Haverty Furniture — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated sales increased 4.5% year-over-year to $203.2 million for the quarter ended September 30, 2026, compared to $194.5 million in the prior year period.
• Comparable store sales increased 4.1% for the quarter.
• Total written business increased 2.8%, with comparable store written business up 2.3%.
• Gross profit margin was 62.3% in the third quarter of 2026, up from 60.3% in 2025; excluding approximately $3.2 million in IEEPA tariff refunds, the margin was 60.7%.
• Diluted earnings per share (EPS) were $0.39 for the quarter, compared to $0.28 in the prior year.
• Net income was $6.3 million for the quarter, compared to $4.7 million in the prior year.
• SG&A expenses were $119.1 million (58.6% of sales) for the quarter, an increase of $6.7 million from the prior year, driven by higher selling expenses (commissions and third-party credit costs) and administrative expenses (stock-based compensation, incentive compensation, and insurance).
• For the nine months ended September 30, 2026, total sales were $587.1 million (up from $557.1 million), gross profit margin was 61.7% (up from 60.8%), and diluted EPS was $0.97 (up from $0.68).
• Cash, cash equivalents, and restricted cash were $127.0 million at September 30, 2026.
• No debt was outstanding at September 30, 2026, with $100 million in credit availability.
• Free cash flow was $29.4 million for the nine months ended September 30, 2026, compared to $30.0 million in the prior year period.
• Operating cash flow was $52.4 million for the nine months ended September 30, 2026, compared to $45.3 million in the prior year.

Guidance and Future Outlook:

• 2026 gross profit margin guidance is increased to a range of 61.3% to 61.5%, reflecting the receipt of IEEPA tariff refunds.
• Fixed and discretionary SG&A expenses for 2026 are expected to be between $307.0 million and $309.0 million.
• Variable SG&A expenses for 2026 are anticipated to be between 19.2% and 19.4% of sales, an increase from previous guidance due to higher delivery, transportation, and third-party credit costs.
• The effective tax rate for 2026 is expected to be 26.0%, excluding discrete items and new tax legislation.
• Planned capital expenditures for the full year 2026 are approximately $34.0 million.
• The company expects to grow to 133 stores by year-end 2026, including five store openings in the fourth quarter.

Business Segments and Product Lines:

• Design consultants accounted for 34.6% of written business in 2026, compared to 34.2% in 2025.
• The company is expanding its footprint with an entry into Pittsburgh, Pennsylvania, marking its 18th state.
• The company reported a total of 130 showrooms in 17 states as of the release date, with plans to reach 133 stores by year-end.

Market and Competitive Landscape:

• The company navigated a soft housing market, higher fuel prices, higher interest rates, continued geopolitical issues, and rising input costs during the quarter.
• The company imports a substantial portion of its merchandise from foreign sources, with exposure to tariffs and supply chain fluctuations.
• Competition includes national, regional, and local home furnishings retailers.

Risks and Challenges:

• Risks include competition, changes in consumer preferences, brand maintenance, and the ability to locate suitable store sites.
• Supply chain risks involve price, availability, and quality of raw materials, reliance on third-party producers, and transportation vendors.
• Operational risks include IT system disruptions, cyber-attacks, labor shortages, and rising oil and gasoline prices.
• Economic risks include fluctuations in consumer disposable income, inflation, recession fears, unemployment, and interest rates.

Management Commentary and Tone:

• President and CEO Steven G. Burdette stated the team delivered another quarter of growth, extending positive momentum in written and delivered comp-store sales against tougher year-over-year comparisons.
• Management expressed being "energized" by the five store openings in the fourth quarter and the expansion into the 18th state.
• The CEO emphasized a focus on executing with discipline and creating long-term value for team members and shareholders while navigating challenging market conditions.

Other Key Points:

• The company purchased approximately 723,000 shares of common stock for $16.6 million during the nine months ended September 30, 2026.
• The company paid $15.8 million in quarterly cash dividends during the third quarter of 2026.
• Total cash returns to shareholders for the nine months ended September 30, 2026, were $32.4 million ($16.6 million in repurchases and $15.8 million in dividends).
• The 2026 guidance includes tariffs currently in effect as of November 4, 2026, but excludes future IEEPA tariff refunds for indirectly sourced products.
• The company invests in people, products, design services, and customer experience as part of its long-term growth strategy.