Haverty Furniture Companies, Inc.

Greetings and welcome to the Haverty first quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Richard Hare, Chief Financial Officer. Thank you, sir. You may begin.

Thank you, operator. During this 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 of the date they are made and 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 then our president, Steve Burdett, will provide additional commentary about our business.

Good morning. Thank you for joining our first quarter conference call. Consolidated sales decreased 5.9% to $224.8 million, with comparative store sales down 6.7%. Earnings per share came in at $0.74 versus $1.11 last year. In the face of difficult headwinds and the shift of consumer spending and inflationary pressures, I believe our teams delivered a strong performance. As we anniversary our business against the outsized demand generated by COVID, our incoming orders have declined. For Q1, our written sales were down 11.7% and written comp store sales declined 12.7 for the quarter. However, this year's written sales compared to Q1 of 2019 were up 10.9% with written comp store sales up 6.9%. We're building our reputation for quality service and design. Our free design service continues to drive increases in average sales and these services are helping grow our special order business. Our strong design service and excellent sales teams along with a high quality further separates us from the more promotional players in our industry. I share our team's enthusiasm for the new collections and merchandise hitting our floors. We've developed great values and exciting new styles which we believe will be well accepted by our customers. We've added to our curated collections and online exclusives which greatly broaden our breadth of products. This spring, we're bringing in several new collections of outdoor furniture and enhance new category for our stores. With the major reductions in orders from our factories, we're getting lower minimum shipments, which will put less pressure on our buying teams to bring in new products without risking over inventory problems. We're in a strong inventory position and are right-sizing our buying for what we need compared to the large orders we were required to place during the last few years. In February, we opened a new location in Durham, North Carolina. We plan to open three stores in the fourth quarter in Concord, North Carolina, north of Charlotte, Dayton, Ohio, and a store south of Richmond, Virginia. Our development and real estate teams are actively evaluating and reviewing the number of store opportunities that we're seeing in our delivery footprint. We've invested upgraded and repositioned our stores in our 16-state footprint over the past several years, which sets us up to be able to add to our store fleet. We have the range to serve several more states from our DCs. We think there will be a number of retail locations that will be available in the coming months that would help us reach new markets and expand our presence in existing markets. We have a long 138-year history of gaining market share during difficult times, and we believe that we're in an exceptionally strong position with our solid balance sheet to grow our store count in our regions. While housing sales in the South are an important indicator for our business, we believe our move to personalization and customization, along with our strength in the faster-growing Southern markets, help offset softer housing numbers. We were encouraged by the recent better selling news from home builders. As housing prices moderate and mortgage rates improve, we expect to see some positive movement in our sales. Haverty's is driven to help our customers' vision of their home come to life. I believe that we're in the best position in our industry as well as in our history to deliver on that vision. As we deliver on that promise, we will gain share and build our return for our shareholders. I turn the call now over to Steve Burdette, our president.