ATLANTA — Continued inflationary worries at the consumer level provided headwinds for Top 100 retailer Havertys in the second quarter of FY2023, even as its average ticket reached new heights.
Through the first six months of 2023, the Atlanta-based retailer reported an average ticket of $3,250, up 4.1% vs. 2022’s levels.
“The impact of inflation and rising interest rates have caused some consumers to pull back on discretionary home related spending. Our second quarter sales reflected this challenge, particularly early in the quarter,” said Clarence H. Smith, chairman and CEO. “The second quarter’s average ticket was an all-time high aided by our free in-home design service involvement in 28.6% of sales. Gross profit margin also reached a historic high as freight and product costs declined. Operationally, we are identifying processes for improvement and cost reductions to further improve our efficiency and performance.”
For the three months ended June 30, sales came in at $206.3 million, down 18.52% from $253.2 million in the same quarter of 2022. Havertys recorded net income of $11.8 million, or 70 cents per diluted share, down 45.62% from net income of $21.7 million, or $1.27 per diluted share over the same three months of 2022.
Through the first six months of 2023, Havertys reported sales of $431 million, down 12.43% from $492.2 through the first two quarters of 2022. Year-to-date net income was $24.2 million, or $1.44 per diluted share, down 41.12% from $41.1 million, or $2.37 per diluted share. Through the first six months of 2023, Havertys reported $38.3 million in EBITDA, giving it an EBITDA margin of 8.89%.
As conditions improve, Smith said Havertys is positioned to take advantage. “We are carefully watching the economic green shoots in the housing market as we enter the second half of the year. Our financial strength and experienced teams position us to capitalize on the opportunities ahead,” he said.
Also, he noted Havertys has filled the pipeline with a quartet of store locations it acquired from the Bed Bath & Beyond bankruptcy.
“These stores will allow us to reach more consumers in the Memphis, Tenn., and Destin, Fla., markets, southeast Florida near Miami, and St. Petersburg in the Tampa Bay area, which is one of the hottest markets in the country,” Smith said. “We expect these locations will open as Havertys stores in the first half of 2024. The sites are within our current footprint enabling us to further leverage our investment in a best-in-class distribution network.”