HAVERTY FURNITURE COMPANIES, INC. reported earnings for the third quarter ended September 30, 2009. The earnings for the third quarter of 2009 were $501,000 or $0.02 per diluted share of Common Stock, as compared to the third quarter 2008 net loss of $1.5 million or $0.07 per diluted share of Common Stock.
For the nine months ended September 30, 2009, the net loss was $13.3 million or $0.62 per diluted share of Common Stock versus the net loss of $2.8 million or $0.13 per diluted share of Common Stock for the same period in 2008.
As previously reported, net sales for the third quarter of 2009 were $151.9 million, a decrease of 13.5% compared to sales of $175.6 million for the corresponding quarter in 2008. Comparable-store sales declined 11.9% for the quarter.
Clarence H. Smith, president and chief executive officer, said, "In light of the weak demand for home furnishings, we are pleased with our third quarter operating performance. The results reflect the considerable effort and difficult decisions that have been made by the Havertys team over the past few quarters. Our third quarter sales were off 13.5% and we were able to reduce SG&A by 15.7% compared to the same period last year. Cost controls and improvements across all facets of our business have led to leaner and more agile operating structures.
"Advancements in the availability of real-time information allow our supply chain team to more closely follow our import orders from the manufacturing plant through each stage of transit. This helps us to better manage our inventory and merchandise flow, and to more accurately set customer delivery dates prior to receipt of product. Our warehouse and delivery teams are benefiting from new computer applications which help reduce levels of damaged merchandise, provide real-time tracking of our delivery trucks and improve the customer's post-store experience. A new prospecting and communications tool, which helps foster the relationship between our sales associates and their customers after a store visit, has been rolled out chain-wide. These improvements to the "back-end" of our business are being complemented by new merchandise which carry both strong fashion statements and an obvious value.
"Gross margin was flat for the first nine months of the year but up modestly for third quarter due to the slight deflation we experienced in our LIFO inventory valuation. We have worked closely with our suppliers to create values for our target consumers. These new products, which are across all of our price points, are receiving good reviews from our customers. The combination of very attractive merchandise and effective periodic promotions are key elements in our strategy to hold margins and gain market share.
"Given that the portion of our third quarter 2009 SG&A costs which are mostly fixed in nature were approximately 36% of the quarter's sales we are encouraged by the opportunities for leveraging these expenses and generating future earnings should sales improve from current levels. Although we will continue looking for ways to contain spending and improve efficiencies, we do not anticipate achieving further significant fixed cost reductions as compared to the third quarter level. Variable type expenses making up the remainder of our third quarter SG&A costs were approximately 16% of sales, a rate we believe will continue as sales fluctuate.
"We have maintained a strong balance sheet throughout this economic maelstrom. We have no funded borrowings and our cash at September 30, 2009 is $46.1 million. Our written business to date in the fourth quarter is flat compared to the same period last year. We believe that in these difficult times the home furnishings customers in our markets will gravitate to Havertys' strong merchandise values and tradition of service."
Havertys is a full-service home furnishings retailer with 121 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 website at www.havertys.com.