And then so with the evolving tariff environment, how do you guys think about as far as any additional potential new pricing actions? Is there anything already in the works or are you going to be holding off for now? Just wondering if you could speak to that?
Yes, Anthony, this is Steve. We are going to be very careful in that process. Our current inventories already reflect the existing tariffs, so we need to manage those inventories before we can assess the impact of the new tariffs and their sustainability. It's currently at 10%, but over the weekend, there were discussions about the administration increasing it to 15%. We need to see if that will happen and when. For now, we won't be taking any actions or making reactions to it. We will wait and see how it plays out in the coming months as we manage this inventory.
Got you. And my last question here. So as we look to update our quarterly models, is there anything that we should be aware of in terms of seasonality or timing of expenses or anything related to recent weather events that you guys need to call out? Just would love to hear your thoughts on that.
I'll say it and Richard can jump in here. I would say no, Anthony. And as far as weather events, we always have snow and weather in January and February, so that's not something that's unusual. So I don't see anything that would be a call out.
Your next question comes from Cristina Fernandez with Telsey Advisory Group.
I wanted to follow up on the tariff question. If the tariff goes to 15% from 10%, does that change the gross margin guidance you gave in perhaps a little bit more color on the timing of the inventory you have today, the tariff rate that was in effect in the fourth quarter, how long will it take to work through that inventory? Are we mostly looking at the first half or a little bit longer?
Yes, regarding the guidance, I don’t anticipate any changes. We have it set at either 10% or 15% moving forward. In terms of managing the inventory, I believe it will take us the first half of the year. We will be strategic about it and will make adjustments if necessary to stay competitive at certain price points. However, we will still be able to maintain the guidance we've provided for margins going forward. At this moment, it seems we will work through the existing inventory during the first half of the year before introducing newer inventory with updated costs. Additionally, this new tariff is only in effect for 150 days and will expire on July 24. We are aware that the administration is actively considering further options under Section 232 and Section 301 to potentially increase tariffs. Only time will tell how that unfolds.
And then I wanted to ask about the trends in the quarter that you talked about, specifically the written order trends that they decelerated a bit. Do you feel it's more a function of the year-over-year comparisons? Or do you notice any change, I guess, on the underlying, I guess, consumer behavior as you look at your regions or traffic or kind of what consumers were looking for when they came into the stores?
I don't think there’s anything specific, but I will say that the government shutdown did not help us. Being shut down for almost 45 days didn't create a good precedent as we move forward and introduced some uncertainties. However, when we look at traffic, especially comparing back to '24, we saw double-digit growth in traffic in November and December of '24. So we aren't worried about traffic and we are excited about the average ticket we have been able to increase, mainly through design. We're actually noticing a rise in design and the number of pieces per ticket, which is encouraging as we proceed. Nothing appears alarming to us in the overall trend, and we are pleased with the overall numbers.
And then my last question is regarding the mattress, the bedding refresh program. I think you tested it at a couple of stores. So can you talk about the lessons you've gotten and the stores that you tested it? And I guess what's changing the most? Is it the presentation, the merchandising? Maybe a little more detail on what consumers will see as you go through that program.
Yes, it will take us until next year to complete the updates across all the stores. This year, we are working on about 35% of the stores where we are implementing the mattress and design centers. We've seen positive movement with our bedding offerings. The changes are more about making the information clearer for consumers regarding each mattress set, which also assists our sales consultants in providing the necessary details to customers. The presentation is significantly improved. Highlighting the brands makes them more visible to consumers when they enter the store and increases awareness of our presence, which was less prominent before. This focus on branding has certainly drawn more consumer attention to this category. Recent reports indicated that the mattress business declined in the fourth quarter by mid-single digits or more, while we remained flat in that period. Therefore, we're optimistic about the progress we're making, especially in the stores that have revamped their bedding departments.
The last question I had was regarding marketing and advertising. You mentioned some investments and adjustments through 2025. You indicated that fourth quarter spending decreased, so looking ahead to 2026, do you anticipate marketing and advertising to remain steady as a percentage of sales? How should we view that expense item and the investments associated with it?
Yes. In '25, we increased our advertising. I think it's up about $4 million for the year. And that was because we cut it too much in '24. But we do feel like we're at that level. And in 2026, we anticipate our marketing spend to be flat with 2025.
Thank you for your participation in today's call. We look forward to speaking with you in the future when we release our first quarter results. Have a great day, everyone.
This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.