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Haverty Furniture Reports 16.2% Sales Increase For March

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Havertys' sales for March increased 16.2% to $73.2 million compared with $63.0 million for March 2004. On a comparable-store basis, March sales increased 10.8%. Sales for the first quarter of 2005 increased 9.1% to $207.6 million compared with $190.3 million in 2004. On a comparable-store basis, sales increased 4.7% for the first quarter. Comparable-store sales do not include locations opened, closed or otherwise non-comparable during the last 12 months. Clarence H. Smith, president & chief executive officer said, "Sales for March were excellent as the flow of best selling imported merchandise improved and allowed for a strong volume of deliveries to our customers. The tone of new business remained very good for the month as our written sales orders were up approximately 6% over last year on a comparable-store basis. "As we have previously reported, our gross profit margins for the last three quarters have been pressured by various factors. These include competitive pricing on widely distributed merchandise and higher levels of close outs due to the distribution relocations. These same dynamics continued during the first quarter of 2005 and so gross margins are down compared to the first quarter of 2004 and comparable to the subsequent periods. "When we reported on our 2004 fourth quarter results, we reiterated that earnings for the first quarter of 2005 would be negatively impacted by the expenses of relocating our Florida distribution center and the related closing of five local market warehouses. This transition completes the physical moves resulting from the total revamping of our distribution and home delivery methods and facilities that we began in 2002. "Although these changes have been very costly in the short run, we believe Havertys is now well positioned to manage increases in both comp-store and new store sales volume in a cost effective manner and with improved customer service," Smith concluded. Havertys is a full-service home furnishings retailer with 118 showrooms in 16 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 http://www.havertys.com/.

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