Quarter began poorly but retailer said it turned profit in June

ATLANTA — Full-line retailer Haverty Furniture reported a second-quarter net loss of $1.4 million, or 6 cents per share, as sales for the Top 100 chain dropped 11.3%.

In last year’s second quarter, the chain turned a profit of $3.6 million, or 16 cents per share. Sales in the latest quarter came to $187.1 million, compared with $211 million in 2013’s second quarter. Same-store sales decreased 12.7% in the quarter.
 

President and CEO Clarence H. Smith said, “Severely weak sales volume early in the quarter created a difficult hurdle for us and produced a quarterly loss. We had noted in our May and June sales releases that with double-digit sales declines we would not be profitable. Sales were especially poor in the first half of the quarter, but we were heartened by the improvement in volume and return to profitability for June.
 
“The close management of our merchandise flow and clearance activity resulted in a reduction in inventory of $15.5 million, or 13.1%, as compared to year-ago levels. The increased clearance sales contributed to a 64 basis-point reduction in gross profit margins versus the second quarter of last year,” he said.
 
In the six months, Havertys net loss was $520,000, or 2 cents per share, versus net income of $8.7 million, or 38 cents per share, in the comparable 2013 period.
 
“The second quarter is typically the weakest of the year for Havertys,” Smith said. “We expect to return to profitability in the second half as fixed expenses are leveraged with the seasonally higher sales volume anticipated.”
 
Havertys has 122 stores in 17 states in the South and Midwest, and ranked No. 10 on Furniture/Today’s latest listing of Top 100 U.S. Furniture Stores.