Sep 19 2026 12:18 PM EST

Haverty Furniture Posts Strong Q2 Earnings, Guides Higher Margins Amid Housing‑Market Uncertainty

Haverty Furniture Companies (NYSE: HVT) posted a 7.7% increase in second‑quarter net sales to $194.9 million, while diluted earnings per share doubled to $0.32. The results, released on August 4, 2026, lifted the stock’s earnings outlook but left investors watching a modest five‑day price decline of 0.2% after the earnings announcement.

Quarterly performance highlights

Comparable‑store sales rose 8.0% year‑over‑year, marking the fourth consecutive quarter of positive comps. Gross profit margin improved to 61.4%, up 60 basis points from the prior year, after accounting for a $1.5 million IEEPA tariff refund. Average ticket increased 14% to over $3,800, driven by a design‑ticket average of more than $8,800. The company generated free cash flow of $8.3 million for the quarter.

Design program and ticket growth underpin margin expansion

The in‑home design service accounted for roughly 35.3%–36.5% of written business, pushing the overall average ticket higher and delivering a mix shift toward higher‑margin categories such as custom upholstery and design‑focused bedding. Design‑ticket average rose 15.7% to exceed $8,800, while special‑order upholstery grew 23.6% year‑over‑year. Private‑label merchandise also contributed modestly higher gross margins versus national brands.

Store expansion and balance‑sheet flexibility

The company operated 129 showrooms at quarter‑end and announced two new openings in Missouri and Tennessee during Q2. Management remains on track to add five more stores and complete one relocation, targeting 133 locations by year‑end, including entry into Pennsylvania. Haverty entered FY 2026 with zero funded debt, cash of $111.0 million, and an undrawn credit facility of $100 million, providing ample liquidity for capital returns and store growth.

Share‑repurchase activity totaled $16.6 million (≈723 k shares) in the first half, and the board authorized an additional $15 million buy‑back program. A quarterly cash dividend of $0.33 per share was declared, delivering an annualized yield near 5.9%.

Macro backdrop and cost pressures

Housing‑turnover activity remains modest, with existing‑home sales growth expected to be low‑single‑digit and mortgage rates lingering in the low‑6% range. These conditions support replacement‑demand for furniture but limit new‑home purchases. Real disposable income showed modest growth in early 2026, helping sustain consumer confidence among higher‑income households that drive Haverty’s design‑focused sales.

Tariff‑related cost pressures were partially offset by the $1.5 million IEEPA refund recorded in Q2. Management noted ongoing uncertainty around Section 232 and Section 301 tariffs, as well as a mid‑August surge in container rates (25‑30% higher) and diesel prices above $5 per gallon, which could affect transportation costs through year‑end.

Guidance and valuation considerations

For FY 2026, management reaffirmed gross‑margin guidance of 60.5%–61.0% and a capital‑expenditure target of approximately $34 million. Fixed and discretionary SG&A is expected to run between $307 million and $309 million. Analyst consensus projects FY 2026 revenue of roughly $804.6 million, implying a 3.1% year‑over‑year increase, and EPS of about $1.83, a 25% rise.

The stock has risen 13.3% over the past three months and 32.5% over six months, but a 0.2% dip in the last five days suggests the market is still calibrating the impact of higher margins against housing‑market headwinds.

Risks and unanswered questions

Key risks include a prolonged slowdown in housing activity, which could curb replacement‑furniture demand, and potential escalation of tariff rates that would pressure gross margins if cost pass‑through is limited. The company’s reliance on the higher‑income segment makes it vulnerable to shifts in discretionary spending among affluent households. Execution risk remains around the timely opening of new stores and the continued scaling of the design program.

Investors will watch upcoming freight‑cost trends, the effectiveness of AI‑driven operational efficiencies, and whether the design‑service penetration can rise above the high‑teens to sustain ticket‑size growth in a modest‑growth macro environment.