Haverty Furniture Companies, Inc.

Hello, and welcome to today's conference call. Haverty's reports operating results for fourth quarter 2022. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to CFO Richard Hare. Please go ahead, sir.

Thank you, operator. During this conference call, we'll make forward-looking statements which are subject to risk and uncertainties. Actual results may differ materially from those made or implied in such statements, which speak only as the date they are made, at which we undertake no obligation to publicly update or revise. Factors that could cause actual results to differ include economic and competitive conditions and other uncertainties detailed in the company's reports filed with the SEC. Our Chairman and CEO Clarence Smith will now give you an update on our results and our President Steve Burdette will provide additional commentary about our business.

Good morning. Thank you for joining our 2022 fourth quarter and full year conference call. We're very pleased to report a record fourth quarter and full year performance. Haverty's has produced the highest sales quarters in our history over the past nine quarters going back to the fourth quarter of 2020. For two consecutive years, we have reached $1.1 billion in net sales with record earnings per share. The net sales in 2022 of $1.05 billion was 3.4 percent higher than the record sales achieved in 2021. The earnings per share of $5.24 was up 6.9 percent over the prior year record. As we anniversary our business against the outsized demand generated during the pandemic, our written business for the quarter was down 6.2% compared to the fourth quarter of 2021, but up compared to 2019. Our store traffic has also tracked lower. However, we continue to close more visits, and we've increased our average ticket 25% over the fourth quarter in 2019. The importance of successful customer engagement has never been more critical. Our H design program is a competitive advantage, driving our average ticket increase and an important differentiator from our competition. When an H design professional is involved in a sale, the average ticket increases over 90%. 2022 saw a return to more historically normal sales patterns with holidays and weekends driving volume. To fuel our historic sales, we brought in more goods than ever before. In addition to record sales, we were able to replenish the inventory in our warehouses. We are better positioned now than any time in the past three years to fulfill a customer's order. Our pricing discipline and management of the tire distribution process from shipping containers to the final mile of home delivery has allowed us to achieve record margins for the year. We continue to improve our already strong store positions in our markets. Our growth strategy in the distribution footprint is focused on adding stores in the hottest real estate markets in the United States. In the fourth quarter, we relocated our Indianapolis store and opened a new store in Gainesville, Virginia, a high-growth market outside of Washington, D.C. Last week, we opened our new store in Durham, North Carolina, in a former H.H. Gregg, in that dynamic market. We have plans to open three more stores this year, one in a new market, and two to enhance coverage in existing markets. Our capital expenditures in 2022 were $28.4 million. We plan on spending just under that in the coming year. However, our strong balance sheet provides flexibility, and we will continue to search for growth opportunities. Our goal of five stores a year for the next three years remains. Capital investments will continue to focus on stores, distribution, and IT enhancements. These investments are focused on driving growth in our existing footprint. Our merchandising teams are excited to be finally developing and bringing in new designs, which we put on the back burner during the supply chain and factory delays over the past year. We have significant new arrivals beginning in the next few months in upholstery, bedroom, dining, and mattresses. These collections will see a benefit from lower freight rates. We're very pleased with our record performance. We're facing challenges with lower traffic and written orders when compared to 2021 and 2022. Inflation and slowing housing sales are impacting our business in many of our markets. Our team is committed to serving our customers with fashion, value, design, customization, and excellent service. Over our history, we've consistently gained market share in challenging times. We strongly believe that we will earn a larger share of the market by helping our customers' vision of their home come true in the months ahead. I'll turn the call over now to Steve Burdett, President.