Haverty Furniture Companies, Inc.

Greetings and welcome to the Haverty's second quarter 2024 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, Richard Hare, Chief Financial Officer. Thank you, Mr. Hare. You may begin.

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 at 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 Securities and Exchange Commission. Our chairman and CEO, Clarence Smith, will now give you an update on our results, and our president, Steve Burdette, will provide additional commentary.

Thank you for joining our second quarter conference call. Total sales were $178.6 million, down 13.4% from last year, but an improvement over the 18.1% decline in the first quarter. We've been proactive in reducing costs where appropriate, and that has helped us produce a pre-tax profit of $6.5 million. Gross margins continue to be strong at 60.4%. Our cash position of over $100 million remains solid and continues to be a major strength. Our balance sheet allows us to continue to invest in future growth opportunities, even in tough times for the industry. We're excited to announce the addition of our second store in Indianapolis in Greenwood, Indiana, which will open late this year. This location will be our fifth new store to open in 2024 and the fifth former Bed Bath & Beyond building. Late this year, we'll open a new store in Pembroke Pines area in Southeast Florida and a store in St. Petersburg, strengthening our position in the Tampa St. Pete region. Both are part of the Bed Bath & Beyond lease acquisition. With these openings, we will have 33 stores serving Florida, our largest state. Our expanded Lakeland, Florida distribution center is ideally located off I-4 and allows for coastal specific products and quick delivery to the region. We have been furnishing Texas homes for over 100 years. Our Austin and College Station stores have been serving the northern part of Houston, And now our move back to Houston, Texas will be a significant effort for the coming years. We plan to open in Woodlands, Texas late this year and add a second store in 2025 in Bay Brook, Texas. We will end this year with 22 Texas stores, our second largest state. We're actively working to add stores in the greater Houston market to add density and to support marketing and to build Haverty's brand position. All these stores will be served by our expanded Dallas, Texas distribution center, allowing for quick delivery and more Western-specific and regional merchandising. We are on target for our goal to open five new stores in 2024 and in 2025, strengthening our service position throughout our 17 states. We're very pleased with the new merchandise that is hitting our floors which has quickly moved up to best sellers. We've added several locations to the better end of our lineup, which along with our enhanced special order and custom products have helped move design business to 35% of sales. These are tough times for a cyclical industry like home furnishings. We're closely tied to housing and interest rates. What we have learned these past decades is the importance of consistent investment in serving and inspiring our customers. This means new locations, upgrading stores, cutting IT systems, and then most importantly, investing in talent. And these are expensive commitments in tough times. We believe that the down cycles provide important opportunities when we can make strategic investments for future growth and position for significant gains in the months and years ahead. I'll now turn the call over to Steve Burdette.