Havertys (HVT) reported its second-quarter 2025 operating results, with GAAP revenue growing 1.3% year-over-year to $181.0 million, surpassing consensus expectations of $176.9 million. This marks the first year-over-year increase in GAAP sales since Q4 2022. GAAP earnings per share (EPS) were $0.16, modestly above the $0.14 GAAP estimate, though diluted EPS declined to $0.16 from $0.27 in Q2 2024.
Despite the overall revenue growth, underlying comparable store sales fell by 2.3%, indicating that new store openings primarily drove the top-line increase rather than stronger existing-store performance. Total written business, an indicator of future delivered sales, rose by 0.4% year-over-year, suggesting continued softness in core operations.
Gross profit margin improved to 60.8% from 60.4% in the prior-year quarter, attributed to effective marketing and promotional strategies. However, selling, general, and administrative (SG&A) expenses increased to 59.3% of sales from 57.7%, driven by higher administrative and occupancy costs related to new store openings, with fixed costs rising 2.6 percentage points year-over-year.
Net income dropped to $2.7 million, a 39.4% decline year-over-year. The company's cash position remained healthy at $113.8 million with no debt outstanding. Operating cash flow for the first six months of 2025 was $13.4 million, down from $17.5 million in the prior year period, due to increased inventory in anticipation of potential tariff hikes.
Havertys maintained its full-year 2025 guidance for gross profit margins between 60.0% and 60.5%, and unchanged capital expenditures of $24.0 million, primarily for new store openings and relocations. The guidance excludes the effects of additional proposed tariffs, which could materially affect cost structure and margins if enacted.
The board declared a quarterly dividend for common stock of $0.32 per share, consistent with the previous quarter. Share repurchases totaled $2.0 million in the first half of 2025. The company continues its expansion with new store openings in Houston and other markets, while actively managing supply chain uncertainties related to tariffs.
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