0001628280-26-031027
SEC filingRevenue and gross margin improved on better product mix, but EPS fell sharply due to higher share count and SG&A growth, while operating cash flow turned negative on inventory build.
Net sales for the first quarter of 2026 were $189.1 million, up 4.1% from $181.6 million in the same period last year. The increase is primarily due to product selection, merchandise pricing and mix, as noted in management's discussion. Despite ongoing industry headwinds including rising consumer debt, constrained housing inventory, tight mortgage credit, and economic uncertainty from tariff policy and geopolitical tensions, the company achieved top-line growth.
Gross profit increased 4.6% to $116.2 million, with gross margin improving to 61.5% from 61.2% in the prior year quarter. The expansion reflects favorable product mix and pricing strategies. Management attributed the improvement to product selection and merchandise pricing and mix.
Management highlighted ongoing industry headwinds: rising consumer debt, constrained housing inventory, tight mortgage credit, and economic uncertainty from tariff policy and geopolitical tensions. However, the company is investing in growth, with plans to open five new stores and relocate one in 2026, including a new market entry in Pittsburgh. The recent invalidation of certain tariffs by the Supreme Court and the launch of a refund system for IEEPA tariffs could provide some relief. Havertys continues to differentiate through its in-house delivery team and free design services, which are driving higher customer engagement and ticket sizes. The key risk to monitor is the pace of inventory normalization and its impact on operating cash flow, as well as the sustainability of gross margin gains amid tariff volatility.