Q1 2024 Haverty Furniture Companies Inc Earnings Call

Operator: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Haverty's first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Should you require operator assistance during the conference, please press star zero to signal an operator. Please note this conference is being recorded. I will now turn the conference over to your host, Richard Hare, Chief Financial Officer.

Good morning, ladies and gentlemen, and thank you for standing by.

Richard B. Hare: Welcome to have reached first quarter 2024 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation should you require operator assistance during the conference. Please press star zero to signal an operator. Please note. This conference is being recorded I will now turn the conference over to your host.

Operator: Richard Hare, Chief Financial Officer.

Richard B. Hare: Thank you, operator. During this conference call, we'll make forward-looking statements that are subject to risk and uncertainty. Actual results may differ materially from those made or implied in such statements, which speak only as of the date they are made and which we undertake no obligation to publicly update or revise. Factors that could cause actual results to differ include economic and competitive conditions and other uncertainties detailed in the company's reports filed with the SEC. Our Chairman and CEO, Clarence Smith, will now give you an update on our results, and our President, Steve Burdette, will provide additional commentary on our business.

Richard B. Hare: Thank you operator during this conference call, we will make forward looking statements, which are subject to risks and uncertainties.

Richard B. Hare: Actual results may differ materially from those made or implied in such statements, which speak only as the date. They are made and which we undertake no obligation to publicly update or revise factors that could cause actual results to differ.

Richard B. Hare: Economic and competitive conditions and other uncertainties detailed in the company's reports filed with the SEC.

Richard B. Hare: Our chairman and CEO Clarence Smith will now give you an update on our results and our president Steve Burdick, who will provide additional commentary about our business.

Steven G. Burdette: Thank you for joining our first quarter conference call.

Clarence H. Smith: Thank you for joining our first quarter conference call. Our Q1 sales were down 18.1% to $184 million, with comparable store sales down 18.5%, and total written sales were down 12.6%.

Clarence H. Smith: Q1 sales were down 18, 1% to $184 million with comparable store sales down 18, 5%.

Clarence H. Smith: Total written sales were down 12, 6% that.

Clarence H. Smith: We continued with strong gross margins at 60.3% and control costs, which allowed us to produce a pre-tax profit of $3.2 million compared to $15.4 million in last year's Q1. We're well-prepared for the Memorial Day event, the most important of the first half, with energized marketing plans and an exciting lineup of new products, excellent balanced inventories, and new in-store signage. Our board approved a 6.7% increase in our quarterly dividend, which is our 12th year of consistent dividend increases. Haverty's has paid a dividend every year since 1935.

Clarence H. Smith: We continued with strong gross margins of 63% and control cost, which allowed us to produce a pretax profit of $3 $2 million compared to $15 4 million in last year's Q1.

Clarence H. Smith: We are well prepared for the memorial day event. The most important of the first half with energized marketing plans and an exciting lineup of new products excellent balanced inventories of new in store signage.

Clarence H. Smith: Our board approved a six 7% increase in our quarterly dividend, which is our 12th year of consistent dividend increases.

Clarence H. Smith: <unk> has paid a dividend every year since 1935 or.

Clarence H. Smith: Our strong balance sheet, with over a hundred million dollars in cash, allows us to return capital to our shareholders and invest in infrastructure and stores in our market. In 139 years of furnishing homes throughout our regions, Haverty's has consistently gained market share, especially in difficult times. The fall off in furniture demand following the dramatic sales increases due to COVID has had a major impact on the industry. The industry struggled to supply timely furniture deliveries in the gangbuster years during COVID.

Clarence H. Smith: A strong balance sheet with over $100 million in cash allows us to return capital to our shareholders and invest in infrastructure and stores in our markets.

Clarence H. Smith: And 139 years of furnishing homes throughout our regions. However, these has consistently gained market share, especially in difficult times.

Clarence H. Smith: The falloff in furniture around following the dramatic sales increase was due to Covid has had a major impact on the industry.

Clarence H. Smith: The industry has struggled to supply timely furniture deliveries in the gangbuster years during COVID-19.

Clarence H. Smith: But once that backlog cleared up, we experienced a significant negative impact throughout the industry. We pulled forward roughly two years of sales and then experienced a two-year slide back to pre-COVID. This time, there will be many players who won't survive the recovery.

Clarence H. Smith: Once that backlog cleared up we experienced a significant negative impact throughout the industry.

Clarence H. Smith: We pulled forward roughly two years of sales and then experienced a two year slide back to pre COVID-19.

Clarence H. Smith: This time, there will be many players who won't survive the recovery.

Clarence H. Smith: Okay.

Clarence H. Smith: While the first weakness was felt at the lower end of the market, it has impacted the entire industry, and we believe that that will continue until housing begins to edge back positively. Home sales in the South have a very high correlation to our business. Clearly, interest rates are a major factor in health.

Clarence H. Smith: While the first weakness was felt at the lower end of the market. It has impacted all of the industry and we believe that that will continue until housing begins to edge back positive.

Clarence H. Smith: Home sales in the south have a very high correlation to our business.

Clarence H. Smith: Clearly interest rates are a major factor in housing.

Clarence H. Smith: In the past year, we've seen numerous furniture failures of many.

Clarence H. Smith: In the past year, we've seen numerous furniture failures by major manufacturers and retailers due to the demand slot, and we expect to see more competitors struggle and players fail. These are times when it becomes clear that this industry, closely tied to housing, cannot handle heavy debt leverage. Major debt positions combined with higher interest rates are a fast slide to bankruptcy in the furniture world. We have zero funded debt and are strongly positioned in the best states and fastest growing markets in the country.

Clarence H. Smith: Major manufacturers and retailers with the demand slot and we expect to see more competitors struggling and players fail.

Clarence H. Smith: These are times when it becomes clear that this industry closely tied to housing cannot handle every debt leverage.

Clarence H. Smith: Major debt positions combined with higher interest rates as a fast slide the bankruptcy and the furniture world.

Clarence H. Smith: We have zero funded debt.

Clarence H. Smith: And are strongly positioned in the best states and fastest growing markets in the country.

Clarence H. Smith: We believe that we are uniquely well positioned to continue to grow our market share in these important growth areas in the coming years. We're investing in store growth and upgrading our stores and operating systems to better serve our customers. We have a couple of major remodeling projects underway in major markets, which should be completed by next month. We believe in financial resilience for sustained financial growth.

Clarence H. Smith: We believe that we are uniquely well positioned to continue to grow our market share in these important growth areas in the coming years.

Clarence H. Smith: We're investing in store growth and upgrading our store and operating systems to better serve our customers.

Clarence H. Smith: We have a couple of major remodeling projects underway in major markets, which should be completed by next month.

Clarence H. Smith: We believe in financial resilience for sustained financial growth.

Clarence H. Smith: We're on track to reach our goal of opening five new stores this year and five in 2025. I recently attended our new store opening in South Haven, Mississippi, entering our 17th state and a major growth suburb of Memphis, Tennessee. South Haven was the first store opening of four from former Bed Bath & Beyond stores, which will allow us to gain strong locations and market areas where we have not been able to find sites. In the next three months, we will be opening stores in three markets in Florida. Destin, central to the Emerald Coast.

Clarence H. Smith: We're on track to reach our goal of opening five new stores this year and 5% in 2025.

Clarence H. Smith: I recently attended our new store opening in South Haven, Mississippi, entering our 17th state and a major growth suburb of Memphis, Tennessee.

Clarence H. Smith: South Haven was the first store opening of four from former bed Bath and beyond stores, which will allow us to gain strong locations and market areas, where we have not been able to find sites.

Clarence H. Smith: And the next three months, we will be opening stores in three markets in Florida, Destin central to the Emerald coast St. Petersburg submitting the southern coastal site in our Tampa region, and Pembroke Pines, our southern most store in southeast, Florida, reaching into Miami.

Clarence H. Smith: St. Petersburg, the southern coastal site in our Tampa region, and Pembroke Pines, our southernmost store in southeast Florida, reaching into Miami. All these stores are in adjacent markets and locations where we have significant brand awareness, existing distribution, and experience management in place. We know that these strengths, combined with excellent locations at below-market rates, are a solid foundation for success. By Labor Day, we will have 33 stores throughout the Sunshine State, our largest state, followed by Texas, with 22 stores.

Clarence H. Smith: All of these stores are in adjacent markets and locations, where we have significant brand awareness existing distribution and experienced management in place.

Clarence H. Smith: We know that these strengths combined with excellent locations at below market rates for a solid foundation for success.

Clarence H. Smith: By Labor day, we will have 33 stores throughout southern.

Clarence H. Smith: Sean Sunshine State, our largest state followed by Texas with 22 stores.

Clarence H. Smith: We're very excited to announce plans to return to Houston, Texas.

Clarence H. Smith: We're very excited to announce plans to return to Houston, Texas. Haverty's left Houston over 40 years ago, and it is the largest market in our footprint where we do not have stores. We will open our first store in a former Bed Bath & Beyond building in the Woodlands area later this year and follow with the Baybrook Village store in Q1 2025. We expect to have more stores positioned to serve the greater Houston market in the next two years.

Clarence H. Smith: However, these less left Houston over 40 years ago, and it is the largest market in our footprint, where we do not have stores.

Clarence H. Smith: We will open our first store in a former bed Bath and beyond building in the woodlands area. Later this year and follow with the Bay village store in Q1 2025.

Clarence H. Smith: We expect to have more stores positioned to serve the greater Houston market in the next two years.

Clarence H. Smith: We have delivered furniture in the northern suburbs of Houston for many years from our Austin and College station stores.

Clarence H. Smith: We have delivered furniture to the northern suburbs of Houston for many years from our Austin and College Station stores. We believe that we'll be well positioned and well received in Houston, and a major strengthening of our position in Texas. We are investing in brick and mortar, building our team's expertise, growing our design service, upgrading products, and expanding customization and special order capability. All our teams are driven to be the best home furniture company in the country and to gain profitable market share throughout our region. I'll now turn the call over to Steve Burdette, President. Thank you, Clarence, and good morning.

Steven G. Burdette: We believe that we will be well positioned and well received in Houston and a major strengthening of our position in Texas.

Steven G. Burdette: We are investing in brick and mortar building our team's expertise growing our design service upgrading products and expanding customization and special order capabilities.

Steven G. Burdette: All our teams are driven to be the best home furniture in the country and to gain profitable market share throughout our regions.

Clarence H. Smith: I'll now turn the call over to Steve Burdette President.

Steven G. Burdette: You Clarence and good morning.

Steven G. Burdette: Our first quarter results continue to show the headwinds that we are facing with a housing crisis and interest rates. However, we continue to be encouraged by our team's efforts to ensure that Haverty's is furnishing happiness to our customers. Store traffic continues to be a struggle in all markets, however, we did see a slight improvement in February and March and our traffic numbers coming off January, which was impacted by weather. Our design business continues to gain momentum with an increase of over 10% in total dollars for the quarter, driven by our average design ticket increasing over 3%.

Steven G. Burdette: Our first quarter results continue to show the headwinds that we're facing with the housing prices and interest rates. However, we continue to be encouraged by our team's efforts to ensure that <unk> is furnishing happiness to our customers.

Steven G. Burdette: Store traffic continues to be a struggle in all markets. However, we did see a slight improvement in February and March in our traffic numbers coming off January which was impacted by weather.

Steven G. Burdette: Our design business continues to gain momentum with an increase of over 10% in total dollars for the quarter driven by our average design ticket increasing over 3%.

Steven G. Burdette: The number of customers engaging with our design program was up over 19%.

Steven G. Burdette: Our supply chain network continues to operate without any significant disruptions.

Steven G. Burdette: The number of customers engaging with our design program was up over 19%. Meanwhile, our supply chain network continues to operate without any significant disruption. We have been able to negotiate our new freight rates for 2024 beginning in May so that we feel comfortable with our margin projections for the year. Our inventories continue to be in excellent condition, and we're down at quarter-end almost 20% from Q1 2023 and almost 2% from year-end 2023. Our vendors continue to be great partners as lead times remain from four to seven weeks.

Steven G. Burdette: We have been able to negotiate a new freight rates for 2024, beginning in may so that we feel comfortable with our margin projections for the year.

Steven G. Burdette: Our inventories continue to be in excellent condition and were down at quarter and almost 20% from Q1, 2023, and almost 2% from year end 2023.

Steven G. Burdette: Our vendors continue to be great partners as lead times remain from 4% to seven weeks. This has helped to continue to drive our special order business, which was up 13, 5% in dollars for the quarter.

Steven G. Burdette: This has helped to continue to drive our special order business, which was up 13.5% in dollars for the quarter. As you know, we introduced our new marketing campaign, Furnishing Happiness, to include a regret-free experience. This messaging circles around four pillars that we feel are key to our customers' happiness and experience: Choices.

Steven G. Burdette: As you know we introduced our new marketing campaign furnishing happiness to include with our regret free experience.

Steven G. Burdette: This messaging circles around four pillars that we feel are key to our customers' happiness and experience.

Steven G. Burdette: <unk> quality design.

Steven G. Burdette: Service.

Steven G. Burdette: [inaudible] Our concern with the decrease in written business has centered around our decrease in traffic. As a result, we recently made a change in our media planning and buying partners. Effective April 1st, we brought in Carmichael Lynch Media to overhaul our paid media approach. We believe that how they buy, manage, and optimize media will result in better targeting and greater efficiencies, resulting in a higher return on our media investment. Carmichael Lynch Media will partner with EP&Co, our agency of record, to develop impactful communication strategies tailored to increase awareness of Haverty's and our Furnishing Happiness with a Regret-Free Guaranteed campaign.

Steven G. Burdette: Our concern with the decrease in written business has centered around our decrease in traffic.

Steven G. Burdette: As a result, we recent recently made a change in our media planning and buying partner.

Steven G. Burdette: Effective April one we brought in Carmichael Lynch media to overhaul our paid media approach.

Steven G. Burdette: We believe that how they buy manage and optimize media will result in better targeting and greater efficiencies, resulting in a higher return on media investments.

Steven G. Burdette: Carmichael Lynch media will partner with EP and co. Our agency of record to develop impactful communication strategies tailored to increase awareness of <unk> and are furnishing happiness with regret free guarantee campaign.

Steven G. Burdette: Our new media approach will be fully implemented for Memorial Day, our largest promotion in the first half of the year. Additionally, we are focusing on more local store marketing efforts to help complement our paid advertising campaign. We feel this combination of awareness-building media with community-building local store efforts will positively impact traffic. Extending financing will continue to be a part of our holiday promotional events, and we continue to right-size our staffing to match our current conditions through attrition in all areas of the business. Now, we'll turn the call over to Richard.

Steven G. Burdette: Our new media approach will be fully implemented for Morial day, our largest promotion first half of the year.

Richard: Additionally, we are focusing on a more on more local store marketing efforts to help complement our paid advertising campaigns.

Richard: We feel this combination of awareness building media with community building local store efforts will positively impact traffic.

Steven G. Burdette: Extending financing will continue to be a part of our holiday promotional events and we continue to right size, our staffing to match our current conditions through attrition in all areas of the business now I'll turn the call over to Richard.

Richard B. Hare: Thanks Steve, and good morning. In the first quarter of 2024, net sales were $184 million, or an 18.1% decrease over the prior year quarter. Comparable store sales were down 18.5% over the prior year period. However, our gross profit margin increased 120 basis points to 60.3% from 59.1, primarily due to product selection and merchandising mix. SGA expenses decreased $9 million, or 7.6%, to $109.4 million. As a percentage of sales, these costs accounted for 59.4% of sales, up from 52.7% in the prior quarter.

Richard: Thanks, Steve and good morning in the first quarter of 2024 net sales were $184 million.

Richard B. Hare: The 18, 1% decrease over the prior year quarter.

Richard B. Hare: Comparable store sales were down 18, 5% over the prior year period.

Richard B. Hare: Our gross profit margin increased to 120 basis points to 63% from $59, one primarily due to product selection and merchandising mix.

Richard B. Hare: SG&A expenses decreased $9 million or seven 6% to $109 4 million as a percentage of sales. These costs approximated 59, 4% of sales up from 52, 7% in the prior year quarter, we experienced decreased selling costs advertising distribution and transportation.

Richard B. Hare: We experienced decreased selling costs, advertising, distribution, and transportation expenses during the quarter. Our interest income was approximately $1.6 million during the first quarter as we earned more on our cash deposits due to higher interest rates. Income before income taxes decreased $12.2 million to $3.2 million. Our tax expense was $800,000 during the first quarter of 2024, which resulted in an effective annual tax rate of 25.1%. The primary difference in the effective rate and the statutory rate is due to state income taxes and additional tax benefits from the Vesting of Stock Awards during the year.

Richard B. Hare: <unk> expenses during the quarter.

Richard B. Hare: Our interest income was approximately $1 $6 million during the first quarter as we earn more on our cash deposits due to higher interest rates.

Richard B. Hare: Income before income taxes decreased $12 2 million to $3 2 million.

Richard B. Hare: Our tax expense was $800000 during the first quarter of 2024, which resulted in an effective annual tax rate of 25, 1%. The primary difference in the effective rate and statutory rate is due to state income taxes and additional tax benefit from the vesting of stock awards during the year.

Richard B. Hare: Net income for the first quarter of 2024 was $2.4 million, or $0.14 per diluted share on our common stock compared to the net income of $12.4 million, or $0.74 per share, in the comparable quarter last year. Now turning to our balance sheet, at the end of the first quarter, our inventories were $92.1 million, which was down $1.9 million from the year-end balance and down $22.2 million versus Q1 of 2023. At the end of the first quarter, our customer deposits were $40.9 million, which was up $5.1 million from the December 31st, 2023 balance and down $5.5 million versus the Q1 2023 balance sheet.

Richard B. Hare: Net income for the first quarter of 2024 was $2 4 million or <unk> 14 per diluted share on our common stock compared to net income of $12 4 million or <unk> 74 per share in the comparable quarter last year.

Richard B. Hare: Now turning to our balance sheet at the end of the first quarter, our inventories were $92 $1 million, which was down $1 9 million from the year end balance and down $22 2 million versus Q1 of 2023.

Richard B. Hare: At the end of the first quarter, our customer deposits were $49 million, which was up $5 1 million from the December 31, 2023 balance and down $5 $5 million versus the Q1 2023 balance.

Richard B. Hare: We ended the quarter with $111.8 million of cash and cash equivalents, and we had no funded debt on our balance sheet at the end of the first quarter. Looking at some of the uses of our cash flow, CapEx was $6.4 million in the first quarter, and we also paid out $4.8 million of regular dividends. We did not utilize any of our share repurchase program during the first quarter of 2024, and we have approximately $13.1 million of existing authorization in our buyback program. Our earnings release lists out several additional forward-looking statements indicating our future expectations for certain financial metrics. I will highlight a few, but please refer to our press release for additional commentary.

Richard B. Hare: We ended the quarter with $111 $8 million of cash and cash equivalents.

Richard B. Hare: And we have our we had no funded debt on our balance sheet at the end of the first quarter.

Richard B. Hare: Looking at some of the uses of our cash flow Capex was $6 4 million in the first quarter and we also paid out $4 $8 million of regular dividends.

Richard B. Hare: We did not utilize any of our share repurchase program. During the first quarter of 2024, and we have approximately $13 $1 million of existing authorization in our buyback program.

Richard B. Hare: Our earnings release list out several additional forward looking statements, indicating our future expectations on certain financial metrics I will highlight a few but please refer to our press release for additional commentary.

Richard B. Hare: We do expect our gross margins for 2024 to be between 60 and 60.5%. We anticipate gross profit margins will be impacted by current estimates of product and freight costs. Our fixed and discretionary type SG&A expenses for 2024 are expected to be in the $290-$292 million range. The variable type costs within SG&A for 2024 are expected to be in the range of 19.9 to 20.2 percent. Our planned CapEx for 2024 remains at $32 million.

Richard B. Hare: We do expect our gross margins for 2024 to be between 60, and 65%. We anticipate gross profit margins will be impacted by Kurt estimates of product and freight costs.

Richard B. Hare: Our fixed and discretionary type SG&A expenses for 2024 are expected to be in that $290 million to $292 million range.

Richard B. Hare: The variable type costs within SG&A for 2024 are expected to be in the range of $19, 9% to 22%.

Richard B. Hare: Our planned Capex for 2024 remains at $32 million anticipated, new or replacement stores, Remodels and expansions account for $27 million.

Richard B. Hare: Anticipated new or replacement stores, remodels, and expansions account for $27 million. Investments in our distribution network are expected to be two and a half million dollars, and investments in our information technology are expected to be approximately two and a half million dollars. We do expect our anticipated effective tax rate in 2024 to be 26.5%. This projection excludes the impact of vesting of stock awards in any potential new tax legislation.

Richard B. Hare: Investments in our distribution network or expected to be $2 $5 million and investments in our information technology are expected to be approximately $2 5 million.

Richard B. Hare: We do expect our anticipated effective tax rate in 2024 to 26, 5%.

Richard B. Hare: This projection excludes the impact of vesting of stock awards, and any potential new tax legislation.

Speaker Change: This completes my commentary on the first quarter financial results operator, we would like to open up the call for questions at this time.

Operator: This completes my commentary on the first quarter financial results. Operator, we would like to open up the call for questions at this time.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star then 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. If at any time you wish to remove your question from the queue, please press star 2. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Once again, to ask a question, please press star 1. Our first question is from Mickey Legg with the Benchmark Company.

Speaker Change: Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press Star then one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. If at any time you wish to remove your question from the queue. Please press star two for participants using speaker equipment, it may be necessary to pick up here.

Michael Frederick Legg: Handset before pressing the star keys once again to ask a question. Please press star one.

Michael Frederick Legg: Our first question is from Mickey <unk> with the benchmark company.

Michael Frederick Legg: Hey, guys. Good morning, Thanks for taking my questions.

Michael Frederick Legg: Hey guys, good morning. Thanks for taking my questions. I'm just trying to dig into the decision to enter the Houston market again. Maybe you could elaborate on why you chose Houston and the opportunity you see there?

Michael Frederick Legg: That's right.

Michael Frederick Legg: Haig into the decision to enter the Houston market again.

Michael Frederick Legg: Maybe can you elaborate on why you chose you see an opportunity you see there.

Clarence H. Smith: Well, Houston is the largest market that is in our distribution footprint. We used to be there.

Michael Frederick Legg: Well Houston is the largest market that is in our distribution footprint, we used to be there we talked about that and we've been trying to figure out a strategy to come back in for quite a while so we've got one store a main store that we're going into in the woodlands area as a former bed Bath <unk> <unk>.

Clarence H. Smith: And we've been trying to figure out a strategy to come back in for quite a while. So we have one store, a main store that we're going into in the Woodlands area, is a former Bed Bath & Beyond store that we've got under lease, and it's an extraordinarily good lease. The second store down in Baybrook Village is also one of their spin-off companies and is also in a great position. So we know that it's a major market, and we need to have more than a couple of stores.

Clarence H. Smith: Beyond store that we've got under lease and it's an extraordinary good lease the second store down in <unk> village is also one of their spin off companies and also in a great position. So.

Clarence H. Smith: We know that it's a major market and we need to have more than a couple of stores. So we have plans to expand that over the next several years and reach out to the growth areas of Houston.

Clarence H. Smith: So we have plans to expand that over the next several years and reach out to the growth areas of Houston. We can serve it now from our Dallas facility that's in place. We already deliver there, as I mentioned, in the northern markets. It is a terrific, large market where they know who we are, and we can serve it well. And we're finally getting positioned to move back.

Clarence H. Smith: We conserve it now from our Dallas facility Thats in place, we already deliver there as I mentioned in the northern markets.

Clarence H. Smith: It is a terrific large market, where they know who we are and we can serve it well and we're.

Clarence H. Smith: Finally, getting positioned to move back in.

Speaker Change: Great Great Yeah, that's super helpful.

Steven G. Burdette: Great, great. Yeah, that's super helpful. Great to hear. And then, as a follow-up, maybe if you could just comment on the competition and promotion you're seeing out there in the industry, you know, how promotional are some of your competitors getting in this market environment? And then maybe a quick comment on just any price increases you've been able to put in place. Thanks.

Steven G. Burdette: And then as a follow up maybe if you could just comment on the competition and promotion Youre seeing out there in the industry, how promotional or some of your competitors getting in this market environment and then maybe a quick comment on just any price increases you've been able to put in place.

Steven G. Burdette: Yeah, this is Steve. I would tell you we really haven't seen a change in our cadence from a, you know, higher competitor or promotion and, you know, pricing things out. So, we really have not seen a change there or an adjustment. However, as I commented on the last call, we did see credit promotions are being tightened down because of the cost. We have seen that are not being offered on that side of it. So, from that vantage point, we don't see any real changes on that side.

Steven G. Burdette: Yes. This is Steve I would tell you we really haven't seen a change in our the cadence from a higher competitors or promotion.

Steven G. Burdette: Pricing things out so we really have not seen a change there and adjustment commented.

Steven G. Burdette: <unk> commented on the last call. We did see credit promotions are being tightened down the cost of the cost we have seen that are not being offered.

Steven G. Burdette: On that side of it so from that vantage point, we don't see any real changes after that now from our side or as I commented, we made a change in our media partner and we're very excited about that.

Michael Frederick Legg: Now, on our side of it, as I commented, we made a change in our media partner, and we're very excited about that, what that can bring to us, and we're focused on driving traffic. And one thing they're really going to do is look at a plan by market, an individualized plan. Instead of being more of fewer plans, we're going to and basically having individual plans by market that we're really excited about, because Dallas is going to be different than, Birmingham is going to be different than, Tampa. So, we're really excited about that, and we're looking forward to seeing the results of that and what they're going to do for us.

Michael Frederick Legg: And what that can bring to us and we're focused on driving traffic.

Michael Frederick Legg: And one thing they are really going to do is look at our planned bond market.

Michael Frederick Legg: An individualized plan instead of being more of a.

Michael Frederick Legg: Fewer plans were going and basically have an individual plans by market that we're really excited about because dallas is going to be different than Birmingham is going to be different than tablets.

Michael Frederick Legg: We're really excited about that and we're looking forward to seeing the results of that.

Michael Frederick Legg: And what theyre going to do for us.

Speaker Change: Okay, Great. That's all I had thanks for the time guys.

Operator: Great, great. That's all I have. Thanks for the time, guys.

Operator: Guys.

Speaker Change: Thanks Vicki.

Operator: Our next question comes from Anthony <unk> with Sidoti <unk> Company.

Anthony Lebiedzinski: Our next question comes from Anthony Lebiedzinski with Sidoti and Company.

Anthony Lebiedzinski: Good morning, and thank you for taking the questions and nice to see the balance sheet strength here and the dividend increase as well.

Anthony Lebiedzinski: Good morning, and thank you for taking the questions. You know, nice to see the balance sheet strength here and the dividend increase as well. So I know you touched on a little bit, but just wanted to see if you guys could quantify as far as the trends in the written business are concerned. You mentioned that February and March were better than January because of the weather. So if you could just maybe go over the numbers, if you could, and also, I don't know if this is significant to you guys or not, but Easter fell earlier this year than last year. Did that have any notable impact on the business?

Anthony Lebiedzinski: So.

Anthony Lebiedzinski: I know you touched on a little bit, but just wanted to see if you guys can quantify as far as the chunk in the written business. You mentioned that February March was better than January because of the weather.

Anthony Lebiedzinski: So if you could just maybe go over the numbers if you could also.

Anthony Lebiedzinski: This is significant to you guys or not but.

Anthony Lebiedzinski: Easter.

Anthony Lebiedzinski: Earlier this year than last year, the data have any notable impact on the business.

Richard B. Hare: Anthony, it's Richard. Let me hit the written business, and then Steve has got some comments on Easter. But in terms of the cadence, January we were down in written business by almost 20%, a very difficult month. Then, in February we were down about 8%, and then, in March, it improved. We were down about 5%. So you can kind of see how it started out really difficult environment in January, with the improvements in February and

Anthony Lebiedzinski: Anthony It's Richard Let me, let me hit the written business and then as Steve has got some comments on Easter, but in terms of the cadence January we were down in rig business, almost 20% very difficult month.

Richard B. Hare: In February we were down about 8% and then March and improved we were down about 5%. So you can kind of see started out really difficult environment in January with the improvements in February and March.

Steven G. Burdette: Yeah, and the Easter effect was really offset by the leap year effect of February. So we kind of look at those two together when you look at it, Anthony. And if you combine them, I think we were down a little less than 7% combined between the two months. So there were equal days there when you lost Easter, but you picked up leap year.

Steve: Yes, and the Easter effect was really offset by the leap year effect of February So we kind of look at those two together.

Steven G. Burdette: When you look at it Anthony and combine them I think we were down less than 7% combined.

Steven G. Burdette: When the two months so they would equal days, there when you lost Easter, which pickup leap year.

Anthony Lebiedzinski: Got it Okay, Hey, yes, so got about that.

Anthony Lebiedzinski: Okay, I guess I forgot about that, and thanks for pointing that out. So, obviously, a good thing that you're returning to Houston. You do have a strong balance sheet. Would it be possible for you guys, do you think, to accelerate the growth? I know you talked about five stores that you're looking to open this year and next, but again, given the dynamics in the marketplace that are going on now, is there a chance that you could? Smith, Clarence Smith, Richard Hare, Michael Legg, Steven Burdette, Budd Bugatch, Haverty

Anthony Lebiedzinski: Thanks for pointing that out.

Anthony Lebiedzinski: So.

Anthony Lebiedzinski: See you.

Speaker Change: Good thank you.

Anthony Lebiedzinski: Entering Houston.

Anthony Lebiedzinski: You do have a strong balance sheet.

Anthony Lebiedzinski: Would it be possible for you guys as you think.

Anthony Lebiedzinski: To accelerate the growth I know you talked about five stores.

Anthony Lebiedzinski: Are you looking to open this year and next but again given the dynamics in the marketplace.

Anthony Lebiedzinski: That are going on now is there a chance that you may have.

Anthony Lebiedzinski: Celebrate that.

Speaker Change: For years, the pace of store openings I think so it depends on the opportunities as I mentioned, I think theyre going to be more opportunities. We are very good at converting existing space to have most of our growth has been that we open and we will open a new store that's being built when we have to do that.

Clarence H. Smith: I think so. It depends on the opportunities. As I mentioned, I think there are going to be more opportunities. We are very good at converting existing space to Haverty's. Most of our growth has been that way.

Clarence H. Smith: We open, and we'll open a new store that's being built when we have to do that, and there'll be a few of those in the next years we are planning. But I do believe there are going to be more opportunities for us, and we're prepared to do them. We've got a team to do it, and a staff to do it, and we're good at converting. So as those things happen, we're ready.

Clarence H. Smith: And there'll be a few of those in the next years, we are planning, but I do believe theyre going to be more opportunities for us and we're prepared to do it we've got a team to do it.

Clarence H. Smith: A staff to do it and we are.

Clarence H. Smith: And we're going to be ready to jump on them. So, yeah, if you look way back, Anthony, the biggest acquisitions of stores we did were Home Life, that was Sears Home Life done around 2000, and I think we opened 9 or 10 at one time, and we're able to execute that, and that was 20 years ago, so we know we can do it. We just want to make sure they're good opportunities, and we expect that to be there.

Clarence H. Smith: We're good at converting so as those things happen.

Clarence H. Smith: We're ready and we're going to be ready to jump on them. So yeah.

Clarence H. Smith: If you look way back.

Clarence H. Smith: Anthony.

Clarence H. Smith: The biggest acquisitions of stores. We did was they were home life Sears home life done around 2000, and I think we opened nine or 10 at one time.

Clarence H. Smith: And we're able to execute that and that was 20 years ago. So we know we can do it we just want to make sure they're good opportunities, we expect that to be there.

Anthony Lebiedzinski: Alright. Thank you for that and then Steve you mentioned some efforts to right size staffing.

Anthony Lebiedzinski: All right, thank you, Clarence, for that. And then, Steve, you mentioned some efforts to right-size staffing. Did that already take place in the first quarter? Are you looking to do that coming up here, and in which areas of the business? I know you guys did a great job with Smith, Michael Legg, Steven Burdette, Haverty Smith, Richard Hare, Michael Legg, Steven Burdette, Yeah, how should we think about that as far as timing and [inaudible]?

Anthony Lebiedzinski: Already take place in the first quarter are you looking to do that.

Anthony Lebiedzinski: Coming up here in kind of which areas of the business I know you guys did a big.

Anthony Lebiedzinski: <unk>.

Anthony Lebiedzinski: The staffing reduction right off the cobot initially had four years ago that you we hired some people back but.

Anthony Lebiedzinski: How should we think about that as far as timing.

Anthony Lebiedzinski: The potential size as far as personnel reductions.

Steven G. Burdette: I would think about it as it's ongoing and it's fluid, and we're managing it for the business and as we go. So we're constantly looking at that and evaluating that, Anthony. Yeah, and let me add to that, Steve.

Steve: I would think about it is ongoing and it's fluid and we're managing it to the business.

Steven G. Burdette: And as we go so we're constantly looking at that and evaluating that Anthony.

Speaker Change: Let me, let me add to that.

Steven G. Burdette: <unk>.

Richard B. Hare: Anthony, we continue to reassess and evaluate all areas of our business for cost efficiency. So during this past quarter, I believe our headcount was down to 2,487. I think we were down 71 people versus the end of the year. Most of that was in distribution and home delivery. As demand came down, so did the need for additional support there. And generally speaking, in other areas of business, just one in particular, we're evaluating our entire lease portfolio for opportunities for further reduction of expenses.

Clarence: Anthony we continue we always reassess and evaluate all areas of our business for cost efficiencies. So during the during this past quarter I believe our head count was down to 2487.

Richard B. Hare: I think we were down 71 people versus the end of the year. Most of that was in distribution home delivery as the demand came down so did the the need for additional support there.

Richard B. Hare: And just generally speaking in our other areas of business is one in particular.

Richard B. Hare: Evaluating our entire lease portfolio for opportunities for further reduction of expenses.

Richard B. Hare: Looking at all of our retail distribution and corporate leases for areas, where we can.

Richard B. Hare: Get savings and extend the term on certain leases. So it's a constant process.

Anthony Lebiedzinski: Got it and last question for me before I pass it onto others.

Speaker Change: Given where your share prices today, what is your appetite now for share repurchases.

Richard B. Hare: Well, we meet with our board every quarter and we've got a meeting later this.

Richard B. Hare: A few weeks and we evaluated.

Richard B. Hare: Every quarter.

Richard B. Hare: We've got authority now for about $13 million and.

Richard B. Hare: We will get in as it makes sense for us.

Speaker Change: Understood well, thank you very much and Buffalo block Okay. Thank you Anthony.

Richard B. Hare: Our next question is from Budd <unk> with water Tower research.

Richard B. Hare: Good morning, Clara and Steve and Richard.

Richard B. Hare: I know these are challenging times for the industry as you noted Clarence you talked about.

Speaker Change: I'm expecting to see more disruption and we've seen enough of it already are you seeing any of that with your suppliers I know, Steve you mentioned that you've got four to seven weeks and good supply pattern with your suppliers, but I'm just curious to see if.

Anthony Lebiedzinski: You can give us any more color on that.

Richard B. Hare: <unk> be seeing.

Richard B. Hare: I can't say I've seen anything that will impact our direct suppliers.

Richard B. Hare: I must admit I was a little concerned with the litigate.

Richard B. Hare: Release, they're the main player in the industry. It tells you a lot about what the industry is going through there.

Richard B. Hare: But we haven't seen anything that's disruptive.

Richard B. Hare: Our flow of product with our main.

Richard B. Hare: Main suppliers.

Anthony Lebiedzinski: Okay, and you talked about January and February and gave us the cadence on that but.

Richard B. Hare: In conjunction with what you just mentioned and other things that we're hearing aid.

Speaker Change: April has seem to have hit a another real signal significant air pocket and I know you don't like to comment on the current quarter, but I also know you don't want to surprise people either so can you give us a flavor of what youre seeing in the industry now from a macro budd when or how it affects <unk>.

Speaker Change: We both been around a long time and I will say that historically April is the slowest months one of if not the slowest month of the year for a couple of reasons one is because of Easter.

Richard B. Hare: And the other is because of tax season that type of thing tax day.

Richard B. Hare: I don't think youll see anything much different than what we've historically seen about April.

Speaker Change: Okay <unk>.

Richard B. Hare: Ali It made the same comment so by paying the coolest months so yes.

Richard B. Hare: Hi.

Richard B. Hare: I know April.

Richard B. Hare: Easter and Passover, we always used to joke when I was doing what you do.

Richard B. Hare: And it was either later earlier, but it was never on time.

Richard B. Hare: Well the good thing is it is behind us.

Richard B. Hare: Easter hit early so it's behind Us and now we're moving along.

Richard B. Hare: Okay.

Anthony Lebiedzinski: Why do you open up St. Petersburg, just curious from that standpoint.

Richard B. Hare: But we're hoping.

Richard B. Hare: Third quarter mid third quarter.

Richard B. Hare: Hoping to get before labor day, all of the problems have just been getting the approvals from from Florida as you know how difficult it is to get.

Richard B. Hare: Yeah.

Richard B. Hare: Resemble that remark I understand.

Richard B. Hare: We were able to open very quickly our store outside of Memphis, but Florida is a little different.

Anthony Lebiedzinski: I gotcha.

Speaker Change: And last for me on the expense side, Richard and thank you for all the detail on the color you gave and that's really very helpful.

Speaker Change: Help people understand the structure of our furniture retail are you seeing any cost issues that are a worrisome we were starting to see rate issue for the way people are paid so im curious if youre seeing that or how you are what you can give us color on that.

Richard B. Hare: Just say nothing that really keeps me up at night.

Richard B. Hare: Your standard inflationary increases, but they are low single digit Steve I think mentioned it in his opening remarks.

Anthony Lebiedzinski: [inaudible]

Anthony Lebiedzinski: We blocked in our freight contracts, so we get that behind us and things are back to more historical levels there but.

Anthony Lebiedzinski: Got it. And the last question for me before I pass it on to others: so, you know, given where your share price is today, what is your appetite now for share repurchases?

Clarence H. Smith: Well, we meet with our board every quarter, and we've got a meeting later this month in a few weeks. We've got authority now for about $13 million, and we'll get in as it makes sense for us.

Speaker Change: I guess, it's probably not so much a cost problem, but our revenue.

Clarence H. Smith: Revenue issue with the way businesses, but we continuously look at other areas to find cost efficiencies and we will continue to do that.

Anthony Lebiedzinski: Understandable. Well, thank you very much and best of luck. Thank you.

Budd Bugatch: Our next question is from Budd Bugatch with Water Tower Research.

Budd Bugatch: Good morning, Clarence, Steve, and Richard. I know these are challenging times for the industry, as you noted, Clarence, and you talked about expecting to see more disruption, and we've seen enough of that already. Are you seeing any of that with your suppliers? I know, Steve, you mentioned you got four to seven weeks in a good supply pattern with your suppliers, but I'm just curious to see if you can give us any more color that you may be seeing.

Steven G. Burdette: I can't say I've seen anything that will impact our direct suppliers. I must admit I was a little concerned with the Liggett release; they're the main player in the industry. It tells you a lot about what the industry is going through there. But we haven't seen anything that's disrupted our flow of product with our main. [inaudible]

Budd Bugatch: And the freight issue any with Baltimore or any of the turmoil.

Steven G. Burdette: Turmoil in the Ocean.

Steven G. Burdette: Your problems no bad we're not have we do not use the boswell port.

Steven G. Burdette: So that has not caused us will not cause us any disruptions in that.

Steven G. Burdette: The.

Steven G. Burdette: Overseas, what's going on in the Red Sea and all of that that movement is going around.

Steven G. Burdette: Already <unk> already go on a different path, it's just extending the lead time by a couple of weeks, but that's not any impact to our customers. We plan for that we know where it is.

Speaker Change: No disruptions there from to impact our customers. Okay. Thank you very much.

Speaker Change: Best wishes.

Steven G. Burdette: Balance of this year and beyond thank.

Speaker Change: Thank you Bob.

Steven G. Burdette: Okay.

Budd Bugatch: Okay. And you talked about January and February and gave us the cadence on that. But in conjunction with what you just mentioned and other things that we're hearing, April seems to have hit another really significant air pocket. And I know you don't like to comment on the current quarter, but I also know you don't want to surprise people either. So can you give us a flavor of what you're seeing in the industry now, from a macro standpoint, or how it affects Haverty's?

Steven G. Burdette: Our next question is from Cristina Fernandez with Telsey group.

Clarence H. Smith: We've both been around a long time, and I will say that historically, April is the slowest month, if not the slowest month of the year, for a couple of reasons. One is because of Easter, and the other is because of tax season, that type of thing, tax day. I don't think you'll see anything much different than what we've historically seen about

Speaker Change: Hi, Good morning, everyone I wanted to ask about that.

Budd Bugatch: Okay, I mean T.S. Eliot made the same comment about being the coolest month, so yeah, I know April and, you know, Easter and Passover. We always used to joke when I was doing what you do; it was either late or early, but I was never on time.

Budd Bugatch: The industry, our revenue assumptions behind the guidance.

Budd Bugatch: Maybe you can touch on it seems like.

Budd Bugatch: Order trends were gone a little bit better or less worse as the quarter progressing at the same time, you talked about the challenges.

Budd Bugatch: St.

Budd Bugatch: Some business.

Speaker Change: Please go ahead business. So do you think.

Budd Bugatch: We should expect similar trends that we saw in the first quarter or we're getting closer to that point and what that could be at an inflection in demand at some point this year.

Speaker Change: Well, we have we have said that we thought things would be better in the second half I don't know, if we'll feeling that or expect that from what we're hearing from the fed in the marketplace.

Clarence H. Smith: Well, the good thing is that it's behind us. You know, Easter hit early, so it's behind us, and now we're moving on.

Budd Bugatch: Okay. Why don't you open up St. Petersburg?

Budd Bugatch: It is definitely difficult we've been down for a long time and written business.

Budd Bugatch: I think that will be softening up I think it will be less down, but we don't see.

Budd Bugatch: I don't have visibility to the point, where we think it's going to be positive anytime real soon but.

Budd Bugatch: And I think we're saying the same thing in the industry I haven't heard anything positive from other players.

Budd Bugatch: I think it's across the board frankly.

Budd Bugatch: And it's now moved into the better end of the market as I mentioned I mean, it started in the lower and the market has now hit I think it's hit everywhere.

Budd Bugatch: And.

Budd Bugatch: Not a lot of people release retail sales, but.

Budd Bugatch: I think it's a trend that is in place our hope that it turns around soon we're certainly positioned to do that and we hope some of the.

Budd Bugatch: New things that Steve talked about with our new marketing and certainly new merchandise.

Budd Bugatch: Will resonate to help that happen.

Speaker Change: Yeah that makes sense.

Budd Bugatch: Consistent with what we're hearing.

Speaker Change: I wanted to follow up on that point, Steve on the on the marketing side.

Budd Bugatch: Ken.

Dan Moore: Dan Moore.

Budd Bugatch: Where I do a search and it seems like kind of what's changing to what <unk> been doing versus what youre going to do going forward anything else. In addition to that.

Budd Bugatch: I guess market specific.

Budd Bugatch: <unk> been a sea of change seem like medium digital versus.

Speaker Change: Thank you so much.

Speaker Change: <unk> are some of the other channels that you've been traditionally.

Budd Bugatch: Christina we're not going to play our hand, obviously, because we haven't we haven't done it yet I mean, we're just now starting it in our big advertising for the quarter will be around and focused on memorial day.

Speaker Change: But obviously all of those things that you just mentioned around the table I mean, we're looking at it by market to me that's one of the most exciting things.

Budd Bugatch: The villages for example will be different marketing than Atlanta and.

Budd Bugatch: Those type things. So yes, there will be in some markets, we could use print in some markets we may be doing more broadcast.

Budd Bugatch: We will look at it individually and attack it thats, how we can create more awareness.

Budd Bugatch: To drive people into the funnel and get them to our stores. So.

Budd Bugatch: There'll be more to report on that as we go forward with it but we are excited about it they are making changes that are different from our approach that we had been.

Budd Bugatch: Executing out and so thats what.

Budd Bugatch: We will have to see the results as it goes forward.

Budd Bugatch: And the last question I had with some of that merchandising. So last call. There was some talk about.

Budd Bugatch: And the introduction and expansion of that category any comments on the early reads, how that's doing or any other merchandising initiatives. We can track for the rest of the year.

Speaker Change: Hello from an outlook perspective, it is in now.

Budd Bugatch: We got it in and we will guide to say we've got some early results it's not in all our stores.

Budd Bugatch: About little less than half our stores, but the early results have been very positive.

Budd Bugatch: It's two different groups in some fire pits and things with it so it's not a huge assortment better assortment enough that we can satisfy that customers.

Budd Bugatch: A request if they need that.

Budd Bugatch: From a category perspective, we are seeing strength, obviously in upholstery continues to do well I talked about special order business.

Budd Bugatch: Continues to trend up it was up 13, 5%. So we are very excited about that and what our designers are able to provide an option. So we're able to offer our customers from that side of it bedroom.

Budd Bugatch: Bedroom dining room had been a little bit of a struggle been softer than.

Budd Bugatch: We had hoped in the first quarter.

Budd Bugatch: Things in bedding has been pretty stable I would say right now so that kind of gives you.

Budd Bugatch: Kind of an overview, but we do have a lot of new product coming where in that cadence now we've gotten back into that our merchants are flowing new product in <unk>.

Budd Bugatch: We're excited about our teams are excited about it.

Speaker Change: Because obviously that gives you.

Budd Bugatch: New choices for our customers.

Speaker Change: Great. Thank you.

Speaker Change: Thank you Christine.

Budd Bugatch: Gentlemen, there are no further questions at this time I would like to turn the call back to Richard Hayne for closing comments.

Steven G. Burdette: Just curious from that standpoint.

Budd Bugatch: We're hoping for the third quarter, you know, mid-third quarter. Hoping to get it before Labor Day, from Florida, as you know how difficult it is to get. I remember that remark, I understand.

Steven G. Burdette: We were able to open our store very quickly outside Memphis, but Florida's a little different.

Budd Bugatch: I got you. And last for me, on the expense side, Richard, and thank you for all the detail on the color you give, and that's really very helpful to help people understand the structure of furniture retail. Are you seeing any cost issues that are worrisome? We're starting to see rate issues for the way people are paid, so I'm curious if you're seeing that or how you can give us color on that.

Richard B. Hare: Yeah, I would just say nothing that really keeps me up at night, you know, just your standard inflationary increases, but they're low single digits. Steve, I think, mentioned it in his opening remarks that we've locked in our freight contracts, so we've got that behind us, and things are back to more historical levels there. But, you know, I guess it's probably not so much a cost problem but a revenue issue with the way business is. But we continuously look at other areas to find cost efficiencies, and we'll continue to do so.

Steven G. Burdette: And any of the freighters, do any of them deal with Baltimore or any of the turmoil in the oceans giving you problems?

Steven G. Burdette: We do not use the Baltimore Port, so that will not cause us any disruptions. Overseas, what's going on in the Red Sea and all of that that movement going around, you know, already diverted going a different path. It's just extending the lead time by a couple of weeks, but that's not any impact on our customers. We plan for that. We know where it is. So, there will be no disruptions there from, you know, to impact our customers. Thank you very much.

Budd Bugatch: Thank you very much and best of wishes for the balance of this year and beyond.

Speaker Change: Well, we appreciate and thank you for your participation in today's call and we look forward to talking to you in the future when we release our second quarter results later this year.

Cristina Fernndez: Our next question is from Cristina Fernandez of the Telsey Group.

Cristina Fernndez: Hi, good morning, everyone. I wanted to ask about the industry or revenue assumptions behind the guidance and, you know, maybe Clarence, you can touch on that. It seems like, you know, the order trends were, you know, got a little bit better or less worse as the quarter progressed. But at the same time, you talked about the challenges in the industry and, you know, in some businesses, some companies going out of business. So do you think we should expect similar trends as we saw in the first quarter, or are we getting closer to that point where there could be an inflection in the math at some point this year?

Clarence H. Smith: Well, we have said that we thought things would be better in the second half. I don't know if we're feeling that or expecting that from what we're hearing from the Fed and in the marketplace. It is definitely difficult.

Clarence H. Smith: We've been down for a long time in written business. I think that will be softening up. I think it'll be less down, but we don't see... I don't have visibility to the point where we think it's going to be positive anytime real soon. And I think we're saying the same thing in the industry. I haven't heard anything positive from other players.

Steven G. Burdette: So kind of what's changing in what you've been doing versus what you're going to do going forward? Anything else? In addition to the, I guess, market-specific marketing, are we going to see a change in like medium digital versus print? I don't think you do too much print, but perhaps TV or some of the other channels that you've traditionally used?

Clarence H. Smith: I think it's across the board, frankly, and it's now moved into the better end of the market, as I mentioned. I mean, it started in the lower end of the market, but it's now hit everywhere. And not a lot of people release retail sales, but I think it's a trend that is in place. I hope that it turns around soon. We're certainly positioned to do that. And we hope some of the new things that Steve talked about with new marketing and, certainly, new merchandise will resonate to help that happen.

Steven G. Burdette: You know,

Cristina Fernndez: Yeah, that makes sense. And yeah, that seems consistent with what we're hearing. So I wanted to follow up on that point with Steve on the marketing side. Can you explain more on, like, where is the efficiency?

Steven G. Burdette: You know, Christina, we're not going to play our hand, obviously, because we haven't done it yet. I mean, we're just now starting it, and our big advertising for the quarter will be around and focused on Memorial Day. But obviously, all those things that you just mentioned are on the table. I mean, we're looking at it by market. To me, that's one of the most exciting things.

Steven G. Burdette: You know, The Villages, for example, will have different marketing than Atlanta and, you know, those type things. So yes, there will be, in some markets, we could use print. In some markets, we may be doing more broadcast. We will look at it individually and attack it as to how we can create more awareness to, you know, drive people into the funnel and get them to our stores. So there'll be more to report on that as we go forward with it, but we are excited about it. They are making changes that are different from our approach that we had been executing on. So that's what, you know; we'll have to see the results as it goes forward.

Steven G. Burdette: And the last question I had was on merchandising. So, on last call, there was some talk about outdoor and the introduction and expansion of that category. Any comments on the early reach, how that's doing, or any other merchandising initiatives we can track for the rest of the year? Well, from an outdoor perspective, it is in now.

Speaker Change: Thank you. This concludes today's conference you may disconnect your lines at this time.

Steven G. Burdette: Well, from an outdoor perspective, it is in now. We got it in, and we're glad to see it. We've gotten some early results, but it's not in all our stores yet. It's in, you know, about a little less than half our stores, but the early results have been very positive. It's two different groups and some, you know, fire pits and things with them, so it's not a huge assortment, but an assortment enough that we can satisfy that customer's request if they need that.

Steven G. Burdette: You know, from a category perspective, we're seeing strength, obviously, in upholstery. It continues to do well. I talked about how special order business continues to trend up. It was up 13.5%, so we're very excited about that and what our designers are able to provide and the options we're able to offer our customers from that side of it. Bedroom and dining room have been a little bit of a struggle, softer than we had hoped in the first quarter of things, and bedding has been pretty stable, I would say, right now.

Steven G. Burdette: So, that kind of gives you... We do have a lot of new product coming. We are in that cadence now, we have gotten back into that, our merchants are flowing new product in, and we are excited about it, our teams are excited about it, because, obviously, that gives new choices for our customers.

Steven G. Burdette: [music].

Steven G. Burdette: Okay.

Operator: Gentlemen, there are no further questions at this time. I'd like to turn the call back to Richard Hare for closing comments.

Richard B. Hare: Well, we appreciate and thank you for your participation in today's call, and we look forward to talking to you in the future when we release our second quarter results later this year. Thank you, this concludes.

Steven G. Burdette: Mhm.

Operator: Yes.

Richard B. Hare: Okay.

Richard B. Hare: Okay.

Richard B. Hare: Okay.

Richard B. Hare: Okay.

Richard B. Hare: [music].

Richard B. Hare: Okay.

Richard B. Hare: Sure.

Richard B. Hare: Yes.

Richard B. Hare: Okay.

Richard B. Hare: Peter.

Richard B. Hare: Yes.

Richard B. Hare: Okay.

Richard B. Hare: Okay.

Richard B. Hare: Okay.

Richard B. Hare: Okay.

Richard B. Hare: [music].

Richard B. Hare: Okay.

Richard B. Hare: [music].

Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time.

Operator: Smith, Richard Hare, Michael Legg, Steven Burdette, Budd Bugatch, Haverty Smith, Richard

Operator: