ATLANTA – Havertys said its written business for the last two months of its quarter ended June 30 was up 13.9%.
Clarence H. Smith, chairman, president and CEO, said the second quarter “was like no other in our country’s or Havertys’ history,” but he added that “optimism for our future and the opportunities for growth endure.”
He said the company reopened its stores in May “with team members ready to serve customers eager to refresh their homes. Our written business for the last two months of the quarter was up 13.9%, and written comparable store business was up 17.5% compared to the same periods in 2019. Our customers want their homes to reflect their style and be a comfortable, happy place. Our wide merchandise selection, custom options, and free design service assists them in that endeavor.”
Smith said Havertys is analyzing its personnel needs and is currently challenged to accelerate staffing and increase delivery capacity. “Many of our vendor partners are also facing workforce issues as they restart their operations and seek to meet product demand,” he said. “Our inventory position in certain products could be stressed during the coming months as availability lags demand.
“Given the sustained pace of our business since reopening and our liquidity position, the board approved important shareholder actions related to dividends and the stock repurchase program,” he continued. “The per share dividend for the third quarter was increased 25%, restoring it to the first quarter’s amount, and the resumption of the stock repurchase program was approved. The board will continue to evaluate returning value to stockholders given the ongoing uncertainty caused by COVID-19.”
The opening of a new store in the Dallas/Ft. Worth market is on schedule for late August, and as previously planned, the company closed a store in that market in July. Havertys also set a new opening date in the first quarter of 2021 for entering the Myrtle Beach, S.C., market.
Expected capital expenditures for 2020 are $9.2 million, the company said.
Havertys stores were closed March 19, and 103 stores reopened on May 1 and the remaining 17 by June 20. Deliveries were halted on March 21 and restarted on May 5 with less capacity.
The company reported a reduction in salaries and wages of $9.9 million associated with 3,033 furloughed team members for the month of April 2020, and severance costs of $1.7 million for an approximately 35% reduction in workforce effective April 30, 2020.
As previously reported, the company completed a sale-leaseback transaction of three warehouse facilities in May. This transaction generated $69.5 million in net proceeds and a gain of $31.6 million.
The company also reported that its board of directors declared a cash dividend to be paid on the outstanding shares of the company’s two classes of common stock at a rate of 20 cents per share on the common stock and 19 cents per share on the Class A common stock. This restores the rates to the amounts declared prior to the store closures. The dividend is payable on Wednesday, Sept. 9 to stockholders of record at the close of business on Monday, Aug. 24. Havertys has paid a cash dividend in each year since 1935, the company said.
The board also approved resumption of the company’s stock repurchase program which was halted in March. The balance of the current authorization for repurchases is approximately $29.7 million. Shares may be repurchased, at the company’s discretion, from time-to-time in the open market or in privately negotiated transactions.