Haverty Furniture Shares Fell Despite Earnings Beat - Analyst Blog
03 Marzo 2014 - 6:00PM
Zacks
Shares of Haverty Furniture
Companies Inc (HVT) fell 1.5% since Feb 25, despite
reporting a decent fourth quarter 2013 results on Feb 24. Share
price decline was prompted by a sluggish outlook for the first
quarter of 2014.
This home furnishing retailer
reported fourth quarter and full year 2013 results on Feb 24.
Haverty, which provides home furnishings in the middle to
upper-middle price range, delivered earnings of 42 cents, beating
the Zacks Consensus Estimate of 39 cents by 7.7% and the prior-year
earnings of 30 cents by 40% on the back of sales growth across its
entire home furnishings line.
Net sales increased 7.6% year over
year to $196.2 million in the fourth quarter attributable to strong
comparable store sales increase of 9.5%. Continued expansion of the
custom order business, free in-home design service, and higher
average ticket led to sales growth in the quarter. Haverty’s sales
were also boosted by the consistent rise in home sales. Sales were
in line with the Zacks Consensus Estimate.
In addition, Haverty announced that
total written sales for the fourth quarter of 2013 increased 6.3%
and written comparable store sales increased 7.7% year over year
driven by the gradual housing market recovery.
Outlook
Despite decent fourth quarter
results, the company expects sluggish growth in the first quarter
of 2014, primarily due to a volatile retail sales environment. For
the first quarter of 2014, the company expects comparable store
written business to increase approximately 3.6%, which is much
lower than comp sales growth of 9.5% in the fourth quarter of 2013.
The company also stated that some new headwinds are expected to
impact sales in the first quarter but are expected to subside by
the end of 2014.
Total written business for the
first quarter is expected to increase 2.0%, down from 14% increase
in the same period last year and 6.3% increase in the fourth
quarter of 2013.
However, the company still believes
that the housing market recovery will help increase sales and
market share by the end of 2014. Haverty also has solid store
expansion plans for 2014 to strengthen its presence in key markets
with additional or repositioned stores.
Haverty plans to open six new
locations, including three new relocations, in existing markets and
complete one major expansion during 2014. The company plans to
close two additional stores. At the end of 2014, the store count is
expected to reach 120.
The company is encouraged about the
positive customer response to its enhanced store displays and is
therefore investing heavily in store improvements to better serve
customers. However, sluggish growth in the upcoming quarter remains
a concern.
This retailer witnessed downward
estimate revisions after announcing the soft outlook for the
upcoming quarter. The Zacks Consensus Estimate for 2014 declined
2.6% and that for 2015 went down 2.2% over the last 7 days. Haverty
currently holds a Zacks Rank #3 (Hold).
Other Stocks to
Consider
Better-ranked stocks in the wider
retail sector include Famous Dave's of America
Inc. (DAVE), Jack in the Box Inc. (JACK)
and Brinker International, Inc. (EAT). While
Famous Dave’s and Jack in the Box hold a Zacks Rank #1 (Strong
Buy), Brinker International holds a Zacks Rank #2 (Buy).
FAMOUS DAVES (DAVE): Free Stock Analysis Report
BRINKER INTL (EAT): Free Stock Analysis Report
HAVERTY FURNIT (HVT): Free Stock Analysis Report
JACK IN THE BOX (JACK): Free Stock Analysis Report
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