True to form, when furniture retailer Haverty
Since most financial news outlets that cover this kind of news tend to focus on the short term, quarter-by-quarter aspects of the releases, and in honor of Haverty's three-in-a-row performance, in today's column I think we'll do something a little different, and show you how Haverty has done on average over the last three quarters.
Sales & profits & cash profits
Year to date, Haverty has accomplished the following:
- Grown its sales 7% in comparison to the first three quarters of 2005
- Grown its profits 55%, netting $0.56 per diluted share
- Reversed last year's negative free cash flow, replacing it with a positive $8.4 million
- Expanded its gross margin 180 basis points to 49.4%, its operating margin 92 basis points to 3%, and its net margin 62 basis points to 2% even.
In our pre-earnings Foolish Forecast, I also promised to keep an eye on Haverty's balance sheet for you, since inventories had been outpacing sales growth in the first half of the year. The news here is good. Haverty's vaunted "better in-stock levels and . reduction in the time to complete home delivery after a customer's purchase" drove accounts receivable down 22%. Meanwhile, the slight discrepancy between inventory and sales growth has been erased. With inventories up 6% on average over the last three quarters, inventories are now rising less quickly than sales.
And not a moment too soon. According to CEO Clarence Smith, October's sales were weaker than last year's, and the "definite slowdown" in furniture sales -- an opinion supported by recent reports from everyone from Ethan Allen
Haven't heard about the slowdown yet? Don't just take Smith's word for it; find out what the other furniture companies have been saying in:
- Hooker's Stinky Perfume
- Unstuffing La-Z-Boy
- Sealy's No Sleeper Yet
- Taking Tempur-Pedic's Temperature
Fool contributor Rich Smith does not own shares of any company named above.