Shares of Haverty Furniture Companies Inc. (NYSE:HVT), a home-furnishings and mattress retailer, jumped nearly 10% Tuesday after the company announced solid first-quarter results.
Investors were obviously pleased with the results, and the data shows a lot of improvement across the board. Starting from the top, Haverty's net sales moved 3% higher to $200.4 million, just slightly topping analysts' consensus estimates. Part of the increase was powered by a 1.6% increase in comparable-store sales, and its average written ticket was up 2.9%. Its gross profit margins increased 100 basis points to 54.7%, thanks to lower freight costs on imported products and a stronger merchandise sales mix. All of that helped generate earnings of $0.28 per share, a jump over last year's $0.21 per share and well ahead of analysts' calls for $0.23 per share.
Clarence H. Smith, chairman, president and CEO, said in a press release:
We are pleased with the first quarter sales and earnings given the choppy retail environment. Our merchandising team has developed a great assortment of products to meet the discerning tastes of the on-trend consumer. The upholstery category continues to drive our business with strong sales and favorable margins, and we had good results from the mattress and accessory groups.
It's clear that management's focus will be improving the profitability of each store, rather than solely focusing on growth by store openings. Management is making adjustments to its media mix to zero in on localized marketing, enhancing its website and improving its associate training to produce higher in-store closing rates. If the company can execute on those strategies, this won't be the last strong earnings result for investors to enjoy.