Havertys Raises EPS to $0.39 as Third-Quarter Sales Grow 4.5%
Key Facts
Havertys reported on November 4, 2026, that diluted earnings per share rose to $0.39 in the third quarter ended September 30, compared with $0.28 in the year-earlier period. Net income increased to $6.3 million from $4.7 million, alongside a 4.5% rise in consolidated sales to $203.2 million. Comparable-store sales also grew 4.1% year over year. The results put sales and earnings growth alongside higher operating expenses as a share of sales. The company's stock, HVT, closed at $29.43 in the November 3 session, according to EL7 data.
Gross margin was 62.3% for the quarter, compared with 60.3% a year earlier, but the comparison was affected by tariff refunds. The company said the margin was 60.7% excluding the effect of about $3.2 million in refunds under the International Emergency Economic Powers Act. The adjusted margin therefore remained above its year-earlier level, while the refunds lifted the reported figure to 62.3%. Havertys said receipt of the funds also led it to raise its full-year gross margin outlook. These figures distinguish the improvement in the underlying margin from the accounting effect of refunds included in the quarter's results.
On the demand side, total written business rose 2.8% during the quarter, and written business at comparable stores increased 2.3% year over year. Written business represents orders recorded during the period, while reported comparable-store sales growth was 4.1%. Design consultants accounted for 34.6% of written business in 2026, compared with 34.2% a year earlier. For the nine months ended September 30, the average ticket was $3,838, versus $3,459 in the year-earlier period. In the second quarter, comparable-store sales had grown 8.0% year over year, and gross margin was 61.4%, compared with 60.8%; this puts the slowdown in comparable-store sales growth in the third quarter in the context of the prior quarter's performance.
Selling, general and administrative expenses rose to 58.6% of sales from 57.8% a year earlier, and their total amount increased by $6.7 million. The company attributed the increase to a $1.8 million rise in selling expenses and a $4.1 million increase in administrative expenses. It said the increase in administrative expenses was mainly related to accelerated recognition of stock compensation during the quarter, as well as performance incentives and group insurance. The rise in these expenses as a share of sales means revenue growth did not prevent the operating burden from increasing relative to sales volume. In its statement, the CEO said the company delivered growth "in the face of a weak housing market, higher fuel and interest rates, ongoing geopolitical issues and rising input costs."
For the first nine months of the year, sales rose to $587.1 million from $557.1 million in the year-earlier period. Operating cash flow was $52.4 million, compared with $45.3 million a year earlier, while free cash flow was $29.4 million versus $30.0 million. Cash, cash equivalents and restricted cash totaled $127.0 million on September 30. The company had no outstanding debt on that date and had $100 million in available credit. These indicators show a divergence between higher operating cash flow and lower free cash flow over the same period.
Havertys raised its 2026 gross margin outlook to a range of 61.3%–61.5%, saying the increase from its previous outlook reflects receipt of refunds under the International Emergency Economic Powers Act. The company expects fixed and discretionary selling, general and administrative expenses of between $307 million and $309 million for the year, alongside capital expenditures of about $34 million. In the fourth quarter, it plans to open five stores, including its entry into Pittsburgh, Pennsylvania, the 18th state it has entered. The company is targeting 133 stores by year-end. These openings and full-year outlook represent the next steps the company announced at the close of its quarterly results.