ATLANTA — Havertys said its earnings for the second quarter, ended June 30, were driven by “solid gross margin improvement and attention to operating costs.”
Net sales for the period were$253.2 million, up 1.3% from the same period in 2021. Comp-store sales were up 1.1%, and total written sales were down 13.3% for the quarter.
Gross profit margins increased 130 basis points to 57.9% for this year’s second quarter, which the company attributed to pricing discipline and merchandise mix.
Net income for the company was $21.7 million, down 5% year over year from last year’s $22.9 million. Still, Havertys reports earnings per share of $1.27, up from $1.21 last year.
“These results are particularly gratifying as we are comparing with last year’s record-setting growth,” said Clarence H. Smith, chairman and CEO, in the earnings report. “Supply chains issues are subsiding, and we are restoring our operating inventory levels and reducing our backlog of orders.”
Smith noted that Havertys is seeing consumers return to their historical spending patterns, with concentrations around traditional holiday events. “We have had declines in in-store traffic and outside these peak periods, and our written business was down 13.3% for the quarter compared with last year,” he said.
While Smith said Havertys believes consumers are still investing in their home, he noted that the second half of 2022 could see that spending impacted by rising inflation, market volatility and geopolitical concerns.
The company projects gross profit margins for 2022 will be between 57.7% and 58%. It also noted that fixed and discretional expenses within SG&A for the year are expected to be between $293 million and $295 million, reflecting changes in previous guidance for marketing spend and increases in selling and delivery costs.