UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___

Commission file number: 1-14445

HAVERTY FURNITURE COMPANIES, INC.

(Exact name of registrant as specified in its charter)

Maryland	58-0281900
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
780 Johnson Ferry Road, Suite 800 Atlanta, Georgia	30342
(Address of principal executive offices)	(Zip Code)
(404) 443-2900
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	HVT	NYSE
Class A Common Stock	HVTA	NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	x	Non-accelerated filer	o
Smaller reporting company	o	Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The numbers of shares outstanding of the registrant’s two classes of $1 par value common stock as of May 3, 2024, were: Common Stock – 14,960,842; Class A Common Stock – 1,275,395.

HAVERTY FURNITURE COMPANIES, INC.

INDEX

		Page No.
PART I.	FINANCIAL INFORMATION
	Item 1. Financial Statements
	Condensed Consolidated Balance Sheets – March 31, 2024 (unaudited) and December 31, 2023	1
	Condensed Consolidated Statements of Comprehensive Income – Three Months Ended March 31, 2024 and 2023 (unaudited)	2
	Condensed Consolidated Statements of Cash Flows – Three Months Ended March 31, 2024 and 2023 (unaudited)	3
	Notes to Condensed Consolidated Financial Statements (unaudited)	4
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
	Item 3. Quantitative and Qualitative Disclosures about Market Risk	14
	Item 4. Controls and Procedures	14
PART II.	OTHER INFORMATION
	Item 1. Legal Proceedings	15
	Item 1A. Risk Factors	15
	Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	15
	Item 5. Other Information	15
	Item 6. Exhibits	16

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)	March 31, 2024		December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	111,818	$	120,635
Restricted cash and cash equivalents	6,045		7,142
Inventories	92,078		93,956
Prepaid expenses	17,361		17,067
Other current assets	13,697		12,793
Total current assets	240,999		251,593
Property and equipment, net	173,128		171,588
Right-of-use lease assets	196,976		202,306
Deferred income taxes	15,594		15,641
Other assets	13,832		13,005
Total assets	$	640,529	$	654,133
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	16,980	$	18,781
Customer deposits	40,912		35,837
Accrued liabilities	35,681		46,289
Current lease liabilities	37,572		37,357
Total current liabilities	131,145		138,264
Noncurrent lease liabilities	174,680		180,397
Other liabilities	28,014		27,106
Total liabilities	333,839		345,767
Stockholders’ equity
Capital Stock, par value $1 per share
Preferred Stock, Authorized – 1,000 shares; Issued: None
Common Stock, Authorized – 50,000 shares; Issued: 2024 – 30,316; 2023 – 30,220	30,316		30,220
Convertible Class A Common Stock, Authorized – 15,000 shares; Issued: 2024 – 1,798; 2023 – 1,804	1,798		1,804
Additional paid-in capital	113,993		113,307
Retained earnings	417,020		419,472
Accumulated other comprehensive loss	(983)		(983)
Less treasury stock at cost – Common Stock (2024 – 15,355 and 2023 – 15,355 shares) and Convertible Class A Common Stock (2024 and 2023 – 522 shares)	(255,454)		(255,454)
Total stockholders’ equity	306,690		308,366
Total liabilities and stockholders’ equity	$	640,529	$	654,133

See notes to these condensed consolidated financial statements.

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HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands, except per share data)	Three Months Ended March 31,
	2024		2023
Net sales	$	183,997	$	224,754
Cost of goods sold	72,978		91,969
Gross profit	111,019		132,785
Expenses:
Selling, general and administrative	109,356		118,361
Other expense (income), net	23		(4)
Total expenses	109,379		118,357
Income before interest and income taxes	1,640		14,428
Interest income, net	1,555		1,010
Income before income taxes	3,195		15,438
Income tax expense	802		3,066
Net income	$	2,393	$	12,372
Other comprehensive income	—		—
Comprehensive income	$	2,393	$	12,372
Basic earnings per share:
Common Stock	$	0.15	$	0.77
Class A Common Stock	$	0.13	$	0.72
Diluted earnings per share:
Common Stock	$	0.14	$	0.74
Class A Common Stock	$	0.13	$	0.71
Cash dividends per share:
Common Stock	$	0.30	$	0.28
Class A Common Stock	$	0.28	$	0.26

See notes to these condensed consolidated financial statements.

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HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)	Three Months Ended March 31,
	2024		2023
Cash Flows from Operating Activities:
Net income	$	2,393	$	12,372
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,946		4,362
Share-based compensation expense	2,643		1,957
Other	58		(840)
Changes in operating assets and liabilities:
Inventories	1,878		4,079
Customer deposits	5,075		(1,587)
Other assets and liabilities	(1,104)		5,721
Accounts payable and accrued liabilities	(12,754)		(14,990)
Net cash provided by operating activities	3,135		11,074
Cash Flows from Investing Activities:
Capital expenditures	(6,399)		(6,655)
Proceeds from sale of land, property and equipment	48		13
Net cash used in investing activities	(6,351)		(6,642)
Cash Flows from Financing Activities:
Dividends paid	(4,845)		(4,528)
Taxes on vested restricted shares	(1,853)		(2,788)
Net cash used in financing activities	(6,698)		(7,316)
Decrease in cash, cash equivalents and restricted cash equivalents during the period	(9,914)		(2,884)
Cash, cash equivalents and restricted cash equivalents at beginning of period	127,777		129,930
Cash, cash equivalents and restricted cash equivalents at end of period	$	117,863	$	127,046

See notes to these condensed consolidated financial statements.

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HAVERTY FURNITURE COMPANIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE A - Business and Basis of Presentation

Haverty Furniture Companies, Inc. (“Havertys,” “the Company,” “we,” “our,” or “us”) is a retailer of a broad line of residential furniture in the middle to upper-middle price ranges. We operate all of our stores using the Havertys brand and do not franchise our concept. We operate within a single reportable segment. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes required by United States of America generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The Company believes that the disclosures made are adequate to make the information not misleading. The financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. We believe all adjustments, normal and recurring in nature, considered necessary for a fair presentation have been included. We suggest that these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in our latest Annual Report on Form 10-K.

The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results could differ from those estimates.

The Company is subject to various claims and legal proceedings covering a wide range of matters, including with respect to product liability and personal injury claims, that arise in the ordinary course of its business activities. We currently have no pending claims or legal proceedings that we believe would be reasonably likely to have a material adverse effect on our financial condition, results of operations or cash flows. However, there can be no assurance that either future litigation or an unfavorable outcome in existing claims will not have a material impact on our business, reputation, financial position, cash flows or results of operations.

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NOTE B – Stockholders’ Equity

The following outlines the changes in each caption of stockholders’ equity for the current and comparative period and the dividends per share for each class of shares.

For the three months ended March 31, 2024:

(in thousands)	Common Stock		Class A Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total
Balances at December 31, 2023	$	30,220	$	1,804	$	113,307	$	419,472	$	(983)	$	(255,454)	$	308,366
Net income							2,393						2,393
Dividends declared:
Common Stock, $0.30 per share							(4,488)						(4,488)
Class A Common Stock, $0.28 per share							(357)						(357)
Class A conversion	6		(6)										—
Restricted stock issuances	90				(1,957)								(1,867)
Amortization of restricted stock					2,643								2,643
Balances at March 31, 2024	$	30,316	$	1,798	$	113,993	$	417,020	$	(983)	$	(255,454)	$	306,690

For the three months ended March 31, 2023:

(in thousands)	Common Stock		Class A Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total
Balances at December 31, 2022	$	30,006	$	1,806	$	108,706	$	398,393	$	(756)	$	(248,756)	$	289,399
Net income							12,372						12,372
Dividends declared:
Common Stock, $0.28 per share							(4,194)						(4,194)
Class A Common Stock, $0.26 per share							(334)						(334)
Restricted stock issuances	116				(2,904)								(2,788)
Amortization of restricted stock					1,957								1,957
Balances at March 31, 2023	$	30,122	$	1,806	$	107,759	$	406,237	$	(756)	$	(248,756)	$	296,412

NOTE C – Interim LIFO Calculations

Inventories are measured using the last-in, first-out (LIFO) method of valuation using an annual LIFO index. Accordingly, interim LIFO calculations must necessarily be based on management’s estimates of the components of the calculation including year-end inventory levels and the expected rate of inflation or deflation for the year. Since these estimates may be affected by factors beyond management’s control, interim results are subject to change based upon the final year-end LIFO inventory valuation.

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NOTE D – Fair Value of Financial Instruments

The fair values of our cash and cash equivalents, restricted cash and cash equivalents, accounts payable and customer deposits approximate their carrying values due to their short-term nature. The assets related to our self-directed, non-qualified deferred compensation plans for certain executives and employees are valued using quoted market prices multiplied by the number of shares held, a Level 1 valuation technique.

NOTE E – Credit Agreement

We have an $80.0 million revolving credit facility (the “Credit Agreement”) secured primarily by our inventory and maturing on October 24, 2027. Availability fluctuates based on a borrowing base calculation reduced by outstanding letters of credit.

At March 31, 2024 and December 31, 2023, there were no outstanding borrowings under the Credit Agreement. The borrowing base was $121.1 million at March 31, 2024 and there were no outstanding letters of credit and, accordingly, net availability was $80.0 million.

NOTE F – Revenues

We recognize revenue from merchandise sales and related service fees, net of expected returns and sales tax, at the time the merchandise is delivered to the customer. We record customer deposits when payments are received in advance of the delivery of merchandise. Such deposits totaled $40.9 million and $35.8 million at March 31, 2024 and December 31, 2023, respectively. Of the customer deposit liabilities at December 31, 2023, approximately $2.3 million have not been recognized through net sales in the three months ended March 31, 2024.

The following table presents our revenues disaggregated by each major product category and service:

(In thousands)	Three Months Ended March 31,
	2024				2023
	Net Sales		% of Net Sales		Net Sales		% of Net Sales
Merchandise:
Case Goods
Bedroom Furniture	$	25,862	14.1	%	$	34,546	15.4	%
Dining Room Furniture	19,016		10.3		25,586		11.4
Occasional	14,207		7.7		19,210		8.5
	59,085		32.1		79,342		35.3
Upholstery	82,935		45.1		95,846		42.6
Mattresses	16,600		9.0		18,411		8.2
Accessories and Other (1)	25,377		13.8		31,155		13.9
	$	183,997	100.0	%	$	224,754	100.0	%

(1) Includes delivery charges and product protection.

NOTE G – Leases

We have operating leases for retail stores, offices, warehouses, and certain equipment. Our leases have remaining lease terms of 1 year to 11 years, some of which include options to extend the leases for up to 20 years. We determine if an arrangement is or contains a lease at lease inception. Our leases do not have any residual value guarantees or any restrictions or covenants imposed by lessors. We have lease agreements for real estate with lease and non-lease components, which are accounted for separately.

Certain of our lease agreements for retail stores include variable lease payments, generally based on sales volume. The variable portions of payments are not included in the initial measurement of the right-of-use asset or lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. Certain of our equipment lease agreements include variable lease costs, generally based on usage of the underlying asset (mileage, fuel, etc.). The variable portions of payments are not included in the

6

initial measurement of the right-of-use asset or lease liability due to uncertainty of the payment amount and are recorded in the period incurred.

At March 31, 2024, we had entered into two leases for additional retail locations which had not yet commenced.

Lease expense is charged to selling, general and administrative expenses. Components of lease expense were as follows (in thousands):

	Three Months Ended March 31,
	2024		2023
Operating lease cost	$	12,244	$	11,787
Variable lease cost	1,374		1,696
Total lease expense	$	13,618	$	13,483

Supplemental cash flow information related to leases is as follows (in thousands):

	Three Months Ended March 31,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12,401	$	11,311
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	3,709	$	9,048

NOTE H – Income Taxes

Our effective tax rate for the three months ended March 31, 2024 and 2023 was 25.1% and 19.9%, respectively. The primary difference in the effective rate and the statutory rate was due to state income taxes and the impact from vested stock awards.

7

NOTE I – Stock-Based Compensation Plans

As more fully discussed in Note 12 of the notes to the consolidated financial statements in our 2023 Annual Report on Form 10-K, we have awards outstanding for Common Stock under stock-based employee compensation plans.

The following table summarizes our award activity during the three months ended March 31, 2024:

	Service-Based Restricted Stock Awards			Performance-Based Restricted Stock Awards
	Shares or Units (#)	Weighted-Average Award Price ($)		Shares or Units (#)	Weighted-Average Award Price ($)
Outstanding at December 31, 2023	249,935	$	32.05	353,187	$	31.77
Granted/Issued	160,155	34.73		121,824	34.73
Awards vested or rights exercised(1)	—	—		(145,104)	32.84
Forfeited	(450)	33.02		—	—
Additional units earned due to performance	—	—		(25,550)	33.08
Outstanding at March 31, 2024	409,640	$	33.10	304,357	$	32.33
Restricted units expected to vest	409,640	$	33.10	275,680	$	32.08

(1) Includes shares repurchased from employees for employee’s tax liability.

The aggregate intrinsic value of outstanding service-based restricted stock awards was approximately $14.0 million at March 31, 2024. The restrictions on the service-based awards generally lapse or vest annually, primarily over one-year and three-year periods.

The total fair value of performance-based restricted stock awards that vested during the three months ended March 31, 2024 was approximately $4.9 million. The aggregate intrinsic value of outstanding performance awards at March 31, 2024 expected to vest was approximately $9.4 million. The performance awards are based on one-year performance periods but cliff vest in approximately three years from grant date.

The compensation for all awards is charged to selling, general and administrative expenses over the respective grants’ vesting periods, primarily on a straight-line basis. The amount charged was approximately $2.6 and $2.0 million for the three months ended March 31, 2024 and 2023, respectively. Forfeitures are recognized as they occur. As of March 31, 2024, the total compensation cost related to unvested equity awards was approximately $12.7 million and is expected to be recognized over a weighted-average period of two years.

8

NOTE J – Earnings Per Share

We report our earnings per share using the two-class method. The income per share for each class of common stock is calculated assuming 100% of our earnings are distributed as dividends to each class of common stock based on the contractual rights of the classes.

The Common Stock of the Company has a preferential dividend rate of at least 105% of the dividend paid on the Class A Common Stock. Holders of the Class A Common Stock have greater voting rights which include voting as a separate class for the election of up to 75% of the total number of directors whereas holders of the Common Stock vote as a separate class for the election of at least 25% of the total number of directors. On all other matters subject to shareholder vote, holders of the Class A Common Stock have ten votes per share as opposed to holders of the Common Stock receiving one vote per share. Class A Common Stock may be converted at any time on a one-for-one basis into Common Stock at the option of the holder of the Class A Common Stock.

	Three Months Ended March 31,
	2024		2023
Numerator:
Common:
Distributed earnings	$	4,488	$	4,195
Undistributed earnings	(2,267)		7,250
Basic	2,221		11,445
Class A Common earnings	172		927
Diluted	$	2,393	$	12,372
Class A Common:
Distributed earnings	$	357	$	333
Undistributed earnings	(185)		594
	$	172	$	927
Denominator:
Common:
Weighted average shares outstanding - basic	14,899		14,907
Assumed conversion of Class A Common Stock	1,280		1,283
Dilutive options, awards and common stock equivalents	542		594
Total weighted-average diluted Common Stock	16,721		16,784
Class A Common:
Weighted average shares outstanding	1,280		1,283
Basic earnings per share:
Common Stock	$	0.15	$	0.77
Class A Common Stock	$	0.13	$	0.72
Diluted earnings per share:
Common Stock	$	0.14	$	0.74
Class A Common Stock	$	0.13	$	0.71

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NOTE K - Subsequent Dividend Declaration

On May 1, 2024, our board of directors declared a quarterly cash dividend of $0.32 on our common stock and $0.30 on our Class A common stock (aggregating approximately $5.2 million), payable on June 14, 2024 to stockholders of record on May 24, 2024.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes contained herein and with the audited consolidated financial statements, accompanying notes, related information and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023 (“Form 10-K”).

Forward-Looking Statements

Statements in this Quarterly Report on Form 10-Q (the "Form 10-Q") and the schedules hereto that are not purely historical facts or that necessarily depend on future events, including statements about our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on forward-looking statements. In addition, oral statements made by our directors, officers, and employees to the investor and analyst communities, media representatives and others, depending upon their nature, may also constitute forward-looking statements. All forward-looking statements are based upon currently available information and the Company's current assumptions, expectations, and projections about future events. Forward-looking statements are by nature inherently uncertain and involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. Known material risk factors applicable to us that could cause our actual results to differ from these forward-looking statements are described in "Item 1A. Risk Factors" of our Form 10-K and in the subsequent reports we file with the Securities and Exchange Commission. Consequently, all forward-looking statements in this report are qualified by the factors, risks and uncertainties contained therein. All forward‑looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report except as required by law.

Net Sales

Our sales are generated by customer purchases of home furnishings. Revenue is recognized upon delivery to the customer. Comparable-store or “comp-store” sales is a measure which indicates the performance of our existing stores and website by comparing the growth in sales in store and online for a particular month over the corresponding month in the prior year. Stores are considered non-comparable if they were not open during the corresponding month in the prior year or if the selling square footage has been changed significantly. The method we use to compute comp-store sales may not be the same method used by other retailers. We record our sales when the merchandise is delivered to the customer. We also track “written sales” and “written comp-store sales,” which represent customer orders prior to delivery. As a retailer, comp-store sales and written comp-store sales are an indicator of relative customer spending and store performance. Comp-store sales, total written sales and written comp-store sales are intended only as supplemental information and none are substitutes for net sales presented in accordance with U.S. GAAP.

The following table outlines our sales and comp-store sales increases and decreases for the periods indicated:

	2024										2023
	Net Sales						Comp-Store Sales				Net Sales						Comp-Store Sales
Period	Total  Dollars		%  Change		$ Change		%  Change		$ Change		Total  Dollars		%  Change		$ Change		%  Change		$ Change
Q1	$	184.0	(18.1)	%	$	(40.8)	(18.5)	%	$	(41.4)	$	224.8	(5.9)	%	$	(14.2)	(6.7)	%	$	(16.0)

Total sales for the first quarter of 2024 decreased $40.8 million, or 18.1%, compared to the same period in 2023. Our comp-store sales decreased 18.5% or $41.4 million, in the first quarter of 2024 compared to the same period in 2023.

Continued inflationary pressures and economic uncertainty has had a negative effect on discretionary spending. Demand for home furnishings rose rapidly during the COVID years as consumers redecorated their homes and outfitted home offices, pulling forward sales that are now normalizing. Rising interest rates have also exacerbated the small supply of homes available for sale and further weakened the housing market, which has a negative impact on demand for furniture. Written business for the first quarter of 2024 compared to the first quarter of 2023 was down 12.6% and written comp-store sales were down 13.0%.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our free in-home design service is being used by more customers. Designers helped drive 32.3% of our total written business for the first quarter of 2024 compared to 26.0% for the same period in 2023.

Gross Profit

Gross profit for the first quarter of 2024 was 60.3%, up 120 basis points compared to the prior year period of 59.1%. The increase is primarily due to product selection and merchandising mix.

We expect annual gross profit margins for 2024 will be 60.0% to 60.5%. This is a 50 basis points increase from our previous estimate based on our current merchandise mix and anticipated changes in product and freight costs and their impact on our LIFO reserve. Gross profit margins fluctuate quarter to quarter in relation to our promotional cadence.

Substantially all of our occupancy and home delivery costs are included in selling, general and administrative expenses (“SG&A”), as are a portion of our warehousing expenses. Accordingly, our gross profit may not be comparable to those entities that include these costs in cost of goods sold.

Selling, General and Administrative Expenses

Our SG&A costs as a percent of sales for the first quarter of 2024 were 59.4% versus 52.7% for the same period in 2023 largely as a result of decreased sales. SG&A dollars decreased $9.0 million, or 7.6%, for the first quarter of 2024 compared to the same prior year period. The change is driven by lower costs in selling expense of $4.8 million, warehouse and delivery costs of $3.2 million, and advertising costs of $0.6 million.

We classify our SG&A expenses as either variable or fixed and discretionary. Our variable expenses include the costs in the selling and delivery categories and certain warehouse and distribution expenses, as these amounts will generally move in tandem with our level of sales. The remaining categories and expenses for occupancy, advertising, and administrative costs are classified as fixed and discretionary because these costs do not fluctuate with sales.

The following table outlines our SG&A expenses by classification:

(In thousands)	Three Months Ended March 31,
	2024				2023
	$		% of Net Sales		$		% of Net Sales
Variable	$	36,986	20.1	%	$	44,867	20.0	%
Fixed and discretionary	72,370		39.3	%	73,494		32.7	%
	$	109,356	59.4	%	$	118,361	52.7	%

The variable expenses in dollars were lower in the first quarter of 2024 compared to the same period in 2023, primarily due to the decrease in commission expense and third-party credit costs.

Fixed and discretionary expenses were impacted in the first quarter of 2024 primarily by decreases in advertising expenses, warehouse costs, and administrative expenses compared to the prior year quarter.

Our variable expenses within SG&A for the full year of 2024 are anticipated to be 19.9% to 20.2%. Fixed and discretionary expenses are expected to be to approximately $290.0 to $292.0 million for the full year of 2024, a decrease of $5.0 million from our previous guidance based on changes in our marketing spend and other costs.

Liquidity and Capital Resources

Cash and Cash Equivalents at End of Year

At March 31, 2024, we had $111.8 million in cash and cash equivalents, and $6.0 million in restricted cash equivalents. We believe that our current cash position, cash flow generated from operations, funds available from our credit agreement, and access to the long-term debt capital markets should be sufficient for our

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

operating requirements and to enable us to fund our capital expenditures, dividend payments, and lease obligations through the next several years. In addition, we believe we have the ability to obtain alternative sources of financing, if needed.

Long-Term Debt

In October 2022, we entered into the Fourth Amendment to our Amended and Restated Credit Agreement (as amended, the “Credit Agreement”) with Truist Bank. The Credit Agreement, which matures October 24, 2027, provides for a $80.0 million revolving credit facility. The borrowing base at March 31, 2024 was $121.1 million and the net availability was $80.0 million.

Leases

We lease a portion of our real estate, including our stores, distribution centers, and store support space, pursuant to operating leases.

Cash Flows Summary

Operating Activities. Cash flow generated from operations provides us with a significant source of liquidity. Our operating cash flows result primarily from cash received from our customers, offset by cash payments we make for products and services, employee compensation, operations, and occupancy costs.

Cash provided by or used in operating activities is also subject to changes in working capital. Working capital at any specific point in time is subject to many variables, including seasonality, inventory selection, the timing of cash receipts and payments, and vendor payment terms.

Net cash provided by operating activities was $3.1 million in the first three months of 2024 compared to $11.1 million during the same period in 2023. This difference resulted primarily from changes in working capital and a decrease in net income. Working capital was impacted by more normalized levels of inventories and customer deposits in 2024, as compared against the reduction of the backlog in 2023 and an increase in other liabilities.

Investing Activities. Cash used in investing activities decreased by $0.3 million in the first three months of 2024 compared to the first three months of 2023, due to capital expenditure spend.

Financing Activities. Cash used in financing activities decreased by $0.6 million in the first three months of 2024 compared to the first three months of 2023, due to lower shares withheld for taxes in 2024 compared to 2023.

Store Plans and Capital Expenditures

Location or Market	Opening Quarter Actual or Planned	Category
Memphis, TN	Q-1-24	Open
Pine Bluff, AR	Q-1-24	Closure
Destin, FL	Q-2-24	Open
Tampa, FL	Q-3-24	Open
Miami, FL	Q-3-24	Open
Houston, TX	Q-4-24	Open

Assuming the new stores open as planned, the above activity and other changes are expected to increase net selling space at the end of 2024 by approximately 3.4% over net selling space at the end of 2023.

Total capital expenditures for the full year of 2024 are estimated to be $32.0 million depending on the timing of spending for our capital projects.

Critical Accounting Estimates

Critical accounting estimates are those that we believe are both significant and that require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates,

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

and we might obtain different estimates if we used different assumptions or conditions. We reviewed our accounting estimates, and none were deemed to be considered critical for the accounting periods presented in our Form 10-K. We had no significant changes in those accounting estimates since our last annual report.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures about market risk, see "Item 7A. Quantitative and Qualitative Disclosures About Market Risk,” of our Form 10-K. Our exposure to market risk has not changed materially since December 31, 2023.

Item 4.    Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, our management, including the CEO and CFO, concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report and provide reasonable assurance that information required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate, to allow timely decisions regarding disclosure.

There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13a-15 that occurred during the Company’s fiscal quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. We have reviewed our financial reporting process to provide reasonable assurance that we could report our financial results accurately and timely, and we will continue to evaluate the impact of any related changes to our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

Information regarding legal proceedings is described under the subheading “Business and Basis of Presentation” in Note A of the Notes to the Condensed Consolidated Financial Statements set forth in this Form 10-Q.

Item 1A.    Risk Factors

"Item 1A. Risk Factors” in our Form 10-K includes a discussion of our known material risk factors. There have been no material changes from the risk factors described in our Form 10-K.

Item 2.    Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

The board of directors has authorized management, at its discretion, to purchase and retire limited amounts of our Common Stock and Class A Common Stock. A program was initially approved by the board on November 3, 1986. On August 5, 2022, the board authorized additional amounts under such stock repurchase program. The stock repurchase program has no expiration date but may be terminated by our board at any time.

There were no repurchases of Havertys’ common stock during the first quarter of 2024. As of March 31, 2024, the approximate dollar value of shares that may yet be purchased under the program was $13.1 million.

Item 5.    Other Information

During the three months ended March 31, 2024, none of our directors or officers adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

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Item 6.    Exhibits

(a)Exhibits

The exhibits listed below are filed with or incorporated by reference into this report (those filed with this report are denoted by an asterisk). Unless otherwise indicated, the exhibit number of documents incorporated by reference corresponds to the exhibit number in the referenced documents.

Exhibit Number	Description of Exhibit (Commission File No. 1-14445)
3.1	Articles of Amendment and Restatement of the Charter of Haverty Furniture Companies, Inc. effective May 26, 2006 (Exhibit 3.1 to our Second Quarter 2006 Form 10-Q).
3.2	By-laws of Haverty Furniture Companies, Inc. as amended and restated effective February 24, 2023 (Exhibit 3.2 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022).
*31.1	Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as amended.
*31.2	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as amended.
**32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101	The following financial statements from Haverty Furniture Companies, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in inline XBRL, include: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Statements of Cash Flows and (iv) the Notes to Condensed Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

*    Filed herewith.

**    Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		HAVERTY FURNITURE COMPANIES, INC. (Registrant)
Date: May 7, 2024	By:	/s/ Clarence H. Smith
		Clarence H. Smith Chairman of the Board and Chief Executive Officer (principal executive officer)
	By:	/s/ Richard B. Hare
		Richard B. Hare Executive Vice President and Chief Financial Officer (principal financial and accounting officer)