Haverty Furniture Reports Second Quarter Loss

Furniture World Magazine

Haverty Furniture Companies, Inc. reported a loss in earnings for the second quarter ended June 30, 2007. The net loss for the second quarter of 2007 was $1.4 million or $0.06 per diluted share of Common Stock, as compared to the second quarter 2006 net income of $3.6 million or $0.16 per diluted share of Common Stock. For the six months ended June 30, 2007, the net loss was $520,000 or $0.02 per diluted share of Common Stock versus net income of $8.7 million or $0.38 per diluted share of Common Stock for the same period in 2006. Net sales for the second quarter of 2007 were $187.1 million, a decrease of 11.3% compared to sales of $211.0 million for the corresponding quarter in 2006. As previously reported, comparable-store sales decreased 12.7% for the quarter. Clarence H. Smith, president and chief executive officer, said, "Severely weak sales volume early in the quarter created a difficult hurdle for us and produced a quarterly loss. We had noted in our May and June sales releases that with the double-digit sales declines we would not be profitable. Sales were especially poor in the first half of the quarter but we were heartened by the improvement in volume and return to profitability for June. "The close management of our merchandise flow and clearance activity resulted in a reduction in inventory of $15.5 million or 13.1% as compared to year ago levels. The increased clearance sales contributed to a 64 basis point reduction in gross profit margins versus the second quarter last year. "SG&A expenses were $4.9 million lower than last year's second quarter with decreases in all major categories except occupancy, which was up approximately $1.0 million due to overhead associated with new stores. "The second quarter is typically the weakest of the year for Havertys. We expect to return to profitability in the second half as fixed expenses are leveraged with the seasonally higher sales volume anticipated." Havertys is a full-service home furnishings retailer with 122 showrooms in 17 states in the Southern and Midwestern regions providing its customers with a wide selection of quality merchandise in middle- to upper-middle price ranges. Additional information is available on the Company's web site at http://www.havertys.com.