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What changed in HAVERTY FURNITURE COMPANIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of HAVERTY FURNITURE COMPANIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+138 added−133 removedSource: 10-K (2025-03-06) vs 10-K (2024-03-07)

Top changes in HAVERTY FURNITURE COMPANIES INC's 2024 10-K

138 paragraphs added · 133 removed · 112 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

30 edited+11 added−7 removed16 unchanged
Biggest changeThere has been growth in the e‑commerce channel both from internet only retailers, from start-up furniture retailers and larger more established retailers, and those with a brick-and-mortar presence. The degree and sources of brick-and-mortar retail competition varies by geographic area. We compete with numerous individual retail furniture stores as well as national and regional chains.
Biggest changeMass merchants, certain department stores, and some electronics and appliance retailers also have limited furniture product offerings. We also face competition in the e-commerce channel from internet-only retailers, start-up furniture retailers, and larger, more established retailers, including those with a brick-and-mortar presence.
Our brand recognition is very high in the markets we serve, and consumer surveys indicate Havertys is associated with a high level of quality, fashion, value, and service. Customers Havertys customers are typically well-educated women in middle to upper-to-middle income households. They generally own homes in the suburbs, and their diverse personalities are reflected in their unique sense of style.
Our brand recognition is very high in the markets we serve, and consumer surveys indicate Havertys is associated with a high level of quality, fashion, value, and service. Customers Havertys customers are typically well-educated women in middle to upper-middle income households. They generally own homes in the suburbs, and their diverse personalities are reflected in their unique sense of style.
Distribution We believe that our distribution and delivery system is one of the best in the retail furniture industry and provides us with a significant competitive advantage. Our distribution system uses a combination of three distribution centers (“DCs”) and four home delivery centers (“HDCs”). The DCs receive both domestic product and containers of imported merchandise.
Distribution We believe our distribution and delivery system is one of the best in the retail furniture industry and provides us with a significant competitive advantage. Our distribution and delivery system uses a combination of three distribution centers (“DCs”) and four home delivery centers (“HDCs”). The DCs receive both domestic product and containers of imported merchandise.
None of our team members is a party to a union contract. 3 Table of Contents Health and Safety We care about our teammates, customers, and the communities we serve. We believe a hazard-free environment is a critical enabler for the success of our business.
None of our team members is a party to a union contract. 4 Table of Contents Health and Safety We care about our teammates, customers, and the communities we serve. We believe a hazard-free environment is a critical enabler for the success of our business.
We believe Havertys is uniquely positioned in the marketplace, with a targeted mix of merchandise that appeals to customers who are somewhat more affluent than those of promotional price-oriented furniture stores. Our online presence provides most elements of a seamless, omni-channel approach that many of our competitors do not have or cannot replicate.
We believe Havertys is uniquely positioned in the marketplace, with a targeted mix of merchandise that appeals to customers who are somewhat more affluent than those of promotional price-oriented furniture stores. Our online presence provides most elements of a seamless, interconnected approach that many of our competitors do not have or cannot replicate.
These consumers research and shop online and in-store, often engaging friends or family members in the purchasing process. They are discerning buyers, desiring furnishings that fit their style, but never sacrificing quality. Our marketing, merchandising, stores, online presence, and customer service are targeted to attract and meet the needs of our distinctive customers.
These consumers research and shop online and in-store, often engaging friends or family members in the purchasing process. They are discerning buyers, desiring furnishings that fit their style, but never sacrifice quality or value. Our marketing, merchandising, stores, online presence, and customer service are targeted to attract and meet the needs of our distinctive customers.
In 2023, Havertys team members consumed approximately 93,000 hours of learning. We also offer the opportunity for team members to pursue degree programs, professional certificates, and individual courses in strategic fields of study through our tuition reimbursement program. Competition The retail sale of home furnishings is a highly fragmented and competitive business.
In 2024, Havertys team members consumed approximately 117,000 hours of learning. We also offer the opportunity for team members to pursue degree programs, professional certificates, and individual courses in strategic fields of study through our tuition reimbursement program. Competition The retail sale of home furnishings is a highly fragmented and competitive business.
As an added convenience to our customers, we offer financing by third-party finance companies. Sales financed by the third-party providers are not Havertys’ receivables; accordingly, we do not have any credit risk or servicing responsibility for these accounts, and there is no credit or collection recourse to Havertys. Slightly less than one-third of our sales are third-party-financed.
Sales financed by the third-party providers are not Havertys’ receivables; accordingly, we do not have any credit risk or servicing responsibility for these accounts, and there is no credit or collection recourse to Havertys. Slightly less than one-third of our sales are third-party-financed.
Approximately 19.4% of our case goods sales and 9.2% o f our upholstery sales in 2023 were generated by our direct imports. 2 Table of Contents The longer lead times required for deliveries from overseas factories and the production of merchandise exclusively for Havertys makes it imperative for us to have both warehousing capabilities and end-to-end supply chain visibility.
Approximately 20.8% of our case goods sales and 5.9% of o ur upholstery sales in 2024 were generated by our direct imports. 3 Table of Contents The longer lead times required for deliveries from overseas factories and the production of merchandise exclusively for Havertys makes it imperative for us to have both warehousing capabilities and end-to-end supply chain visibility.
Time between purchase and delivery averages 3 to 5 days for in-stock items and 5 to 7 weeks for special order items. Human Capital Resources As of December 31, 2023, Havertys’ total workforce was 2,574: 1,561 in our retail store operations, 779 in our warehouse and delivery points, 177 in our corporate operations, and 57 in our customer-service call centers.
Time between purchase and delivery averages 3 to 5 days for in-stock items and 5 to 7 weeks for special order items. Human Capital Resources As of December 31, 2024, Havertys’ total workforce was 2,334: 1,480 in our retail store operations, 645 in our warehouse and delivery points, 168 in our corporate operations, and 41 in our customer-service call centers.
Havertys has grown to ove r 120 stores in 16 states i n the Southern and Midwest regions. All of our retail locations are operated using the Havertys name, and we do not franchise our stores.
Havertys has grown to 129 stores in 17 states i n the Southern and Midwest regions of the U.S. All of our retail locations are operated using the Havertys name, and we do not franchise our stores.
In addition, we have registered and maintain numerous internet domain names including “havertys.com.” Collectively, the logos, trademarks, service marks and domain names that we hold are of material importance to us. Available Information Our internet website address is www.havertys.com.
In addition, we have registered and maintain numerous internet domain names including “havertys.com.” Collectively, the logos, trademarks, service marks and domain names that we hold are of material importance to us. Available Information Our internet website address is www.havertys.com. Information about us is within this 2024 Form 10-K, and on our Investor Relations website at www.ir.havertys.com.
We are not including this or any other information on our website as a part of, nor incorporating it by reference into, this 2023 Form 10-K or any of our other filings with the Securities and Exchange Commission ("SEC").
This website contains additional information about us, including our corporate governance principles and practices and financial and other information. We are not including this or any other information on our website as a part of, nor incorporating it by reference into, this 2024 Form 10-K or any of our other filings with the Securities and Exchange Commission ("SEC").
During 2022, our business began reverting to its more historical patterns, with a return to increased shopping on weekends and during traditional extended holiday periods. 4 Table of Contents Trademarks and Domain Names We have registered our various logos, trademarks and service marks. We believe that our trademark position is adequately protected in all markets in which we do business.
We experience increased shopping activity on weekends and during traditional extended holiday periods. 5 Table of Contents Trademarks and Domain Names We have registered our various logos, trademarks, and service marks. We believe that our trademark position is adequately protected in all markets in which we do business.
A large number of product reviews written by our customers are also provided, which some consumers find important in the decision-making process. The next stop in the purchase journey for most consumers is a visit to a store to touch, sit, and see merchandise in person.
Product reviews written by our customers are also available, which many consumers find helpful in the decision-making process. The next stop in the purchase journey for most consumers is a visit to a store to touch, sit, and see merchandise in person. Our sales consultants use online tools to further engage our customers while they are in the store.
Upholstered items are largely produced domestically, with the exception of our leather products which are primarily imported from Asia or Mexico. We purchase our furniture merchandise produced in Asia through sourcing companies and also buy direct from manufacturers. We have dedicated quality control specialists on-site during production to ensure the items meet our specifications.
Most of our wood products, or “case goods,” are imported from Asia. Upholstered items are largely produced domestically, with the exception of our leather products which are primarily imported from Asia or Mexico. We purchase our furniture merchandise produced in Asia through sourcing companies and also buy direct from manufacturers.
We continue to fine-tune the content management system as well as find opportunities to add more AI driven automation in an effort to improve the customer experience and increase sales conversion rates through our website and increase traffic to our stores.
We continue to fine-tune the content management system and find opportunities to add more automation to improve the customer experience, increase sales conversion rates through our website, and increase traffic to our stores. Enhancements to our digital properties are critical for meeting the needs of our increasingly interconnected customers.
Our direct import team works with industry designers and manufacturers in some of the best factories throughout Asia.
We have dedicated quality control specialists on-site during production to ensure the items meet our specifications. Our direct import team works with industry designers and manufacturers in some of the best factories throughout Asia.
The store’s location and curb appeal are important to the middle to upper-middle income consumer that we target, and attractive facades complement the quality and style of our merchandise. Interior details are also important for a pleasant and inviting shopping experience.
We strive to have our stores reflect the distinctive style and comfort consumers expect to find when purchasing their home furnishings. The store’s location and curb appeal are important to the middle to upper-middle income consumer that we target, and attractive facades complement the quality and style of our merchandise.
We have avoided offering lower quality, promotional price-driven merchandise favored by many regional and national chains, which we believe would devalue the Havertys brand with the consumer. We carry nationally well-known mattress product lines such as Tempur-Pedic®, Serta®, Stearns and Foster®, Beautyrest®, and Sealy®. Our customers use varying methods to purchase or finance their sales.
We carry nationally well-known mattress product lines such as Tempur-Pedic®, Serta®, Stearns and Foster®, Beautyrest®, and Sealy®. Our customers use varying methods to purchase or finance their sales. As an added convenience to our customers, we offer financing by third-party finance companies.
Retail stores opened or operated by furniture manufacturers in an effort to control and protect the distribution prospects of their branded merchandise compete with us in certain markets. Mass merchants, certain department stores, and some electronics and appliance retailers also have limited furniture product offerings.
The degree and sources of brick-and-mortar retail competition varies by geographic area. We compete with numerous individual retail furniture stores as well as national and regional chains. Retail stores opened or operated by furniture manufacturers compete with us in certain markets in an effort to control and protect the distribution prospects of their branded merchandise.
We also added more conversion event, traffic and conversion variables in Adobe Analytics which has allowed more refined and sophisticated A/B testing and improved insight into customer behavior.
We believe our significant investments in the digital channel have improved search capabilities, site functionality, and product presentation, which are each important in driving traffic, increasing conversion, and sales growth. We have added more conversion events, traffic, and conversion variables in Adobe Analytics which has allowed more refined and sophisticated A/B testing and improved insight into customer behavior.
Our sales consultants also use online tools to further engage our customers while they are in the store. Customers may make their purchase in the store or opt to return home and finalize their decisions, place their orders online and set delivery.
Customers may make their purchase in the store or opt to return home and finalize their decisions, place their orders online and schedule delivery. We limit internet sales of our furniture to within our delivery network, and internet sales of a selection of our accessories to within the continental United States.
Merchandise and Revenues We develop our merchandise selection with the diverse taste of our typical “on trend” customer in mind. A wide range of styles from traditional to contemporary are in our core assortment, and virtually all of the furniture merchandise we carry bears the Havertys brand.
A wide range of styles from traditional to contemporary are in our core assortment, and virtually all of the furniture merchandise we carry bears the Havertys brand. We also tailor our product offerings to the needs and tastes of the local markets we serve, emphasizing more “coastal,” “western” or “urban” looks as appropriate.
We also offer a free in-home design service to those customers seeking a more in-depth personalized experience. The average sales ticket for a customer that has a designer visit their home is generally twice that of our average in-store sales ticket.
The average sales ticket for a customer who has a designer visit their home is generally twice that of our average in-store sales ticket. Approximately 33.6% of our written sales in 2024 resulted from consultations with our in-home designers.
Approximately 28.5% of our sales in 2023 resulted from consultations with our in-home designers. 1 Table of Contents Stores As of December 31, 2023, we operated 124 stores serving 86 cities in 16 states with approximately 4.4 million retail square feet.
Stores As of December 31, 2024, we operated 129 stores serving 92 cities in 17 states with approximately 4.5 million retail square feet. Our stores range in size from 15,000 to 60,000 selling square feet, with the average being approximately 35,000 square feet.
Suppliers and Supply Chain We buy our merchandise from numerous foreign and domestic manufacturers and importers, the largest ten of which accounted for approximately 40.2% of our product purchases during 2023. Most of our wood products, or “case goods,” are imported from Asia.
The fees we pay to the third parties are included in our selling, general, and administrative expenses (“SG&A”) as a selling expense. Suppliers and Supply Chain We buy our merchandise from numerous foreign and domestic manufacturers and importers, the largest ten of which accounted for approximate ly 41.3% of our product purchases during 2024.
The fees we pay to the third parties are included in our selling, general, and expenses (“SG&A”) as a selling expense. We have a seasoned, commissioned-based sales team serving our customers. Their product knowledge is important in assisting customers in evaluating Havertys' merchandise as compared to our competitors.
We have a seasoned, commissioned-based sales team serving our customers. Their product knowledge is important in helping customers evaluate Havertys' merchandise compared to our competitors. We also offer a free in-home design service to customers who want an in-depth personalized experience.
We are very intentional in having open shopping spaces and our disciplined merchandise display ensures uniformity of presentations in-store, online and in our advertising. Our goal, subject to market conditions and identifying suitable sites, is to open five new stores per year and to increase our retail square footage by approximately 2.8% in 2024.
Interior details are also important for a pleasant and inviting shopping experience. We are very intentional in having open shopping spaces and our disciplined merchandise display ensures uniformity of presentations in-store, online and in our advertising. During 2024 we developed a program to improve the in-store experience.
We also tailor our product offerings to the needs and tastes of the local markets we serve, emphasizing more “coastal,” “western” or “urban” looks as appropriate. Our custom upholstery programs and eclectic looks are an important part of our product mix and allow the on-trend consumer more self-expression.
Our custom upholstery programs and eclectic looks are an important part of our product mix and allow the on-trend consumer more self-expression. We have avoided offering lower quality, promotional price-driven merchandise favored by many regional and national chains, which we believe would devalue the Havertys brand with the consumer.
Removed
Our stores range in size from 15,000 to 60,000 selling square feet, with the average being approximately 35,000 square feet. We strive to have our stores reflect the distinctive style and comfort consumers expect to find when purchasing their home furnishings.
Added
These changes focused on: • more visually appealing signage, • tagging strategies, • new fixtures to centrally locate custom fabrics, • optimized floor presentation of our mattress selection, and • equipment for the design center to personalize our customer's shopping experience.
Removed
We are evaluating various "big box" former retail sites in the 30,000 to 32,000 square feet size range and other new locations for expansion. We currently have no plans to add stores outside our distribution footprint. Online Presence We consider our website an extension of our brick-and-mortar locations and not a separate segment of our business.
Added
We expect the program to be implemented over three years and will begin introducing these changes to our larger stores in 2025. 1 Table of Contents Our goal, subject to market conditions and identifying suitable sites, is to open an average of net five new stores per year. We select new locations using demographic and market characteristics and sales potential.
Removed
We limit internet sales of our furniture to within our delivery network, and internet sales of a selection of our accessories to within the continental United States. Our total sales completed online for 2023 were approximately 3.3% of our total 2023 business. We made significant investments in our website during 2022.
Added
These locations are primarily in the form of former "big box" retail sites in the 25,000 to 35,000 square feet size range that we lease with an initial term of years and options to renew. Newly constructed sites are typically leased, though there are occasional opportunities to own the store.
Removed
The site was launched in the fourth quarter featuring a new design and replatformed on a suite of Adobe solutions allowing for better search functionality, navigation, and enriched product pages. At the beginning of 2023, we onboarded a new business partner with deep Adobe experience to further improve the overall customer experience by optimizing site performance and usability.
Added
We continually analyze opportunities for potential relocations within markets and close retail locations that are underperforming or no longer consistent with our brand positioning. For leased locations we generally continue to operate the store until our lease expires.
Removed
We believe offering a direct-to-customer business complements our retail store operations as we serve the customer in the method of their choosing and leverage the power of high-touch service and online capabilities.
Added
During 2024 we opened the first of our stores in Houston, TX, the largest market we did not serve within our existing distribution system. We currently have no plans to add stores outside our distribution footprint.
Removed
We historically achieve our smallest quarter by revenues in the second quarter and the largest in the fourth quarter. The “nesting” response generated by COVID-19 created outsized demand beginning in the second quarter of 2020 and, when combined with the strong housing market contributed to the strong sales levels we experienced through 2021.
Added
The following outlines the change in our selling square footage for each of the three years ended December 31 (square footage in thousands): 2024 2023 2022 Store Activity: # of Stores Square Footage # of Stores Square Footage # of Stores Square Footage Opened 6 171 4 110 3 97 Closed 1 20 2 86 2 88 Year end balances 129 4,538 124 4,387 122 4,363 The following table summarizes our store activity in 2024 and current plans for 2025.
Removed
In addition to the information about us contained in this 2023 Form 10-K, information about us can be found on our Investor Relations website at www.ir.havertys.com. This website contains a significant amount of information about us, including our corporate governance principles and practices and financial and other information.
Added
Location Quarter Actual or Planned Category Pine Bluff, AR Q-1-24 Closure Southaven, MS Q-1-24 Open Destin, FL Q-2-24 Open Miami, FL Q-3-24 Open Tampa, FL Q-4-24 Open Greenwood, IN Q-4-24 Open Houston, TX Q-4-24 Open Houston, TX Q-1-25 Open Daytona, FL Q-2-25 Relocation Houston, TX Q-3-25 Open Houston, TX Q-2-26 Open Online Presence We consider our website an extension of our brick-and-mortar locations and not a separate segment of our business.
Added
Our total sales completed online for 2024 were approximately 3.0% of our total 2024 business. 2 Table of Contents From the initial inspirational point in the purchase journey to providing design assistance, we continue to invest in our digital channels. We have made investments to improve the presentation and ease of navigation for our customers and information on products.
Added
A significant portion of the traffic in our digital channels is on mobile devices. Mobile customers expect simple and relevant digital interactions. To meet these expectations, we have invested in our digital properties to improve the overall presentation and ease of navigation for the user.
Added
We have also enhanced online product landing pages by providing more information, including related products within and beyond its larger collection. We believe our focus on improving search capabilities, website functionality, category presentation, product content, and delivery timeframe can lead to increased traffic, conversion rates and sales.
Added
We do not view the interconnected shopping experience as a specific transaction; rather, we believe it encompasses an entire journey spanning across inspiration and know-how, purchase and fulfillment, and post-purchase care and support. Merchandise and Revenues We develop our merchandise selection with the diverse taste of our typical “on-trend” customer in mind.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

28 edited+10 added−3 removed55 unchanged
Biggest changeIn addition, the costs to eliminate or alleviate network security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful and could result in potential theft, loss, destruction or corruption of information we store electronically, as well as unexpected interruptions, delays or cessation of service, any of which could cause harm to our business operations. 9 Table of Contents Moreover, a security breach involving the misappropriation, loss or other unauthorized disclosure of sensitive or confidential information could give rise to unwanted media attention, materially damage our customer relationships and reputation, and result in litigation or fines, fees, or potential liabilities, which may not be covered by our insurance policies, each of which could have a material adverse effect on our business, results of operations and financial condition.
Biggest changeMoreover, a security breach involving the misappropriation, loss or other unauthorized disclosure of sensitive or confidential information could give rise to unwanted media attention, materially damage our customer relationships and reputation, and result in litigation or fines, fees, or potential liabilities, which may not be covered by our insurance policies, each of which could have a material adverse effect on our business, results of operations and financial condition.
On a global and regional basis, the sources and prices of those materials and components are susceptible to significant price fluctuations due to supply/demand trends, transportation costs, government regulations and tariffs, changes in currency exchange rates, price controls, the economic and political climate, and other unforeseen circumstances.
On a global and regional basis, the sources and prices of those materials and components are susceptible to significant price fluctuations due to supply and demand trends, transportation costs, government regulations and tariffs, changes in currency exchange rates, price controls, the economic and political climate, and other unforeseen circumstances.
Additionally, investors and shareholder advocates are placing ever increasing emphasis on how corporations address ESG issues in their business strategy when making investment decisions and when developing their investment theses and proxy recommendations. We may incur meaningful costs with respect to our ESG efforts and if such efforts are negatively perceived, our reputation and stock price may suffer.
Additionally, some investors and shareholder advocates are placing ever increasing emphasis on how corporations address ESG issues in their business strategy when making investment decisions and when developing their investment theses and proxy recommendations. We may incur meaningful costs with respect to our ESG efforts and if such efforts are negatively perceived, our reputation and stock price may suffer.
We rely on third party transportation providers for substantially all of our product shipments from our vendors. We rely on third party service providers for substantially all of our product shipments from our vendors, both domestic and foreign, to our DCs and also to handle over-the-road delivery of product from the DCs to our HDCs and some market areas .
We rely on third party service providers for substantially all of our product shipments from our vendors, both domestic and foreign, to our DCs and also to handle over-the-road delivery of product from the DCs to our HDCs and some market areas .
Our and our vendors’ utilization of these shipping services is subject to risks that are outside of our control, including increases in fuel prices and labor costs, employee strikes, labor shortages, strikes and union organizing activity, delays in shipping (including congestion at domestic and foreign ports), delays in unloading cargo from ships, availability of adequate trucking or railway providers, adverse weather, natural disasters, possible acts of terrorism and outbreaks of disease.
Our and our vendors’ utilization of these shipping services is subject to risks that are outside of our control, including increases in fuel prices and labor costs, employee strikes, labor shortages, union organizing activity, delays in shipping (including congestion at domestic and foreign ports), delays in 9 Table of Contents unloading cargo from ships, availability of adequate trucking or railway providers, adverse weather, natural disasters, possible acts of terrorism and outbreaks of disease.
Prolonged or pervasive economic downturns could slow the pace of new store openings or cause current stores 10 Table of Contents to temporarily or permanently close. Adverse changes in factors affecting discretionary consumer spending have reduced and may continue to further reduce consumer demand for our products, thus reducing our sales and harming our business and operating results.
Prolonged or pervasive economic downturns could slow the pace of new store openings or cause current stores to temporarily or permanently close. Adverse changes in factors affecting discretionary consumer spending have reduced and may continue to further reduce consumer demand for our products, thus reducing our sales and harming our business and operating results.
We are regularly the target of attempted cyber and other security threats and must continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact.
We are regularly the target of attempted cyber and 10 Table of Contents other security threats and must continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact.
Our future success, including our ability to achieve growth and increased profitability, is dependent on the ability of our management team to execute on our long-term business strategy, which includes increasing our retail footprint, expanding our online presence, increasing the efficiency and profitability of our operations, introducing new products in the marketplace and driving increased traffic to our retail stores and e-commerce site through updated marketing efforts.
Our future success, including our ability to achieve growth and increased profitability, is dependent on the ability of our management team to execute on our long-term business strategy, which includes: • increasing our retail footprint, • expanding our online presence, • increasing the efficiency and profitability of our operations, • introducing new products in the marketplace, and driving increased traffic to our retail stores and e-commerce site through updated marketing efforts, and • providing excellent service to our customers.
A failure to maintain appropriate organizational capacity and capability to support our strategic initiatives or to build adequate bench strength with key skillsets required for seamless succession of leadership, could jeopardize our ability to meet our business performance expectations and growth targets.
A failure to maintain appropriate organizational capacity and capability to support our strategic initiatives or to build adequate bench strength with key skillsets 11 Table of Contents required for seamless succession of leadership, could jeopardize our ability to meet our business performance expectations and growth targets.
Factors influencing consumer spending include general economic conditions, consumer disposable income, fuel prices, inflation, recession and fears of recession, unemployment, inclement weather, availability of consumer credit, consumer debt levels, conditions in the housing market, interest rates, sales tax rates and rate increases, sustained periods of inflation, civil disturbances and terrorist activities, foreign currency exchange rate fluctuations, consumer confidence in future economic and political conditions, natural disasters, and consumer perceptions of personal well‑being and security, including health epidemics or pandemics, such as the COVID-19 pandemic.
Factors influencing consumer spending include: • general economic conditions, • consumer disposable income, • fuel prices, • inflation, • recession and fears of recession, • unemployment, • inclement weather, • availability of consumer credit, • consumer debt levels, • conditions in the housing market, • interest rates, • sales tax rates and rate increases, • sustained periods of inflation, • civil disturbances and terrorist activities, • foreign currency exchange rate fluctuations, • consumer confidence in future economic and political conditions, • natural disasters, and • consumer perceptions of personal well‑being and security, including health epidemics or pandemics.
If transportation costs exceed amounts we are able to effectively pass on to the consumer, either by higher prices and/or higher delivery charges, then our profitability will suffer. ESG risks could adversely affect our reputation and shareholder, employee, customer and third-party relationships and may negatively affect our stock price.
If transportation costs exceed amounts we are able to effectively pass on to the consumer, either by higher prices and/or higher delivery charges, then our profitability will suffer. 12 Table of Contents ESG risks could adversely affect our reputation and shareholder, employee, customer and third-party relationships and may negatively affect our stock price.
If such an interruption were to occur, our ability to deliver our products in a timely manner would likely be impacted. 8 Table of Contents We rely extensively on information technology systems to process transactions, summarize results, and manage our business. Disruptions in our information technology systems could adversely affect our business and operating results.
If such an interruption were to occur, our ability to deliver our products in a timely manner would likely be impacted. We rely extensively on information technology systems to process transactions, summarize results, and manage our business. Disruptions in our information technology systems could adversely affect our business and operating results.
Our distribution system, which utilizes three DCs and multiple home delivery centers is very transportation dependent and includes the use of third-party providers to reach the 22 states and the District of Columbia that we serve from our stores across 16 Southern and Midwestern states. Merchandise is delivered to customers' homes by Havertys delivery teams.
Our distribution system, which utilizes three DCs and multiple home delivery centers is very transportation dependent and includes the use of third-party providers to rea ch the 22 states and the District of Columbia that we serve from our stores across 17 Southern and Midwestern states. Merchandise is delivered to customers' homes by Havertys delivery teams.
The violation of applicable legal requirements, including labor, manufacturing and safety laws, by any of our manufacturers, the failure of any of our manufacturers to adhere to our global compliance standards or the divergence of the labor practices followed by any of our manufacturers from those generally accepted in the U.S. could disrupt our supply of products from our manufacturers, could result in potential liability to us or could harm our reputation and brand, any of which could negatively affect our business and operating results.
The violation of applicable legal requirements, including labor, manufacturing and safety laws, by any of our manufacturers, the failure of any of our manufacturers to adhere to our global compliance standards or the divergence of the labor practices followed by any of our manufacturers from those generally accepted in the U.S. could: • disrupt our supply of products from our manufacturers, • result in potential liability to us, or • harm our reputation and brand.
If our marketing, advertising, and other efforts are unsuccessful or our brand or reputation is damaged, our business, operating results and financial condition could be materially adversely affected. We import a substantial portion of our merchandise from foreign sources. This exposes us to certain risks that include political and economic conditions.
If our marketing, advertising, and other efforts are unsuccessful or our brand or reputation is damaged, our business, operating results and financial condition could be materially adversely affected. 7 Table of Contents We import a substantial portion of our merchandise from foreign sources, which exposes us to political and economic risks inherent in global sourcing.
Resulting penalties or enforcement actions could delay future imports or otherwise negatively impact our business. There also remains a risk that one or more of our foreign manufacturers will not adhere to applicable legal requirements or our compliance standards such as fair labor standards, the prohibition on child labor and other product safety or manufacturing safety standards.
There also remains a risk that one or more of our foreign manufacturers will not adhere to applicable legal requirements or our compliance standards such as fair labor standards, the prohibition on child labor and other product safety or manufacturing safety standards.
Our vendors might fail in meeting our quality control standards or reacting to changes to the legislative or regulatory framework regarding product safety. All of our vendors must comply with applicable product safety laws and regulations, and we are dependent on them to ensure that the products we buy comply with all safety standards as well applicable quality standards.
All of our vendors must comply with applicable product safety laws and regulations, and we are dependent on them to ensure that the products we buy comply with all safety standards as well applicable quality standards.
Significant deviation from the projected demand for products that we sell may have an adverse effect on our results of operations and financial condition, either from lost sales or lower margins resulting from inventory-driven price reductions. Disruptions to our supply chain could result in late product arrivals.
We often make commitments to purchase products from our vendors in advance of proposed production dates. Significant deviation from the projected demand for products that we sell may have an adverse effect on our results of operations and financial condition, either from lost sales or lower margins resulting from inventory-driven price reductions.
Such changes, if they occur, could have one or more of the following impacts: • we could be forced to raise retail prices so high that we are unable to sell the products at current unit volumes; • if we are unable to raise retail prices commensurately with the cost increases, gross profit as recognized under our LIFO inventory accounting method could be negatively impacted; or • we may be forced to find alternative sources of comparable product, which may be more expensive than the current product or of lower quality, or the vendor may be unable to meet our requirements for quality, quantities, delivery schedules or other key terms. 6 Table of Contents We are dependent upon the ability of our third-party producers to meet our requirements; any failures by these producers, or the unavailability of suitable suppliers at reasonable prices or limitations on our ability to source from third-party producers may negatively impact our ability to deliver quality merchandise to our customers on a timely basis or result in higher costs or reduced net sales.
Such changes, if they occur, could have one or more of the following impacts: • we could be forced to raise retail prices so high that we are unable to sell the products at current unit volumes; • if we are unable to raise retail prices commensurately with the cost increases, gross profit as recognized under our LIFO inventory accounting method could be negatively impacted; or • we may be forced to find alternative sources of comparable product, which may be more expensive than the current product or of lower quality, or the vendor may be unable to meet our requirements for quality, quantities, delivery schedules or other key terms.
In addition, failure by our independent manufacturers to adhere to ethical labor or other laws or business practices, and the potential litigation, negative publicity and political pressure relating to any of these events, could disrupt our operations or harm our reputation.
In addition, failure by our independent manufacturers to adhere to ethical labor or other laws or business practices, and the potential litigation, negative publicity and political pressure relating to any of these events, could disrupt our operations or harm our reputation. 8 Table of Contents Our vendors might fail in meeting our quality control standards or reacting to changes to the legislative or regulatory framework regarding product safety.
We continuously monitor changes in home design trends through attendance at international industry events and fashion shows, internal marketing research, and regular communication with our retailers and design professionals who provide valuable input on consumer tendencies. However, as with all retailers, our business is susceptible to changes in consumer tastes and trends.
Our products must appeal to our target consumers whose preferences, tastes and trends cannot be predicted with certainty and are subject to change. We continuously monitor changes in home design trends through attendance at international industry events and fashion shows, internal marketing research, and regular communication with our retailers and design professionals who provide valuable input on consumer tendencies.
Our success depends upon our ability to anticipate and respond in a timely manner to fashion trends relating to home furnishings. If we fail to successfully identify and respond to these changes, our sales may decline. Our future success is largely dependent on our ability to successfully implement our growth and other strategies.
However, as with all retailers, our business is susceptible to changes in consumer tastes and trends. Our success depends upon our ability to anticipate and respond in a timely manner to fashion trends relating to home furnishings. If we fail to successfully identify and respond to these changes, our sales may decline.
Businesses face increasing public scrutiny related to environmental, social and governance (“ESG”) activities.
Our business faces increasing public scrutiny related to environmental, social, and governance ("ESG") activities.
All our purchases are denominated in U.S. dollars. As exchange rates between the U.S. dollar and certain other currencies become unfavorable, the likelihood of price increases from our vendors increases. Some of the products we purchase are also subject to tariffs. If tariffs are imposed on additional products or the tariff rates are increased, our vendors may increase their prices.
All our purchases are denominated in U.S. dollars. As exchange rates between the U.S. dollar and certain other currencies become unfavorable, the likelihood of price increases from our vendors increases.
Such supply chain disruptions could materially adversely impact the ability of our suppliers to fulfil our orders in a timely manner, if at all, and could lead to increased prices, which we may not be able to pass through to our customers. 7 Table of Contents Our revenue can be adversely affected by our ability to successfully forecast our supply chain needs and our foreign manufacturers’ ability to comply with international trade rules and regulations.
In addition, supply chain challenges, including shutdowns and shipping delays, can adversely impact our business. Such supply chain disruptions could affect the ability of our suppliers to fulfil our orders in a timely manner, if at all, and could lead to increased prices, which we may not be able to pass through to our customers.
Rapidly evolving technologies are altering the manner in which retailers communicate and transact with customers, led by internet-based and multichannel retailers that have made significant investments in recent years, including with pricing technology and shipping capabilities. 5 Table of Contents Competition from any of these sources could cause us to lose market share, revenues and customers; increase expenditures; or reduce prices, any of which could have a material adverse effect on our results of operations.
Rapidly evolving technologies are altering the manner in which retailers communicate and transact with customers, led by internet-based and multichannel retailers that have made significant investments in recent years, including with pricing technology and shipping capabilities.
Increased levels of out-of-stock merchandise and loss of confidence by customers in our ability to deliver goods as promised could negatively affect sales. In addition, there is a risk that compliance lapses by our foreign manufacturers could occur which could lead to investigations by U.S. government agencies responsible for international trade compliance.
In addition, there is a risk that compliance lapses by our foreign manufacturers could occur which could lead to investigations by U.S. government agencies responsible for international trade compliance. Resulting penalties or enforcement actions could delay future imports or otherwise negatively impact our business.
Optimal product flow is dependent on demand planning and forecasting, supplier production according to such planning, and timely transportation. We often make commitments to purchase products from our vendors in advance of proposed production dates.
Our revenue can be adversely affected by our ability to successfully forecast our supply chain needs and our foreign manufacturers’ ability to comply with international trade rules and regulations. Optimal product flow is dependent on demand planning and forecasting, supplier production according to such planning, and timely transportation.
Removed
If we fail to successfully anticipate or respond to changes in consumer preferences in a timely manner, our sales may decline. Our products must appeal to our target consumers whose preferences, tastes and trends cannot be predicted with certainty and are subject to change.
Added
Competition from any of these sources could cause us to lose market share, revenues and customers; increase expenditures; or reduce prices, any of which could have a material adverse effect on our results of operations. 6 Table of Contents If we fail to successfully anticipate or respond to changes in consumer preferences in a timely manner, our sales may decline.
Removed
Changes in exchange rates or tariffs could impact the price we pay for these goods, resulting in potentially higher retail prices and/or lower gross profit on these goods. Based on product costs, approximately 61% of our total furniture purchases (which exclude accessories and mattresses) in 2023 were for goods that were not produced domestically.
Added
Additionally, our business relies on the strategic placement of our store locations. Because our business predominately relies on in-store sales, if our stores are located in areas that do not attract sufficient customer traffic or do not align with the shopping preferences of our customer bases, our sales may be adversely affected.
Removed
While the global supply chain challenges experienced as a result of the COVID-19 pandemic lessened over the past two years, there can be no assurance that further challenges, including shutdowns and shipping delays, will not occur.
Added
Our future success is largely dependent on our ability to successfully implement our growth and other strategies.
Added
Based on product costs, approximately 58 % o f our total furniture purchases in 2024 were for goods that were not produced domestically. Additionally, some of the products we purchase from U.S.-based vendors are sourced, at least in part, from foreign suppliers.
Added
Therefore, we are subject to risks associated with foreign sourcing of our merchandise, including but not limited to: • existing, new, or increased tariffs and other import measures; • foreign regulations that may impact the availability or cost of supply of our products; • economic uncertainties, including inflation and the financial instability of vendors; • fluctuations in foreign currency exchange rates; and • political instability, geopolitical or military conflicts or acts of war, and act of terrorism or violence, • including any related sanctions or other government or private responses.
Added
Some of the products we purchase are also subject to tariffs and other import measures. If tariffs are imposed on additional products or the tariff rates are increased, our vendors may increase their prices.
Added
We are dependent upon t he ability of our third-party producers to meet our requirements; any failures by these producers, or the unavailability of suitable suppliers at reasonable prices or limitations on our ability to source from third-party producers may negatively impact our ability to deliver quality merchandise to our customers on a timely basis or result in higher costs or reduced net sales.
Added
Disruptions to our supply chain could result in late product arrivals. Increased levels of out-of-stock merchandise and loss of confidence by customers in our ability to deliver goods as promised could negatively affect sales.
Added
Any violation of legal requirements by our vendors could negatively affect our business and operating results. We rely on third party transportation providers for substantially all of our product shipments from our vendors.
Added
In addition, the costs to eliminate or alleviate network security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful and could result in potential theft, loss, destruction or corruption of information we store electronically, as well as unexpected interruptions, delays or cessation of service, any of which could cause harm to our business operations.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeManagement is responsible for day-to-day assessment and management of cybersecurity risks. Our cybersecurity risk management and strategy processes are led by our CIO, VP Information Technology, and Manager of Security. Such individuals have collectively over 50 years of work experience in various roles managing information security, developing cybersecurity strategy, and implementing effective information and cybersecurity programs.
Biggest changeSuch individuals have collectiv ely over 50 ye ars of work experience in various roles managing information security, developing cybersecurity strategy, and implementing effective information and cybersecurity programs.
For more information on how cybersecurity risk could materially affect our business strategy, results of operations, or financial condition, please refer to Item 1A Risk Factors. 12 Table of Contents Cybersecurity Governance The board of directors, as a whole, has oversight responsibility for our strategic and operational risks.
For more information on how cybersecurity risk could materially affect our business strategy, results of operations, or financial condition, please refer to Item 1A Risk Factors. Cybersecurity Governance The board of directors, as a whole, has oversight responsibility for our strategic and operational risks.
Our cybersecurity teams assist in responding to incidents depending on severity levels and seek to improve our cybersecurity incident management plan through periodic tabletops or simulations. • Training: We provide security awareness training to help our employees understand their information protection and cybersecurity responsibilities.
Our 13 Table of Contents cybersecurity teams assist in responding to incidents depending on severity levels and seek to improve our cybersecurity incident management plan through periodic tabletops or simulations. • Training: We provide security awareness training to help our employees understand their information protection and cybersecurity responsibilities.
The CIO also presents at least annually to the Board an overview of our cybersecurity threat risk management and strategy processes covering topics such as data security posture, results of third-party assessments, our incident response plan, and cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks.
The SVP of Information Technology also presents at least annually to the Board an overview of our cybersecurity threat risk management and strategy processes covering topics such as data security posture, results of third-party assessments, our incident response plan, and cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks. 14 Table of Contents
Our Chief Information Officer (CIO) and other internal members of our technology team provide regular reports to the audit committee regarding the evolving cybersecurity landscape, including emerging risk, as well as our processes, program and initiatives for managing these risks. The audit committee, in turn, periodically reports on its review with the board of directors.
Our Senior Vice President (SVP) of Information Technology and other internal members of our technology team provide regular reports to the audit committee regarding the evolving cybersecurity landscape, including emerging risks, as well as our processes, programs, and initiatives for managing these risks. The audit committee, in turn, periodically reports on its review with the board of directors.
Added
Management is responsible for day-to-day assessment and management of cybersecurity risks. Our cybersecurity risk management and strategy processes are led by our SVP of Information Technology and Assistant Vice President (AVP) of IT Infrastructure and Security.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table sets forth the number of stores we operated at December 31, 2023 by state: State Number of Stores State Number of Stores Florida 30 Maryland 4 Texas 21 Arkansas 3 Georgia 15 Louisiana 3 North Carolina 10 Ohio 3 Virginia 10 Kentucky 2 South Carolina 7 Missouri 2 Alabama 6 Indiana 1 Tennessee 6 Kansas 1 The 39 retail locations which we owned at December 31, 2023 had a net book value for land and buildings of $65.0 million.
Biggest changeThe following table sets forth the number of stores we operated at December 31, 2024 by state: State Number of Stores State Number of Stores Florida 33 Louisiana 3 Texas 22 Ohio 3 Georgia 15 Arkansas 2 North Carolina 10 Kentucky 2 Virginia 10 Indiana 2 South Carolina 7 Missouri 2 Alabama 6 Kansas 1 Tennessee 6 Mississippi 1 Maryland 4 The 37 retail locations which we owned at December 31, 2024 had a net book value for land and buildings of $58.9 million.
We believe that our facilities are suitable and adequate for present purposes, and that the productive capacity in such facilities is substantially being utilized. For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this report under Item 7 of Part II.
We believe that our facilities are suitable and adequate for present purposes, and that the productive capacity in such facilities is substantially being utilized. For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this report under Item 7 of Part II. 15 Table of Contents
ITEM 2. PROPERTIES Stores Our retail store space at December 31, 2023 totaled approximately 4.4 million square feet for 124 stores .
ITEM 2. PROPERTIES Stores Our retail store space at December 31, 2024 totaled approximately 4.5 million square feet for 129 stores .
The remaining 85 locations are leased by us with various termination dates through 2035 plus renewal options. 13 Table of Contents Distribution Facilities All of our distribution facilities at December 31, 2023 were leased except for the Florida and Virginia properties.
The remaining 92 locations are leased by us with various termination dates through 2037 plus renewal options. Distribution Facilities All of our distribution facilities at December 31, 2024 were leased except for the Florida and Virginia properties.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

4 edited+1 added−2 removed1 unchanged
Biggest changeBurdette 62 President 2021 Executive Vice President, Operations 2017-March 1, 2021 Executive Vice President, Stores, 2008-2017 J. Edward Clary 63 Executive Vice President, and Chief Information Officer 2015 Has held this position for the last five years. John L. Gill 60 Executive Vice President, Merchandising 2019 Senior Vice President, Merchandising 2018-2019; Vice President, Merchandising 2017-2018 Richard B.
Biggest changeSmith 1,2 74 Executive Chairman of the Board 2025 Chairman of the Board, 2012-2024 Chief Executive Officer, 2002-2024 President, 2002-March 1, 2021 Director 1989 John L. Gill 61 Executive Vice President, Merchandising 2019 Has held this position for the last five years Richard B.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 14 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Our executive officers are elected or appointed annually by the Board of Directors for terms of one year or until their successors are elected and qualified, subject to removal by the Board at any time.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 16 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Our executive officers are elected or appointed annually by the Board of Directors for terms of one year or until their successors are elected and qualified, subject to removal by the Board at any time.
Name, age and office (as of March 1, 2024) and year elected to office Principal occupation during last five years other than office of the Company currently held Clarence H. Smith 73 Chairman of the Board Chief Executive Officer 2012 2002 President and Chief Executive Officer, 2002-March 1, 2021 Director 1989 Steven G.
Name, age and office (as of March 1, 2025) and year elected to office Principal occupation during last five years other than office of the Company currently held Steven G. Burdette 1 63 President and Chief Executive Officer 2025 President, 2021 Executive Vice President, Operations 2017-March 1, 2021 Director 2025 Clarence H.
Taylor 62 Senior Vice President, General Counsel 2010 Has held this position for the last five years Clarence H. Smith and one of our directors, Rawson Haverty, Jr., are first cousins. 15 Table of Contents PART II
Smith and one of our directors, Rawson Haverty, Jr., are first cousins. 17 Table of Contents PART II
Removed
Hare 57 Executive Vice President and Chief Financial Officer 2017 Has held this position for the last five years. Helen B. Bautista 57 Senior Vice President, Marketing 2021 Vice President, Marketing for Havertys, 2019-March 1, 2021; Senior Vice President Group Account Director, 2018-2019 for Fitzco, a McCann World Group Agency Kelley A.
Added
Hare 58 Executive Vice President, Chief Financial Officer, and Corporate Secretary 2024 Executive Vice President and Chief Financial Officer, 2017- November 16, 2024 1 - Clarence H. Smith was elected Executive Chairman and Steven G. Burdette was elected President and Chief Executive Officer effective January 1, 2025. 2 - Clarence H.
Removed
Fladger 54 Senior Vice President and Chief Human Resources Officer 2019 Vice President, Human Resource Services, 2016-2019 and Chief Diversity and Inclusion Officer, 2017-2019 for Perdue Farms, Inc. Jenny Hill Parker 65 Senior Vice President, Finance, and Corporate Secretary 2019 Senior Vice President, Finance, Treasurer and Corporate Secretary 2010-2019 Janet E.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAll rights reserved. 2018 2019 2020 2021 2022 2023 HVT $ 100.00 $ 111.59 $ 170.53 $ 205.69 $ 215.60 $ 274.78 HVT-A $ 100.00 $ 113.83 $ 180.99 $ 204.99 $ 221.09 $ 272.82 S&P SmallCap 600 Index $ 100.00 $ 122.78 $ 136.64 $ 173.29 $ 145.39 $ 168.73 SIC Codes 5700-5799 $ 100.00 $ 150.35 $ 205.18 $ 277.11 $ 182.77 $ 212.77 16 Table of Contents Stockholders Based on the number of individual participants represented by security position listings, there are approximately 11,400 holders of our common stock and 200 holders of our Class A common stock as of February 5, 2024.
Biggest changeAll rights reserved. 2019 2020 2021 2022 2023 2024 HVT $ 100.00 $ 152.82 $ 184.33 $ 193.20 $ 246.24 $ 161.59 HVT-A $ 100.00 $ 158.99 $ 180.08 $ 194.22 $ 239.67 $ 154.70 S&P SmallCap 600 Index $ 100.00 $ 111.29 $ 141.13 $ 118.41 $ 137.42 $ 149.37 SIC Codes 5700-5799 $ 100.00 $ 136.86 $ 184.92 $ 120.34 $ 140.99 $ 200.79 18 Table of Contents Stockholders Based on the number of individual participants represented by security position listings, there are approximately 8,900 holders of our common stock and 200 holders of our Class A common stock as of February 14, 2025.
Stock Performance Graph The following graph compares the performance of Havertys’ Common Stock and Class A Common Stock against the cumulative return of the NYSE/AMEX/Nasdaq Home Furnishings & Equipment Stores Index (SIC Codes 5700 – 5799) and the S&P SmallCap 600 Index for the period of five years commencing December 31, 2018 and ending December 31, 2023.
Stock Performance Graph The following graph compares the performance of Havertys’ Common Stock and Class A Common Stock against the cumulative return of the NYSE/AMEX/Nasdaq Home Furnishings & Equipment Stores Index (SIC Codes 5700 – 5799) and the S&P SmallCap 600 Index for the period of five years commencing December 31, 2019 and ending December 31, 2024.
The graph assumes an initial investment of $100 on January 1, 2018 and reinvestment of dividends. NOTE: Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2024. Index Data: Copyright Standard and Poor’s, Inc. Used with permission.
The graph assumes an initial investment of $100 on January 1, 2019 and reinvestment of dividends. NOTE: Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2025. Index Data: Copyright Standard and Poor’s, Inc. Used with permission.
Dividends We have historically paid and expect to continue to pay for the foreseeable future, quarterly cash dividends on our Common Stock and Class A Common Stock.
Dividends We have paid a cash dividend in each year since 1935 and expect to continue to pay quarterly cash dividends on our Common Stock and Class A Common Stock for the foreseeable future.
The following table presents information with respect to our repurchase of Havertys’ common stock during the fourth quarter of 2023: (a) Total Number of Shares Purchased (b) Average Price Paid Per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs October 1 - October 31 — $ — — $ 16,814,000 November 1 - November 30 99,768 $ 29.55 99,768 $ 13,865,000 December 1 - December 31 23,082 $ 32.61 23,082 $ 13,113,000 Total 122,850 122,850
The following table presents information with respect to our repurchase of Havertys’ common stock during the fourth quarter of 2024: (a) Total Number of Shares Purchased (b) Average Price Paid Per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs October 1 - October 31 — $ — — $ 13,113,000 November 1 - November 30 200,000 $ 23.23 200,000 $ 8,467,000 December 1 - December 31 14,500 $ 23.84 14,500 $ 8,121,000 Total 214,500 214,500
Our credit agreement includes covenants that may restrict our ability to pay dividends. For more information, see Note 5, “Credit Arrangement,” and Note 9, “Stockholders’ Equity,” in the Notes to Consolidated Financial Statements.
For more information, see Note 5, “Credit Arrangement,” and Note 9, “Stockholders’ Equity,” in the Notes to Consolidated Financial Statements.
The payment of dividends and the amount are determined by the Board of Directors and depend upon, among other factors, our earnings, operations, financial condition, capital requirements and general business outlook at the time such dividends are considered. We have paid a cash dividend in each year since 1935.
The payment of dividends and the amount are determined by the Board of Directors and depend upon, among other factors, our earnings, operations, financial condition, capital requirements and general business outlook at the time such dividends are considered. Our credit agreement includes covenants that may restrict our ability to pay dividends.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

33 edited+3 added−8 removed20 unchanged
Biggest changeStatement of Earnings Data Year Ended December 31, (Dollars in thousands, except per share data) 2023 2022 2021 2020 (1) 2019 Net sales $ 862,133 $ 1,047,215 $ 1,012,799 $ 748,252 $ 802,291 Gross profit 523,092 604,224 574,625 418,994 434,488 Percent of net sales 60.7 % 57.7 % 56.7 % 56.0 % 54.2 % Selling, general and administrative expenses (2) 455,812 486,298 456,267 377,288 407,456 Percent of net sales 52.9 % 46.4 % 45.1 % 50.4 % 50.8 % Income before income taxes (2)(3) 72,711 119,501 118,535 76,731 28,724 Percent of net sales 8.4 % 11.4 % 11.7 % 10.3 % 3.6 % Net income (2)(3) 56,319 89,358 90,803 59,148 21,865 Percent of net sales 6.5 % 8.5 % 9.0 % 7.9 % 2.7 % Share Data Diluted earnings per Common share (2)(3) $ 3.36 $ 5.24 $ 4.90 $ 3.12 $ 1.08 Cash dividends – per share: Common Stock (4) $ 2.18 $ 2.09 $ 2.97 $ 2.77 $ 0.76 Class A Common Stock (4) $ 2.05 $ 1.96 $ 2.79 $ 2.62 $ 0.72 Diluted weighted average common shares outstanding 16,774 17,038 18,543 18,932 20,261 Balance Sheet Data Total assets $ 654,133 $ 649,049 $ 686,290 $ 680,372 $ 560,072 Inventories 93,956 118,333 112,031 89,908 104,817 Net property and equipment (5) 171,588 137,475 126,099 108,366 156,534 Right-of-use lease assets 202,306 207,390 222,356 228,749 175,474 Lease liabilities 217,754 221,287 230,352 233,666 179,055 Customer deposits 35,837 47,969 98,897 86,183 30,121 Total debt (6) — — — — — Stockholders’ Equity 308,366 289,399 255,970 252,967 260,503 Statement of Cash Flows Data Net cash provided by operating activities $ 97,203 $ 51,015 $ 97,242 $ 130,191 $ 63,419 Depreciation and amortization (5) 18,603 16,926 16,304 18,207 20,596 Capital expenditures 53,115 28,411 34,090 10,927 16,841 Dividends paid 35,240 33,948 52,446 50,521 15,056 Share repurchases 6,895 29,998 41,809 19,708 29,757 Other Supplemental Data and Metrics Number of stores 124 122 121 120 121 Retail square footage at year-end 4,387 4,363 4,354 4,352 4,426 Sales per WAVG retail square foot $ 197 $ 241 $ 232 $ 173 $ 183 Average ticket (7) $ 3,278 $ 3,171 $ 2,865 $ 2,482 $ 2,323 Net sales (decrease) increase (%) (17.7 %) 3.4 % 35.4 % (6.7) % (1.9) % Comparable store sales (decrease) increase (%) (18.4 %) 3.4 % 17.9 % 5.0 % (1.4) % Employees 2,574 2,831 2,845 2,766 3,425 (1) Stores were closed and delivery operations were paused for approximately six weeks due to COVID-19.
Biggest changeStatement of Earnings Data Year Ended December 31, (Dollars in thousands, except per share data) 2024 2023 2022 2021 2020 (1) Net sales $ 722,899 $ 862,133 $ 1,047,215 $ 1,012,799 $ 748,252 Gross profit 439,078 523,092 604,225 574,625 418,994 Percent of net sales 60.7 % 60.7 % 57.7 % 56.7 % 56.0 % Selling, general and administrative expenses 419,221 455,812 486,298 456,267 377,288 Percent of net sales 58.0 % 52.9 % 46.4 % 45.1 % 50.4 % Income before income taxes (2) 26,153 72,711 119,501 118,535 76,731 Percent of net sales 3.6 % 8.4 % 11.4 % 11.7 % 10.3 % Net income (2) 19,956 56,319 89,358 90,803 59,148 Percent of net sales 2.8 % 6.5 % 8.5 % 9.0 % 7.9 % Share Data Diluted earnings per Common share (2) $ 1.19 $ 3.36 $ 5.24 $ 4.90 $ 3.12 Cash dividends – per share: Common Stock (3) $ 1.26 $ 2.18 $ 2.09 $ 2.97 $ 2.77 Class A Common Stock (3) $ 1.18 $ 2.05 $ 1.96 $ 2.79 $ 2.62 Diluted weighted average common shares outstanding 16,707 16,774 17,038 18,543 18,932 Balance Sheet Data Total assets $ 648,747 $ 654,133 $ 649,050 $ 686,290 $ 680,372 Inventories 83,419 93,956 118,333 112,031 89,908 Net property and equipment 182,622 171,588 137,475 126,099 108,366 Right-of-use lease assets 194,411 202,306 207,390 222,356 228,749 Lease liabilities 218,379 217,754 221,287 230,352 233,666 Customer deposits 40,733 35,837 47,969 98,897 86,183 Total debt (4) — — — — — Stockholders’ Equity 307,561 308,366 289,399 255,970 252,967 Statement of Cash Flows Data Net cash provided by operating activities $ 58,909 $ 97,203 $ 51,015 $ 97,242 $ 130,191 Depreciation and amortization 21,611 18,603 16,926 16,304 18,207 Capital expenditures 32,092 53,115 28,411 34,090 10,927 Dividends paid 20,468 35,240 33,948 52,446 50,521 Share repurchases 4,991 6,895 29,998 41,809 19,708 Other Supplemental Data and Metrics Number of stores 129 124 122 121 120 Retail square footage at year-end (in 000s) 4,539 4,387 4,363 4,354 4,352 Sales per WAVG retail square foot $ 164 $ 197 $ 241 $ 232 $ 173 Average ticket (5) $ 3,371 $ 3,278 $ 3,171 $ 2,865 $ 2,482 Net sales (decrease) increase (%) (16.1 %) (17.7 %) 3.4 % 35.4 % (6.7) % Comparable store sales (decrease) increase (%) (16.7 %) (18.4 %) 3.4 % 17.9 % 5.0 % Employees 2,334 2,574 2,831 2,845 2,766 (1) Stores were closed and delivery operations were paused for approximately six weeks due to COVID-19.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Form 10-K for the year ended December 31, 2022. Industry The retail residential furniture industry’s results are influenced by the overall strength of the economy, new and existing housing sales, consumer confidence, spending on large ticket items, interest rates, and availability of credit.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Form 10-K for the year ended December 31, 2023. Industry The retail residential furniture industry’s results are influenced by the overall strength of the economy, new and existing housing sales, consumer confidence, spending on large ticket items, interest rates, and availability of credit.
The discussion in this Form 10-K generally focuses on the year ended December 31, 2023 compared to the year ended December 31, 2022. A discussion of our results of operations and changes in financial condition for the 2022 year compared to 2021 has been excluded from this report, but can be found in Part II, Item 7.
The discussion in this Form 10-K generally focuses on the year ended December 31, 2024 compared to the year ended December 31, 2023. A discussion of our results of operations and changes in financial condition for the 2023 year compared to 2022 has been excluded from this report, but can be found in Part II, Item 7.
Administrative expenses are comprised of compensation costs for store personnel exclusive of sales team members, information systems, executive, accounting, merchandising, advertising, supply chain, real estate and human resource departments. 21 Table of Contents We classify our SG&A expenses as either variable or fixed and discretionary.
Administrative expenses are comprised of compensation costs for store personnel exclusive of sales team members, information systems, executive, accounting, merchandising, advertising, supply chain, real estate and human resource departments. 23 Table of Contents We classify our SG&A expenses as either variable or fixed and discretionary.
WAVG square footage is a daily WAVG based on the ratio of the days open in a period to the total days in the period. 19 Table of Contents Results of Operations The table and discussion below should be read in conjunction with our consolidated financial statements and related notes included in this report.
WAVG square footage is a daily WAVG based on the ratio of the days open in a period to the total days in the period. 21 Table of Contents Results of Operations The table and discussion below should be read in conjunction with our consolidated financial statements and related notes included in this report.
See Note 5, “Credit Arrangement” of the Notes to Consolidated Financial Statements for information about our Credit Agreement. 22 Table of Contents Leases We use operating leases to fund a portion of our real estate, including our stores, distribution centers, and store support space.
See Note 5, “Credit Arrangement” of the Notes to Consolidated Financial Statements for information about our Credit Agreement. 24 Table of Contents Leases We use operating leases to fund a portion of our real estate, including our stores, distribution centers, and store support space.
Long-Term Debt We currently have a $80.0 million revolving credit facility (the "Credit Agreement") with a bank. As of December 31, 2023, we had no outstanding borrowings and $80.0 million of available borrowings under the Credit Agreement. The Credit Agreement matures October 24, 2027.
Long-Term Debt We currently have a $80.0 million revolving credit facility (the "Credit Agreement") with a bank. As of December 31, 2024 , we had no outstanding borrowings and $80.0 million of available borrowings under the Credit Agreement. The Credit Agreement matures October 24, 2027.
Our focus is to serve our customers better and distinguish ourselves in the marketplace. 18 Table of Contents Key Performance Indicators We evaluate our performance based on several key metrics which include net sales, comparable store sales and written comparable store sales; sales per weighted average square foot; gross profit, selling, general and administrative costs as a percentage of sales; operating income; cash flow; and earnings per share.
Our focus is to serve our customers better and distinguish ourselves in the marketplace. 20 Table of Contents Key Performance Indicators We evaluate our performance based on several key metrics which include store traffic, conversion rates, net sales, comparable store sales and written comparable store sales; sales per weighted average square foot; gross profit, selling, general and administrative costs as a percentage of sales; operating income; cash flow; and earnings per share.
Our products are selected to appeal to a middle to upper-middle income consumer across a variety of styles. Our commissioned sales team members receive a high level of product training and are provided a number of tools with which to serve our customers. We also have ove r 110 in‑home designers serving most of our stores.
Our products are selected to appeal to a middle to upper-middle income consumer across a variety of styles. Our commissioned sales team members receive a high level of product training and are provided a number of tools with which to serve our customers. We also have over 120 in‑home designers serving most of our stores.
(7) Average ticket is calculated by dividing total sales by the number of orders. 20 Table of Contents Net Sales The following outlines our sales and comp-store sales increases and decreases for the periods indicated.
(5) Average ticket is calculated by dividing total sales by the number of orders. 22 Table of Contents Net Sales The following outlines our sales and comp-store sales increases and decreases for the periods indicated.
We may also return excess cash to shareholders in the form of share repurchases or special cash dividends. We expect capital expenditures of approximately $32.0 million in 2024 to support our operations and strategic expansion, however these plans are subject to other potential opportunities, the economic environment, general business conditions and our financial performance.
We may also return excess cash to shareholders in the form of share repurchases or special cash dividends. We expect capital expenditures of approxima tely $27.1 million in 2025 to support our operations and strategic expansion, however these plans are subject to other potential opportunities, the economic environment, general business conditions and our financial performance.
At December 31, 2023 , we had aggregate lease obligations of $217.8 million, with $37.4 million payable within 12 months. See Note 8, “Leases” of the Notes to Consolidated Financial Statements for further discussion of our operating leases.
At December 31, 2024 , we had aggregate lease obligations of $218.4 million, with $36.3 million payable within 12 months. See Note 8, “Leases” of the Notes to Consolidated Financial Statements for further discussion of our operating leases.
We have reviewed our accounting estimates, and none were deemed to be considered critical for the accounting periods presented.
We have reviewed our accounting estimates, and none were deemed to be considered critical for the accounting periods presented. 26 Table of Contents
(Approximate in thousands) Proposed 2024 2023 2022 2021 Stores: New or replacement stores (1) $ 17,000 $ 9,300 $ 7,700 $ 7,000 Remodels/expansions 3,500 2,500 4,400 4,300 Other improvements 6,700 6,900 6,600 4,500 Total stores 27,200 18,700 18,700 15,800 Distribution (1) 2,300 32,400 6,900 15,300 Information technology 2,500 2,000 2,800 3,000 Total $ 32,000 $ 53,100 $ 28,400 $ 34,100 (1) In 2023 we purchased one distribution facility that was previously leased and in 2021 we purchased one retail location and one distribution facility that were previously leased.
(Approximate in thousands) Proposed 2025 2024 2023 2022 Stores: New or replacement stores $ 15,800 $ 18,000 $ 9,300 $ 7,700 Remodels/expansions 1,200 4,600 2,500 4,400 Other improvements 5,700 4,700 6,900 6,600 Total stores 22,700 27,300 18,700 18,700 Distribution (1) 1,800 2,900 32,400 6,900 Information technology 2,600 1,900 2,000 2,800 Total $ 27,100 $ 32,100 $ 53,100 $ 28,400 (1) In 2023 we purchased one distribution facility that was previously leased.
We made cash payments of $6.9 million for repurchases of approximately 227,000 shares of our Common Stock through open market purchases during 2023 and there is approximately $13.1 million at December 31, 2023 that may yet be purchased under the existing authorization. Cash Flows Summary Operating Activities. Cash flow generated from operations provides us with a significant source of liquidity.
We made cash payments of $5.0 million for repurchases of 214,500 shares of our Common Stock through open market purchases during 2024 and there is approximately $8.1 milli on at December 31, 2024 that may yet be purchased under the existing authorization. Cash Flows Summary Operating Activities. Cash flow generated from operations provides us with a significant source of liquidity.
Net cash provided by operating activities in 2023 was $97.2 million driven primarily by net income of $56.3 million and non-cash adjustments to net income of $26.7 million consisting primarily of depreciation and amortization and stock-based compensation expense, and by working capital changes driven primarily by a $24.4 million decrease in inventories partly offset by a $12.1 million reduction in customer deposits.
The changes in working capital were driven primarily by a $10.5 million decrease in inventories, a $7.0 million decrease in other assets and liabilities, and a $4.9 million increase in customer deposits offset by a $11.4 million decrease in accrued liabilities and vendor repayments. 25 Table of Contents Net cash provided by operating activities in 2023 was $97.2 million driven primarily by net income of $56.3 million and non-cash adjustments to net income of $26.7 million consisting primarily of depreciation and amortization and stock-based compensation expense, and by working capital changes driven primarily by a $24.4 million decrease in inventories partly offset by a $12.1 million reduction in customer deposits.
Liquidity and Capital Resources At December 31, 2023 , we had $120.6 million in cash and cash equivalents, and $7.1 million in restricted cash equivalents. See Note 1 to our consolidated financial statements for further discussion of our restricted cash equivalents.
See Note 7, “Income Taxes” of the Notes to Consolidated Financial Statements for further information about our income taxes. Liquidity and Capital Resources At December 31, 2024 , we had $120.0 million in cash and cash equivalents, and $6.3 million in restricted cash equivalents. See Note 1 to our consolidated financial statements for further discussion of our restricted cash equivalents.
In addition, our growth strategy includes the expansion of our retail operations to increase our footprint within our distribution network. The Company’s strategies for profitability include gross margin focus, targeted marketing initiatives, productivity and process improvements, and efficiency and cost-saving measures.
In addition, our growth strategy includes the expansion of our retail operations to increase our footprint within our distribution network. The Company’s strategies for profitability include increasing sales volume, maintaining strong gross margins, implementing targeted marketing initiatives, improving productivity and processes, and adopting efficiency and cost-saving measures.
(4) Includes special dividends of $1.00 for Common Stock and $0.95 for Class A Common Stock paid in the fourth quarter of 2023 and 2022, and $2.00 for Common Stock and $1.90 for Class A Common Stock paid in the fourth quarter of 2021 and 2020. (5) We adopted ASC 840 effective January 1, 2019.
(3) Includes special dividends of $1.00 for Common Stock and $0.95 for Class A Common Stock paid in the fourth quarter of 2023 and 2022, and $2.00 for Common Stock and $1.90 for Class A Common Stock paid in the fourth quarter of 2021 and 2020. (4) We have no funded debt.
(Amounts and percentages may not always add to totals due to rounding.) December 31, 2023 2022 Net Sales Comp-Store Sales Net Sales Comp-Store Sales Period Ended Dollars in millions % Increase (decrease) over prior period % Increase (decrease) over prior period Dollars in millions % Increase (decrease) over prior period % Increase (decrease) over prior period Q1 $ 224.8 (5.9) % (6.7) % $ 238.9 1.0 % 0.2 % % Q2 206.3 (18.5) (19.1) 253.2 1.3 1.1 Q3 220.3 (19.7) (20.7) 274.5 5.4 6.3 Q4 210.7 (24.9) (25.5) 280.6 5.5 5.7 Year $ 862.1 (17.7) % (18.4) % $ 1,047.2 3.4 % 3.4 % % Sales in 2023 were below the record levels of the previous two years.
(Amounts and percentages may not always add to totals due to rounding.) December 31, 2024 2023 Net Sales Comp-Store Sales Net Sales Comp-Store Sales Period Ended Dollars in millions % Increase (decrease) over prior period % Increase (decrease) over prior period Dollars in millions % Increase (decrease) over prior period % Increase (decrease) over prior period Q1 $ 184.0 (18.1) % (18.5) % $ 224.8 (5.9) % (6.7) % Q2 178.6 (13.4) (13.6) 206.3 (18.5) (19.1) Q3 175.9 (20.2) (20.5) 220.3 (19.7) (20.7) Q4 184.4 (12.5) (13.7) 210.7 (24.9) (25.5) Year $ 722.9 (16.1) % (16.7) % $ 862.1 (17.7) % (18.4) % Net sales in 2024 decreased $139.2 million or 16.1% compared to 2023.
The following table outlines our SG&A expenses by classification: 2023 2022 (In thousands) % of Net Sales % of Net Sales Variable $ 170,472 19.8 % $ 193,675 18.5 % Fixed and discretionary 285,340 33.1 292,623 27.9 $ 455,812 52.9 % $ 486,298 46.4 % Our SG&A costs as a percent of sales for 2023 were 52.9% versus 46.4% in 2022.
The following table outlines our SG&A expenses by classification: 2024 2023 (In thousands) % of Net Sales % of Net Sales Variable $ 139,859 19.4 % $ 170,472 19.8 % Fixed and discretionary 279,362 38.6 285,340 33.1 $ 419,221 58.0 % $ 455,812 52.9 % Our SG&A costs as a percent of sales for 2024 were 58.0% versus 52.9% in 2023.
(2) Includes impairment loss of $2.4 million, or $1.8 million after tax, on a retail store in 2019 which impacted diluted earnings per share $0.09. (3) Includes gain of $31.6 million on a sale-leaseback transaction in 2020 which impacted diluted earnings per share $1.24.
(2) Includes gain of $31.6 million on a sale-leaseback transaction in 2020 which impacted diluted earnings per share $1.24.
Net cash provided by operating activities in 2022 was $51.0 million driven primarily by net income of $89.4 million and non-cash adjustments to net income of $25.8 million consisting primarily of depreciation and amortization and stock-based compensation expense, and by working capital changes driven primarily by a $50.9 million reduction in customer deposits. 23 Table of Contents Investing Activities.
Net cash provided by operating activities in 2024 was $58.9 million driven primarily by net income of $20.0 million and non-cash adjustments to net income of $27.9 million consisting primarily of depreciation and amortization, stock-based compensation expense and changes in working capital.
Design consultant engagement increased in 2023 and accounted for 28.5% of our 2023 sales, with an average written ticket of $6,486. Merchandise sales for most categories have returned to their historical pre-COVID percentages of total sales, with the exception of mattresses. (See Note 2, "Revenues and Segment Reporting" of the Notes to Consolidated Financial Statements).
Design consultant engagement increased in 2024 and accounted for 33.6% of our 2024 total written sales, with an average written ticket of $7,222. (See Note 2, "Revenues and Segment Reporting" of the Notes to Consolidated Financial Statements).
SG&A dollars decreased $30.5 million, or 6.3%, for 2023 compared to 2022. The change is driven by the reduction in sales and lower variable costs and less leveraging of fixed costs. Our selling expenses were $14.1 million lower, inclusive of an $0.8 million increase in third-party credit costs due to rate increases.
SG&A dollars decreased $36.6 million, or 8.0%, for 2024 compared t o 2023 . The change was driven by the reduction in sales, lower variable costs, and less leveraging of fixed costs. Our selling expenses decreased $18.5 million, largely due to lower commissioned-based compensation and third-party creditor costs.
Cash used in investing activities in 2023 consisted primarily of $53.1 million of capital expenditures. Cash used in investing activities in 2022 primarily reflected $28.4 million of capital expenditures. Financing Activities. Cash used in financing activities in 2023 consisted primarily of $19.1 million of quarterly cash dividends, $16.1 of special cash dividends, and $6.9 million of share repurchases.
Investing Activities. Cash used in investing activities in 2024 consisted primarily of $32.1 million of capital expenditures. Cash used in investing activities in 2023 primarily reflected $53.1 million of capital expenditures. Financing Activities. Cash used in financing activities in 2024 consisted primaril y of $20.5 million of quarterly cash dividends and $5.0 million of share repurchases.
Warehouse costs include supplies, depreciation, and rental charges for equipment. Advertising expenses are primarily media production and space expenditures, direct mail costs, market research expenses and agency fees.
Occupancy costs include rents, depreciation charges, insurance and property taxes, repairs and maintenance expense and utility costs. Delivery costs include personnel, fuel costs, and depreciation and rental charges for rolling stock. Warehouse costs include personnel, supplies, depreciation, and rental charges for equipment. Advertising expenses are primarily TV and digital media production and space expenditures, market research expenses and agency fees.
Comp-store sales, total written sales and written comp-store sales are intended only as supplemental information and are not a substitute for net sales presented in accordance with US GAAP. Sales per weighted average (“WAVG”) square foot is calculated by dividing net sales by WAVG square footage.
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 are not a substitute for net sales presented in accordance with US GAAP.
Selling expenses are primarily comprised of compensation of sales team members and sales support staff, and fees paid to credit card and third-party finance companies. Occupancy costs include rents, depreciation charges, insurance and property taxes, repairs and maintenance expense and utility costs. Delivery costs include personnel, fuel costs, and depreciation and rental charges for rolling stock.
Selling, General and Administrative Expenses SG&A expenses are comprised of five categories: selling, occupancy, delivery and certain warehousing costs, advertising, and administrative. Selling expenses are primarily comprised of compensation of sales team members and sales support staff, and fees paid to credit card and third-party finance companies.
Our total administrative expenses were basically unchanged for 2023 compared to 2022 as lower compensation costs were offset by higher professional service fees. Interest (Income) Expense, Net We earned $3.9 million more interest income, net of interest expense, in 2023 than in 2022 due to higher rates paid on cash, cash equivalents, and restricted cash equivalents.
Interest (Income) Expense, Net We earned $0.6 million more interest income, net of interest expense, in 2024 than in 2023 due to higher rates paid on cash, cash equivalents, and restricted cash equivalents. Provision for Income Taxes Our effective tax rate was 23.7% in 2024 compared to 22.5% in 2023.
Gross profit as a percentage of net sales was 60.7% in 2023 compared to 57.7% in 2022. The increase of 300 basis points was primarily due to reductions in freight and product costs.
Gross profit as a percentage of net sales was 60.7% in 2024 and 2023. The positive impact generated from the change in the LIFO reserve decreased by $8.6 million to $0.8 million in 2024. Excluding the impact of LIFO, our gross profit margins increased 100 basis points due to product selection and merchandising mix.
Consumers have returned to their historical shopping patterns of concentrating spending around traditional holiday events and our in-store traffic has declined, particularly outside these peak periods. Our sales associates and design consultants are providing excellent service to each customer, and average ticket value was up 3.4% over last year.
The housing recession, inflationary pressures, and cautious consumer spending due to economic uncertainty contributed to the sales decline. Our sales associates and design consultants are providing excellent service to each customer. The average ticket value in 2024 was $3,371, up 3.0% over last year.
Cash used in financing activities in 2022 primarily reflected $17.9 million of quarterly cash dividends, $16.1 of special cash dividends, and $30.0 million of share repurchases. Store Expansion and Capital Expenditures We have entered new markets and made continued improvements and relocations of our store base.
Cash used in financing activities in 2023 primarily reflected $19.1 million of quarterly cash dividends, $16.1 of special cash dividends, and $6.9 million of share repurchases. Our investing activities in stores and operations in 2024 , 2023 and 2022 and planned outlays for 2025 are categorized in the table below.
Removed
The lag time between customers' order placement and delivery grew in 2020 and continued through mid-2022 due to disruptions in supply chain and demand that outpaced merchandise supply but normalized in 2023. As a retailer, comp‑store sales and written comp‑store sales are an indicator of relative customer spending and store performance.
Added
Sales per weighted average (“WAVG”) square foot is calculated by dividing net sales by WAVG square footage.
Removed
The cumulative effect included a reduction of property and equipment, net of $53,519,000. Amortization of buildings under lease was included in depreciation expense. (6) We have no funded debt.
Added
Warehouse, delivery, and transportation expenses decreased $13.7 million from 2023 to 2024, primarily due to reduced personnel levels and lower variable transportation and fuel costs. Our administrative expenses decreased $6.4 million from 2023 due to lower salary and stock-based compensation costs. Advertising expenses decreased $3.0 million from 2023 to 2024, aligning with the reduction of sales.
Removed
The soft housing market has contributed to the slowing pace of sales along with persistent inflationary pressures and shifts in consumer spending. During the first quarter of 2023 we benefited from the delivery of previously written orders.
Added
Occupancy costs increased $5.6 million, primarily due to increased depreciation expense and a $3.3 million reduction of rent expense in the prior year, which was attributed to an incentive to vacate a property before the end of its lease term.
Removed
The change in the LIFO reserve generated a positive impact on gross profit of $9.4 million for 2023 compared to a negative impact of $10.8 million in 2022. Selling, General and Administrative Expenses SG&A expenses are comprised of five categories: selling, occupancy, delivery and certain warehousing costs, advertising, and administrative.
Removed
Warehouse, delivery, and transportation expenses declined $10.2 million from 2022 to 2023 as we adjusted personnel levels, fuel prices fell, and our accessorial charges declined. Advertising expenditures were $7.9 million lower in 2023 compared to 2022 and our occupancy costs were relatively flat.
Removed
Provision for Income Taxes Our effective tax rate was 22.5% in 2023 compared to 25.2% in 2022. The rates vary from the U.S. federal statutory rate primarily due to state income taxes. See Note 7, “Income Taxes” of the Notes to Consolidated Financial Statements for further information about our income taxes.
Removed
The following outlines the change in our selling square footage for each of the three years ended December 31 (square footage in thousands): 2023 2022 2021 Store Activity: # of Stores Square Footage # of Stores Square Footage # of Stores Square Footage Opened 4 110 3 97 2 44 Closed 2 86 2 88 1 42 Year end balances 124 4,387 122 4,363 121 4,354 The following table summarizes our store activity in 2023 and current plans for 2024.
Removed
Location Opening (Closing) Quarter Actual or Planned Category Durham, NC Q-1-23 Open Atlanta, GA Q-3-23 Closure - Outlet Charlotte, NC Q-4-23 Open Dayton, OH Q-4-23 Open Dallas, TX Q-4-23 Closure Richmond, VA Q-4-23 Open - Outlet Pine Bluff, AR Q-1-24 Closure Memphis, TN Q-1-24 Open Destin, FL Q-2-24 Open Tampa, FL Q-2-24 Open Miami, FL Q-3-24 Open To Be Announced Q-4-24 Open Assuming the new stores open and existing stores close as planned, the above activity and other changes should increase net selling space in 2024 approximately 2.8% compared to 2023. 24 Table of Contents Our investing activities in stores and operations in 2023 , 2022 and 2021 and planned outlays for 2024 are categorized in the table below.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−1 removed2 unchanged
Biggest changeDuring 2023 and 2022 , we had no outstanding borrowings under our Credit Agreement (as discussed in Note 5 to the Consolidated Financial Statements), which bears interest based on variable rates. 25 Table of Contents
Biggest changeWe do not believe that an increase or decrease in interest rates of 100 basis points would have a material effect on our operating results or financial condition. During 2024 and 2023 , we had no outstanding borrowings under our Credit Agreement (as discussed in Note 5 to the Consolidated Financial Statements), which bears interest based on variable rates.
Removed
We do not believe that an increase or decrease in interest rates of 100 basis points would have a material effect on our operating results or financial condition.

Other HVT 10-K year-over-year comparisons