Haverty Furniture Companies (NYSE:HVT) reported fourth-quarter and full-year 2025 results that showed improving comparable-store sales trends, while management highlighted continued uncertainty around tariffs and outlined plans for new store openings and increased capital spending in 2026.
Fourth-quarter sales rise as comps stay positive
President and CEO Steven Burdette said the company delivered its second consecutive quarter of positive comparable-store sales, with increases in both written and delivered comps. Fourth-quarter net sales were $201.9 million, up 9.5%, with comparable-store sales up 8.2%. Total written sales increased 3.5%, with written comps up 3.2%.
Margins and earnings reflect LIFO and operating leverage
Gross margin in the fourth quarter was 60.4%, down from 61.9% a year earlier. The company recorded $3.9 million in LIFO charges in the quarter, compared with a $925,000 LIFO pickup in the prior-year quarter. CFO Richard Hare said that excluding LIFO impacts, adjusted gross margin increased 100 basis points to 62.4% from 61.4%.
Selling, general and administrative expenses rose $6.6 million, or 6.3%, to $112.5 million, but improved as a percentage of sales to 55.7% from 57.4% due to higher sales volume. Hare attributed the increase in expenses to higher selling, occupancy, and administrative costs.
Pre-tax income for the quarter increased to $10.8 million (a 5.3% operating margin) from $9.6 million (a 5.2% operating margin). Net income was $8.5 million, or $0.51 per diluted share, versus $8.2 million, or $0.49 per share a year ago. Interest income was about $1.2 million in the quarter, and the company reported other income/expense of $29,000. Hare said the company’s effective tax rate for 2025 was 26.5%.
Average ticket grows; design and e-commerce contribute
Burdette said the company was encouraged by post-Thanksgiving performance, including higher ticket sizes. For the fourth quarter, average ticket increased 10.9% to $3,759, while design average ticket increased 11.9% to $8,072. Design represented 33.3% of sales, supported by upholstery special orders that rose 14.8%.
Traffic, however, softened as the quarter progressed, ending down in the low single digits for the quarter overall, and conversion was “slightly down,” Burdette said. For full-year 2025, written business rose 2.8% with comp sales up 0.7%, average ticket increased 4.7% to $3,530, and designer average ticket increased 9.7% to $7,781. The company said full-year traffic was up in the mid-single digits, with conversion continuing to improve.
On the digital side, Burdette said web traffic and key site engagement increased double digits year-over-year, contributing to in-store performance, and written e-commerce sales increased 12.3% in the quarter.
Tariffs, inventory positioning, and 2026 outlook
Management spent significant time discussing tariffs and how recent developments may affect the business. Burdette said the company built inventory in the fourth quarter to get ahead of tariff changes and expects inventory levels to decline over the next six months. Year-end inventory totaled $96.2 million, up $12.7 million from the prior year.
Burdette also described multiple tariff-related updates, including a late-December delay of an additional 5% tariff on certain upholstered wood furniture under Section 232 (keeping it at 25%), and said the Supreme Court ruled IEEPA tariffs illegal. He added that, effective at 12:01 a.m. the day of the call, the administration issued a 10% worldwide tariff through Section 122 of the 1974 Trade Act, which management said would replace IEEPA and fentanyl tariffs. Burdette said the Section 122 tariffs are not stackable on Section 232 tariffs or applicable under USMCA, but are stackable with Section 301 tariffs.
When asked about potential pricing actions, Burdette said the company would be “thoughtful and deliberate,” noting current inventories already reflect prior tariff costs and that management wants to see how the situation evolves.
Hare said 2026 guidance includes the impact of newly announced tariffs, and the company will continue monitoring developments. The company provided the following expectations for 2026:
- Gross margin: 60.5% to 61%, reflecting estimates for product costs, freight, and LIFO
- Fixed and discretionary SG&A: $307 million to $309 million, driven primarily by store growth and modest inflation
- Variable SG&A: 18.6% to 18.8%, with pressure expected from selling costs (including higher commissions) and potential third-party credit costs
- CapEx: $33.5 million, including $27.2 million for new/replacement stores, remodels, and expansions; $3.2 million for distribution; and about $3.1 million for IT
- Effective tax rate: approximately 26%, excluding stock award vesting impacts and potential new tax legislation
Store growth plans, closures, and capital allocation
The company ended 2025 with 129 stores and said it plans to open five new stores in 2026. Four had already been announced in St. Louis, Nashville, and two in Houston. Burdette also said Havertys plans to enter Pennsylvania—its 18th state—with a store expected to open in the fourth quarter in North Pittsburgh across from Ross Township Mall. The company said it is negotiating leases on additional locations that could be announced by the next quarterly call.
Havertys also said it will close its Alexandria, Louisiana, store in March, citing demographic shifts, stagnant housing growth, and the need for a major remodel. Burdette said the company’s existing distribution network can support store growth without new investments.
In capital allocation updates, Hare said the company finished the quarter with $125.3 million in cash and cash equivalents and no funded debt. The company spent $4.4 million on CapEx in the fourth quarter and $19.7 million for the year, paid $5.3 million in dividends during the quarter and $20.8 million for the year, and repurchased $2.8 million of stock in the quarter at an average price of $22.63. For the year, repurchases totaled $4.8 million, representing 216,482 shares. On Feb. 20, 2026, the board approved an additional $15 million for repurchases, and the company said it had about $18.3 million remaining under existing authorization.
On marketing, management said spend was down slightly as a percentage of sales in the quarter due to leverage from higher sales. Burdette said advertising increased by about $4 million in 2025 after being cut too much in 2024, and the company expects 2026 marketing spend to be flat with 2025.
About Haverty Furniture Companies (NYSE:HVT)
Haverty Furniture Companies, Inc operates as a specialty retailer of residential furniture and home décor in the United States. Founded in 1885 by J.J. Haverty and headquartered in Atlanta, Georgia, the company offers a broad assortment of upholstered furniture, case goods, mattresses, area rugs and decorative accessories. Customers can shop through a network of company-owned showrooms as well as an e-commerce platform, supported by in-house design services, delivery options and consumer financing programs.
Over more than a century of operation, Havertys has expanded its presence primarily across the Southeast and select markets beyond.
