Q2 2024 Haverty Furniture Companies Inc Earnings Call
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Operator: Greetings and welcome to the Havardy's second quarter of 2024 earnings call. At this time, I'll participate in a listen-only mode.
Speaker Change: Greetings and welcome to the Haverty's second quarter 2024 earnings call.
Operator: A brief question-and-answer session will follow the formal presentation.
Speaker Change: At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.
Operator: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.
Richard Hare: It is now my pleasure to introduce your host, Richard Hare, Chief Financial Officer.
Operator: Richard Hare, Chief Financial Officer. Thank you, Mr. Hare. You may begin.
It is now my pleasure to introduce your host, Richard Hare, Chief Financial Officer. Thank you, Mr. Hare. You may begin.
Richard Hare: Thank you, Mr. Hare. You may begin.
Richard Hare: Thank you, operator. During this conference call, we'll make four looking statements, which are subject to risks and uncertainties. Actual results may differ materially from those made or implied at such statements, which speak only as of the date they are made and which we undertake no obligation to publicly update or revise.
Richard Hare: Thank you, operator. During this conference call, we'll make forward-looking statements which are subject to risk and uncertainties. Actual results may differ materially from those made or implied at such statements, which speak only as of the date they are made, in which we undertake no obligation to publicly update or revise.
Richard Hare: Actual results may differ materially from those made or implied in such statements, which speak only as of the date they are made, and we undertake no obligation to publicly update or revise.
Richard Hare: 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 Securities and Exchange Commission.
Factors that could cause AXA results to differ include economic and competitive conditions and other uncertainties detailed in the company's reports filed with the Securities and Exchange Commission.
Clarence Smith: Our chairman and CEO, Clarence Smith, will now give you an update on our results, and our President, Steve Burdette, will provide additional commentary. Thank you for joining our second quarter conference call. Total sales were $178.6 million, down 13.4% from last year, but an improvement over the 18.1% decline in the first quarter. We've been proactive in reducing costs for appropriate, and that has helped us produce a pre-tax profit of $6.5 million. Gross margins continue to be strong at 60.4%. Our cash position of over $100 million remains solid and continues to be a major strength. Our balance sheet allows us to continue to invest in future growth opportunities, even in tough times for the industry.
Clarence Smith: Our Chairman and CEO , Clarence Smith, will now give you an update on our results, and our President, Steve Burdette, will provide additional commentary.
Clarence Smith: Thank you for joining us on our second quarter conference call. Our cash position of over $100 million remains solid and continues to be a major strength.
Speaker Change: Thank you for joining our second quarter conference call.
Speaker Change: Total sales were $178.6 million, down 13.4% from last year, but an improvement over the 18.1% decline in the first quarter.
Steve Burdette: We've been proactive in reducing costs where appropriate and that has helped us produce a pre-tax profit of $6.5 million.
Steve Burdette: Gross margins continue to be strong at 60.4%.
Speaker Change: Our cash position of over $100 million remains solid and continues to be a major strength.
Speaker Change: Our balance sheet allows us to continue to invest in future growth opportunities, even in tough times for the industry.
Clarence Smith: We're excited to announce the addition of our second store in Indianapolis in Greenwood, Indiana, which will open late this year. This location will be our fifth new store to open in 2024 and the fifth former Bed Bath & Beyond building. Late this year, we'll open a new store in Pembroke Ponds area in Southeast Florida and a store in St. Petersburg, strengthening our position in the St. Tampa St. Pete region. Both are part of the bedbath and beyond lease acquisition. With these openings, we will have 33 stores serving Florida; our largest state. Our expanded Lakeland, Florida distribution center is ideally located off I-4 and allows for coastal-specific products and quick delivery to the region.
Speaker Change: We're excited to announce the addition of our second store in Indianapolis in Greenwood, Indiana, which will open late this year.
Speaker Change: This location will be our fifth new store to open in 2024 and the fifth former Bed Bath & Beyond building.
Steve Burdette: Late this year, we'll open a new store in Pembroke Pines area in Southeast Florida and a store in St. Petersburg, strengthening our position in the Tampa-St. Pete region.
Clarence Smith: Stringing our position in the Tampa-St. Pete region. With these openings, we will have 33 stores serving Florida, our largest state. And now, our move back to Houston, Texas, will be a significant effort for the coming years.
Speaker Change: Both are part of the Bed Bath & Beyond lease acquisition.
Speaker Change: With these openings, we will have 33 stores serving Florida, our largest state. Our expanded Lakeland Florida Distribution Center is ideally located off I-4 and allows for coastal-specific products and quick delivery to the region.
Clarence Smith: We have been furnishing Texas homes for over a hundred years. Our Austin and College Station stores have been serving the northern part of Houston, and now I move back to Houston, Texas. It will be a significant effort for the coming years. We plan to open in Woodlands, Texas, late this year and add a second store in 2025 in Babebrook, Texas. We will end this year with 22 Texas stores, our second largest state. We're actively working to add stores in the greater Houston market to add density and to support marketing and to build Hybridies brand position.
Speaker Change: We have been furnishing Texas homes for over 100 years.
Speaker Change: Our Austin and College Station stores have been serving the northern part of Houston.
Speaker Change: And now our move back to Houston, Texas will be a significant effort for the coming years.
Speaker Change: We plan to open in Woodlands, TX late this year and add a second store in 2025 in Baybrook, TX.
Clarence Smith: We will end this year with 22 Texas stores, our second largest state. All these stores will be served by our expanded Dallas-Texas Distribution Center, allowing for quick delivery and more western-specific and regional merchandise. We are on target for our goal to open five new stores in 2024 and in 2025, strengthening our service position throughout our 17 states.
Clarence Smith: All these stores will be served by an expanded Dallas, Texas distribution center, allowing for quick delivery and more Western-specific and regional merchandise.
Speaker Change: All these stores will be served by our expanded Dallas, Texas Distribution Center, allowing for quick delivery and more western-specific and regional merchandising.
Clarence Smith: We are on target for our gold, open five new stores in 2024 and in 2025, strengthening our service position throughout our 17 states. We're very pleased with the new merchandise that is hitting our floors, which has quickly moved up to best sellers. We've added several locations to the better end of our line-up, which, along with our enhanced special order and custom products, have helped move design business to 35 percent of sales. These are tough times for a cyclical industry like home furnishings. We're closely tied to housing and interest rates. What we have learned these past decades is the importance of consistent investment and serving and inspiring our customers.
Speaker Change: We are on target for our goal to open five new stores in 2024 and in 2025, strengthening our service position throughout our 17 states.
Clarence Smith: We're very pleased with the new merchandise that is hitting our floors, which has quickly moved up to best sellers. We've added several locations to the better end of our lineup, which, along with our enhanced special order and custom products, have helped move the design business to 35% of sales. We believe that down cycles provide important opportunities when we can make strategic investments for future growth and position Haverty's for significant gains in the months and years ahead. I'll now turn the call over to Steve Burdette.
Speaker Change: What we have learned these past decades is the importance of consistent investment and serving and inspiring our customers.
Clarence Smith: This means new locations, upgrading stores, cutting IT systems, and then, most importantly, investing in talent. And these are expensive commitments and tough times. We believe that the down cycles provide important opportunities when we can make strategic investments for future growth and position haveries for significant gains in the months and years ahead.
Speaker Change: And these are expensive commitments in tough times.
Clarence Smith: I'll now turn the call over to Stupid Up.
Steven Burdette: Thank you, Clarence, and good morning. Our second quarter results face the difficulties of higher interest rates and frozen housing activity. Store traffic in both stores has been robust, and we are pleased with the early results. Overall, our store traffic has continued to improve slightly during the quarter, but we are seeing a more deliberate consumer, which has caused our closing rates to slip. However, those customers that are buying are spending more as our average ticket continues to rise by over 4% to almost $3,500.
Steven Burdette: Thank you, Clarence.
Steven Burdette: Good morning. Our second quarter results face the difficulties of higher interest rates and frozen housing activity.
Stu Burdette: I'll now turn the call over to Stu Burdette. Thank you, Clarence. Good morning. Our second quarter results faced the difficulties of higher interest rates and frozen housing activity. Our Memorial Day event was disappointing, which affected the outcome of the quarter.
Steven Burdette: Our Memorial Day event was disappointing, which affected the outcome of the quarter. We hope the potential interest rate cuts being discussed for the September Fed needing will be a start to getting the housing market moving as we head into 2025.
Steven Burdette: During the quarter, we were excited about the opening of our two new stores in South Haven, Mississippi, which is a part of our Memphis market in Destin, Florida, which is a part of a Pensacola market. Store traffic in both stores has been robust, and we are pleased with the early results. Overall, our store traffic has continued to improve slightly during the quarter, but we are seeing a more deliberate consumer, which has caused our closing race to slip. However, those customers that are buying or spending more as our average ticket continues to rise by over 4% to almost $3,500.
Speaker Change: Store traffic in both stores has been robust, and we are pleased with the early results.
Speaker Change: Overall, our store traffic has continued to improve slightly during the quarter, but we are seeing a more deliberate consumer, which has caused our closing rates to slip.
Stu Burdette: However, those customers that are buying are spending more as our average ticket continues to rise by over 4% to almost $3,500.
Steven Burdette: Our design business continues to be a bright spot by growing over 24% for the quarter as a percentage of our business. Our design and sales teams have been able to increase the number of customers participating in design to almost 19% of our customers, which continues to grow at a double-digit pace. Our average ticket is the driver of our design business as it moves higher to approximately $7,000, which is a 7% increase for the quarter.
Steven Burdette: Our design business continues to be a bright spot by growing over 24% for the quarter as a percentage of our business. This has helped us to drive our special order business, which was up approximately 9% in dollars for the quarter. Stanton Finance continues to be a part of our promotional calendars, but we continue to manage the use and length of terms, which has helped us to lower our credit costs for the quarter by over 16% as a percent of the business.
Stu Burdette: Our design business continues to be a bright spot by growing over 24% for the quarter as a percentage of our business.
Steven Burdette: Our supply chain network continues to operate efficiently, which we feel puts Hybridies at a competitive advantage. We have seen a minimal increase in our freight rates due to the container imbalance and the issues around the Red Sea, but have seen no real disruptions due to our partnerships with our carriers and suppliers. Our inventories continue to remain in excellent condition and will relatively flat with Q1 in approximately 20% down from Q2 to 2023. This gives us confidence that we will be able to maintain our margin guidance for the year. Our vendors continue to provide us with excellent lead times that vary between four to seven weeks.
Steven Burdette: This has helped us to drive our special order business, which was up approximately nine percent in dollars for the quarter. Extended financing continues to be a part of our promotional calendars, but we continue to manage the use and length of terms, which has helped us to lower our credit cost for the quarter by over 16 percent as the percent of the business.
Stu Burdette: This has helped us to drive our special order business, which was up approximately 9% in dollars for the quarter.
Stu Burdette: Extended financing continues to be a part of our promotional calendars, but we continue to manage the use and length of terms which has helped us to lower our credit costs for the quarter by over 16% as a percent of the business.
Steven Burdette: Also, we have been able; we have been continuing to make the necessary adjustments with our head count throughout the organization to ensure that we are right size for the current business conditions. We are optimistic heading into what is historically our largest promotional event of the year, Labor Day.
Steven Burdette: I want to thank all the Haverty team members across the company for their hard work and dedication to furnishing happiness to our customers every day.
Stu Burdette: I want to thank all the Haverty team members across the company for their hard work and dedication to furnishing happiness to our customers every day. Now I'll turn the call over to Richard.
Richard Hare: Now I'll turn the call over to Richard.
Richard Hare: Thank you, Steve. In the second quarter of 2024, net sales were 178.6 million and a 13.4% decrease over the prior year quarter. Comparable store sales were down 13.6% over the prior year period. Our growth profit margin decreased 10 basis points to 60.4% from 60.5%. The decrease was driven by the change in the LIFO reserve, which generated an immaterial impact on gross profit in 2024 compared to a positive impact of 3.4 million in the second quarter of 2023. Excluding the impact of our LIFO reserve, our gross margins increased over 170 basis points over the prior year period.
Richard Hare: Our gross profit margin decreased 10 basis points to 60.4% from 60.5%. Interest income was approximately $1.5 million during the second quarter as we earned more on our cash deposits due to higher interest rates. Income before income taxes decreased $9.4 million to $6.5 million.
Richard Hare: The decrease was driven by the change in the LIFO reserve, which generated an immaterial impact on gross profit in 2024, compared to a positive impact of $3.4 million in the second quarter of 2023.
Richard Hare: Selling, general and administrative expenses decreased $6.9 million, or 6.3%, to $103.1 million. As percentage of sales, these costs approximated 57.7% of sales, up from 53.3% in the prior year quarter. We experienced decreased selling, cost, advertising, warehouse, and delivery expenses during the quarter. Interest income was approximately $1.5 million during the second quarter, as we earned more on our cash deposits due to higher interest rates. Income before income taxes decreased $9.4 million to $6.5 million. Our tax expense was $2.8 million during the first six months of 2024, which resulted in an effective annual tax rate of 29.2%.
Richard Hare: Our tax expense was $2.8 million during the first six months of 2024, which resulted in an effective annual tax rate of 29.2%. Now turning to our balance sheet, at the end of the second quarter, our inventories were $92.4 million, which was down $1.6 million from the year-end balance and down $22.3 million versus the second quarter of 2023. We ended the quarter with $109.9 billion of cash and cash equivalents. Looking at some of our uses of cash flow, capital expenditures were $16 million for the first six months of 2024. We also paid out $10.1 million of regular dividends in the first six months of 2024.
Richard Hare: The primary difference in the effective rate and statutory rate is due to expected state income taxes and non-deductible items for the year.
Richard Hare: That income of the second quarter of 2024 was $4.4 million, or $0.27 per diluted share on our common stock, compared to that income of $11.8 million, or $0.70 per share in a comparable quarter last year. Turning to our balance sheet at the end of the second quarter, our inventory were $92.4 million, which was down $1.6 million from the year-end balance, and down $22.3 million versus the second quarter of 2023. At the end of the second quarter, our customer deposits were $38.7 million, which was up $2.9 million from December 31, 2023 balance, and down $6.9 million versus the Q2 2023 balance.
Richard Hare: At the end of the second quarter, our customer deposits were $38.7 million, which was up $2.9 million from the December 31, 2023 balance, and down $6.9 million versus the Q2, 2023 balance.
Richard Hare: We ended the quarter with $109.9 billion of cash and cash equivalents. We have no funded debt on our balance sheet at the end of the second quarter of 2024.
Richard Hare: We ended the quarter with $109.9 billion of cash and cash equivalents.
Speaker Change: We have no funded debt on our balance sheet at the end of the second quarter of 2024.
Richard Hare: Looking at some of our uses of cash flow, capital expenditures were $16 million for the first six months of 2024. We also paid out $10.1 million of regular dividends in the first six months of 2024. We didn't utilize our share repurchase program during the second quarter of this year, and we have approximately $13.1 million of existing authorization in our buyback program.
Richard Hare: Our earnings release was without several additional forward-looking statements indicating our future expectations of certain financial metrics. I will highlight a few, but please refer to our press beliefs for additional commentary. We do expect our gross margins for 2024 to be between 60.0% and 60.5%. We anticipate gross profit margins will be impacted by our current estimates of product and free costs. Our fixed and discretionary type SGN expenses for 2024 are expected to be in a $282 to $284 million range, which is a reduction in our previous estimate. We anticipate continued reductions in advertising and incentive compensation, and professional fees.
Speaker Change: Our earnings release lists out several additional forward-looking statements indicating our future expectations of certain financial metrics. I will highlight a few, but please refer to our press release for additional commentary.
Clarence Smith: Gross profit margins will be impacted by our current estimates of product and freight costs. We anticipate continued reductions in advertising, incentive compensation, and professional fees. The variable type costs within SG&A for 2024 are expected to be in the range of 19.7% to 20%. We anticipate continued reductions in third-party credit costs as well as delivery costs. Anticipated new or replacement stores, remodels, and expansions account for $28 million.
Speaker Change: We anticipate gross profit margins will be impacted by our current estimates of product and freight costs.
Speaker Change: Our fixed and discretionary type SG&E expenses for 2024 are expected to be in the 282 to $284 million range, which is a reduction in our previous estimate.
Richard Hare: The variable type costs within SGNA for 2024 are expected to be in the range of 19.7 to 20%. We anticipate continued reductions in third-party credit costs as well as delivery costs. Our plan catbacks for 2024 is $33 million. Anticipated new or replacement stores, remodels, and expansions account for $28 million. Investments in our distribution network are expected to be $2.5 million. Investments in our IT, our information technology, are expected to be approximately $2.5 million. Our anticipated effect is tax rate in 2024, is expected to be 27.5%. This projection excludes the impact of investing of stock awards and any potential new tax legislation.
Speaker Change: Our planned CapEx for 2024 is $33 million.
Speaker Change: Anticipated new or replacement stores, remodels, and expansions account for $28 million.
Speaker Change: Investments in our distribution network are expected to be 2.5 million dollars and investments in our IT
Richard Hare: This completes our commentary on the second quarter of finance results.
Operator: Operator, we would like to open the call at this time for any questions. Thank you.
Speaker Change: This completes the commentary on the second quarter financial results operator. We would like to open the call at this time for any questions.
Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing to start keys. One moment, please, while we pull for questions.
Speaker Change: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.
Operator: Thank you.
Operator: Thank you. Our first question is from Anthony Lebiedzinski from Sudoti. Please proceed.
Anthony Lebiedzinski: Our first question is from Anthony Libesinski from Sudoti. Please proceed.
Speaker Change: Thank you. Our first question is from Anthony Lebiedzinski from Sudoti. Please proceed.
Richard Hare: Good morning, gentlemen. Thank you for taking the questions. First, I just wondered if you could comment on the sales trends throughout the quarter. I know you talked about Memorial Day being some of this appointment, but it's just overall as he looked from April through June. How did that go in terms of, you know, taking comps or however you want to handle that?
Anthony Lebiedzinski: So, you know, first, I was just wondering if you could comment on the sales trends throughout the quarter. I know you talked about Memorial Day being, I guess, somewhat disappointing, but it's just, overall, as we look from April through June. How did that go in terms of written comps or whatever you want to handle that?
Anthony Lebiedzinski: So, you know, first, I just just wondering if you could comment on the sales trends throughout the quarter. I know you talked about Memorial Day being, I guess, somewhat disappointing, but it's just just overall, as we look from April through June , how did that go in terms of, you know, written comps or however you want to handle that?
Richard Hare: Sure, Anthony. Good morning.
Richard Hare: Sure, Anthony. Good morning. This is Richard.
Richard Hare: This is Richard. In terms of the, I can give you the written and delivered trends. In April, our written business was down approximately 14%. Steve mentioned the disappointing Memorial Day in May. We were down approximately 18%. June, we were down approximately 8%. And then in terms of deliveries, April, we were down approximately 12. In April, about six in May, and about 20% in June.
Speaker Change: Sure, Anthony, good morning. This is Richard. In terms of, I can give you the written and delivered trends.
Richard Hare: In terms of written and delivered trends, in April, our written business was down approximately 14%. Steve mentioned the disappointing Memorial Day in May; we were down approximately 18%. June; we were down approximately 8%. And then, in terms of deliveries, in April, we were down approximately 12%. And in April, about six in May and about 20% in June.
Anthony Lebiedzinski: That's very helpful, Richard. Thanks for that.
Anthony Lebiedzinski: That's very helpful, Richard. Thanks for that. And then, on your last conference call, I know you guys talked about a new media firm and a new media approach. Can you talk about that and what you've learned from that? And how are you guys thinking about that for the back half of the year?
Anthony Lebiedzinski: And then, so on your last conference call, me, you guys talk about a new media firm and a new media approach. Can you talk about that and then what you've learned from that and how are you guys thinking about that for the back half of the year?
Anthony: That's very helpful, Richard. Thanks for that. And then, so on your last conference call, you guys talked about a new media firm and a new media approach. Can you talk about that and what you've learned from that? And how are you guys thinking about that for the back half of the year?
Steven Burdette: Yeah, Anthony, this is Steve. Yeah, we did introduce Carmichael Lynch in April, but really, the first impact that we started seeing of that would have been in May. It's too early to tell, though.
Steven Burdette: Yeah, Anthony, this is Steve. Yeah, we did introduce Carmichael Lynch. Started in April. Really, the first impact that we started seeing of that would have been in May. It's too early to tell, though. You know, one of our indicators is traffic that we're looking at, and I made a comment that we're starting to see a little bit of improvement in traffic. So we consider that to be a positive with what they're doing.
Speaker Change: impact that we started seeing that would have been in May. It's too early to tell, though. You know, one of our indicators is traffic that we're looking at, and I made a comment that we're starting
Steven Burdette: You know, one of our indicators is the traffic that we're looking at. And I made a comment that we're starting to see a little bit of improvement in traffic. So we consider that to be positive with what they're doing. You know, some of the changes they looked at that I talked about were from a TV perspective; we're still doing streaming and OTT. But we're also doing a little more broadcast in our bigger markets to strike a balance there.
Steven Burdette: And you know, some of the changes they looked at that I talked about is from a TV perspective. We're still doing streaming and OTT, but we're also doing a little bit of broadcast in our bigger markets on a balance there. And then we've kind of changed up our search direction. What we're doing there in search to drive more traffic to the stores. So we're encouraged right now. And so that's kind of why we're optimistic getting the third quarter that will continue to see those traffic trends improve.
Steven Burdette: And then we've kind of changed up our search direction, what we're doing there in search to drive more traffic to the stores. So we're encouraged right now. And so that's kind of why we're optimistic heading into the third quarter that we'll continue to see those traffic trends improve.
Anthony Lebiedzinski: Yeah, so yeah, thanks, Steve.
Anthony Lebiedzinski: Gotcha. Yeah, thanks, Steve. And then, so I guess with the upcoming election, you're going to pivot to broadcast TV. With the election coming up, will that kind of prevent you guys from doing as much broadcast TV as you would normally like to do?
Anthony Lebiedzinski: And then I guess it would be upcoming election in your get us get pivot to block cast TV with the election coming up. Will that kind of prevent you guys from doing as much broadcast TV as you would have normally liked to do? Well, we could be, you know, basically cut off because the election takes priority of those ads, but we won't know that till we get there. And there'll probably be more so in certain states than others. You know, those states that like Georgia, maybe North Carolina, Virginia, are really the states in our market where our footprint is that are considered to be swing states.
Speaker Change: Gotcha, yeah, thanks Steve. And then, so I guess with the upcoming election and you're going to pivot to
Speaker Change: Broadcast TV. With the election coming up, will that kind of prevent you guys from doing as much broadcast TV as you would have normally liked to do?
Speaker Change: Well, we could be, you know, basically cut off because the election takes priority of those ads, but we won't know that till we get there. And it'll probably be more so in certain states than others.
Speaker Change: You know, those those states that like Georgia.
Steven Burdette: So in those states, possibly so, but we'll monitor that and manage that our marketing team will with our with EP and Co and Carmichael Lynch.
Anthony Lebiedzinski: Got it. Okay.
Anthony Lebiedzinski: Got it. Okay, and my last question before I pass it on to others. You mentioned that you're happy with the two new stores that just opened, but just overall, given the acceleration and store growth that you've had, can you talk more broadly about some of the other recent store openings? How have those done relative to your expectations?
Steven Burdette: And my last question before I pass it on to others. So you mentioned that you're happy with the new story that just opened, but just overall given the acceleration and store growth that you've had. Can you talk more broadly about some of the other recent store openings? How have those done relative to your expectations? Yeah, so I mentioned on the call, as you said, South Haven and Dustin have both exceeded our expectations. And then we opened last year, Dayton, Ohio, and Concord, North Carolina. And both of those stores, from a traffic perspective, have done as well. Closing out of the two new stores this year has been stronger than the two new stores last year from their initial start, but they are getting better and building strength there. But we have been pleased with both, you know, with all four of those store openings.
Speaker Change: Got it. Okay. And my last question before I pass it on to others. So you mentioned that you're happy with the two new stores that just opened, but just overall, given the acceleration and store growth that you've had, can you talk more broadly about the
Speaker Change: Some of the other recent store openings, how have those done relative to your expectations?
Steven Burdette: Yeah, so I mentioned on the call that Southaven and Destin have both exceeded our expectations, and then we opened last year in Dayton, Ohio, and Concord, North Carolina. And both of those stores, from a traffic perspective, have done as well. Our closing out of the two new stores this year has been stronger than the two new stores last year from their initial start, but they are getting better and building strength. But we have been pleased with both, you know, with all four of those store openings.
Speaker Change: And both of those stores, from a traffic perspective, have done as well. Our closing out of the two new stores this year has been stronger than the two new stores last year from their initial start, but they are getting better and building strength.
Steven Burdette: And look forward to the two more that we're adding this year in Pembroke Pines on South Florida. And then obviously St. Pete and Tampa, you know, again, Florida being our largest concentration stores, are really looking forward to that, along with Indiana and then getting into Houston.
Speaker Change: and look forward to the two more that we're adding this year in Pembroke Pines down in South Florida and then obviously St. Pete and Tampa you know again Florida being our largest concentration of stores we're really looking forward to that along with Indiana and then getting into Houston.
Anthony Lebiedzinski: Thank you very much; your best of luck.
Anthony Lebiedzinski: Got it. Well, thank you very much and best of luck.
Cristina Fernandez: Our next question comes from Cristina Fernández from Kelsey Advisory Group. Please proceed.
Operator: Our next question comes from Christina Fernandez from Kelsey Advisory Group. Please proceed.
Christina Fernandez: Hi, good morning. I wanted to follow up on Anthony's question on demand and wanted to see if you looked at how the quarter progressed, particularly the Memorial Day event being disappointing. I guess what are you planning differently? How does it change your approach for the back half, particularly for the big Smith, Richard Hare, Michael Legg, Steven Burdette, Budd Bugatch, Haverty Smith, Richard Hare
Cristina Fernandez: Hi, good morning. I wanted to follow up on Anthony's question on the main and wanted to see if you looked at how the quarter progress, particular memorial event being disappointing. I guess what are you planning differently?
Speaker Change: and you wanted to see if you looked at how the quarter progressed particular
Cristina Fernandez: How does it change your approach for the back half? Particularly for like the big promotional holiday weekend, like Labor Day, which you mentioned is the biggest of the year. That would be helpful.
Cristina Fernandez: Thank you.
Steven Burdette: Yeah, Cristina, this is Steve. We're in need that we need to go after right now, lowering prices or be more aggressive in that state. We will certainly be out with our normal promotions, our credit financing, as we're doing it. But what we're leaning on and feel really positive about it is, again, like I talked about, our new media partner and what we're doing there to reach the consumer and driving more traffic to our stores because the end result of we can increase our traffic to our stores. That gives us opportunity, obviously, to close more business.
Steven Burdette: Yeah, Christina, this is Steve. We're folks in. From a promotional standpoint, we're not going to chase that. We don't feel like that's the need that we need to go after right now, lowering prices or being more aggressive in that state. We will certainly be out with our normal promotions, and credit financing as we're doing it. But what we're leaning on and feel really positive about is, again, like I talked about, our new media partner and what we're doing there to reach the consumer and drive more traffic to our stores.
Speaker Change: Yeah, Christina, this is Steve. We're folks in...
Speaker Change: From a promotional standpoint, we're not going to chase that. We don't feel like that's the need that we need to go after right now, lowering prices or being more aggressive in that state.
Speaker Change: as we're doing it. But what we're leaning on and feel really positive about is, again, like I talked about, our new media partner and what we're doing there to reach the consumer and driving more traffic to our stores, because
Steven Burdette: The end result, if we can increase our traffic to our stores, that gives us the opportunity, obviously, to close more business. That's the number one thing we're focused on right now in driving this environment, and we're going to stay consistent, maintain our margins, and continue to offer the customer quality and value products.
Steven Burdette: That's the number one thing we're focused on right now in driving.
Steven Burdette: It's too early right now, coming out second quarter. We've got some positive trends that we feel good on as they just started their first promotion with Memorial Day. But we feel confident what we got with our promotions that we have. There's no need to do anything different. We don't think that's the reason consumers are not buying. We just think they're a little more deliberate, a little more cautious in this environment. We're going to stay consistent, maintain our margins, and continue off the customer of quality and value product.
Speaker Change: It's too early right now to come out of the second quarter. We've got some positive trends that we feel good on as they just started their first promotion with Memorial Day, but we feel confident in what we've got with our promotions that we have. There's no need to do anything different. We don't think that's the reason consumers are not buying.
Speaker Change: We just think they're a little more deliberate, a little more cautious in this environment. And, you know, we're going to stay consistent, maintain our margins and continue off the customer quality and value product.
Cristina Fernandez: Thanks.
Christina Fernandez: Thanks. And then the second question I have for Clarence or Steve, Clarence, you talked about investments in the business and talent and IT. Can you expand on some specifics, like what areas do you need more talent in IT? Like, is it systems? Is it supply chain? The main, the main investments we continue to make.
Cristina Fernandez: And then the second question I have for Clarence Osteve.
Speaker Change: Thanks. And then the second question I have.
Clarence Smith: Clarence, you talked about investments in the business and talent in IT. Can you expand on specific, like what are we asked, what do you need more talent on IT, like it's existence, it's in supply chain? The main investments we continue to do there is enhancing our website and just everything about that to make sure that we're reaching the customer better than anybody else and getting our message across. It is a continual investment in it escalates. It's just so dad-gum important that we are looked at as one of the better sites and easier to operate. So we spend a lot of energy there; a lot of our team is dedicated to it, and certainly we're trying to stay on the leading edge for website and just making sure that we can easily communicate with our customer there.
Speaker Change: for Clarence or Steve. Clarence, you talked about
Clarence Smith: The main investments we continue to do there are enhancing our website and just everything about that to make sure that we're reaching the customer better than anybody else and getting our message across. It is a continual investment, and it increases. It's just so darn important that we are looked at as one of the better sites and easier to operate. So we spend a lot of energy there. A lot of our team is dedicated to it, and certainly, we're trying to stay on the leading edge of the website and just making sure that we can easily communicate with our customers there.
Clarence Smith: The main the main investments we continue to do there is enhancing our website and just the everything about that to make sure that we're reaching the customer better than
Clarence Smith: than anybody else and getting our message across.
Steve Burdette: It is a continual.
Clarence Smith: And then anything on talent, where do you need to make investment? On talent. Well, yeah, we actually, we have some issues; we have some changes that we will be making in the next several months, particularly in the merchandise area. We've had a couple of retirements, one of which we've already announced, and we will be supplementing our team here and adding creative talent. We're excited about that opportunity, and that is underway right now.
Christina Fernandez: and then anything on talent where you need to make investments?
Clarence Smith: on talent? Well, yeah, we actually, we have some issues, we have some changes that we will be making in the next several months, particularly in the merchandise area. We've had a couple of retirements, one of which we've already announced, and we will be supplementing our team here and adding creative talent. We're excited about that opportunity. And that is underway right now. We just promoted our IT head, Greg Davis. He just got promoted. We had a retirement there, but we have a strong team there we feel good about. Our main interest right now is in supplementing our merchandising team here under John Gill.
Clarence Smith: We just promoted our IT head, Greg Davis. He just was promoted. We had a retirement there, but we have a strong team there.
Speaker Change: head Greg Davis. He just was promoted. We had a retirement there, but we have a strong team there. We feel good about. Our main interest right now is supplementing our merchandising team here under John Gill.
Clarence Smith: We feel good about our main interests right now is supplementing our merchandising team here under John Gill.
Steven Burdette: Cristina, we're making. This is Steve. We're making a few investments in the store side of things as far as the in-store experience. We have two test stores right now going that has to do with basically point-of-purchase materials that are in the store that help the consumers and help the salespeople in communicating and hopefully improving the closing rate by providing better information for the consumer there. So we're excited about that.
Speaker Change: Christina we're making this is Steve we're making a few investments in the store side of things
Speaker Change: point-of-purchase materials that are in the store to help the consumers.
Steven Burdette: There's a change with the design centers. We're investing more with those, providing a few more options, more like rug choices, bigger screens, bigger TVs to make the experience for the consumer better. So we're doing a test with that as well. So that is an investment. And then, of course, on the website, Clarence mentioned the A/B testing is something we continually are doing and evolving and changing.
Speaker Change: Clarence mentioned, the A-B testing is something we continually are doing and evolving and changing.
Cristina Fernandez: Thank you.
Christina Fernandez: And the last question I had was, with the election coming up, there's also increased talk and perhaps concern around tariffs on goods from China. I know your exposure has decreased to 15%.
Cristina Fernandez: And the last question I had was with the election coming up; there's also increased talk and perhaps concern around tariffs on goods from China. I know your exposure has decreased to 15%. Can we talk if there were to be tariffs, how you can manage them this time and we maybe remind us of what you did last time, is it pricing, shifting goods to other countries, etc. Yeah, Christina, our merchants are already working with our suppliers. Basically, we have a leather that's coming out of China. Some fabric, but mainly leather. And we've already got majority of our vendors already have alternate production, either in Cambodia, Vietnam, Mexico, that they're already in the midst of executing on.
Speaker Change: Thank you. And the last question I had was.
Speaker Change: With the election coming up, there's also increased talk and perhaps concern around tariffs on goods from China. I know your exposure has decreased to 15%. Can you talk, if there were to be tariffs, how...
Clarence Smith: Can you talk about, if there were to be tariffs, how you could manage them this time and maybe remind us of what you did last time? Is it pricing, shifting goods to other countries, et cetera? Yeah, Christina, our merchants are already doing that.
Speaker Change: You can manage them this time and maybe remind us of what you did last time. Is it pricing, shifting goods to other countries, etc.
Clarence Smith: Yeah, Christina, our merchants are already working with our suppliers. Basically, we have leather that's coming out of China, some fabric, but mainly leather. And we've already got a majority of our vendors already have alternate production, either in Cambodia, Vietnam, Mexico, that they're already in the midst of executing on. And so we have an alternative and do not expect any kind of impact from tariffs if they were to come about for China, additional tariffs.
Speaker Change: Yeah, Cristina, our merchants are already working with our suppliers.
Speaker Change: Basically, we have leather that's coming out of China, some fabric, but mainly leather. And we've already got, the majority of our vendors already have alternative production, either in Cambodia, Vietnam, Mexico.
Cristina Fernandez: And so we have an alternative and do not expect any kind of impact from tariffs that they would have come about for China additional tariffs.
Speaker Change: Smith, that they're already in the midst of executing on, and so we have an alternative and do not expect any kind of impact from tariffs if they were to come about for China, additional tariffs.
Cristina Fernandez: Thank you.
Speaker Change: Thank you.
Budd Bugatch: Our next question comes from Bud Bukach from Water Tower Research. Please proceed.
Operator: Our next question comes from Budd Bugatch from Water Tower Research. Please proceed.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Bud Bukac from Watertower Research. Please proceed.
Budd Bugatch: Well, good morning and thank you for taking my questions. First, congratulations on really managing pretty well through this pretty difficult period. It's been a real challenge in your financials.
Budd Bugatch: Good morning, and thank you for taking my questions. First, congratulations on really managing pretty well through this pretty difficult period. It's been a real challenge, and your financials don't compare as well as you would like them to. But they look strong, so congratulations on that. I do have a couple questions about the written business, and as you went through that, Richard, I think you said that June was down 8% or so. When you look at the change in customer deposits at the end of the quarter, that's down in the mid-teens, and I wonder if there's any relationship or any change in the relationship of deposits to backlog or what you're looking for out of the retail system going forward in terms of delivery
Bud Bukac: Good morning and thank you for taking my questions. First, congratulations on
Bud Bukac: really managing pretty well through this pretty difficult period. It's been a real challenge, and your financials, they don't compare as well as you would like them. They look strong, so congratulations on that.
Budd Bugatch: They don't compare as well as you would like them. They look strong. So congratulations on that.
Budd Bugatch: I do have a couple questions about the written business. As you went through that, Richard, I think you said that June was down 8% or so. When you look at the change in customer deposits at the end of the quarter, that's down in the mid teens.
Speaker Change: I do have a couple questions about the written business and as you went through that, Richard, I think you said that
Speaker Change: June was down 8% or so. When you look at the change in customer deposits at the end of the quarter, that's down in the mid-teens.
Richard Hare: And I wonder if there's any relationship or any change in the relationship of deposits to backlog or what you're looking for out of the retail system going forward in terms of deliveries. Yeah, but it's Richard. The overall relationship really hasn't changed over the quarter in terms of the relationship between deposits and in our backlog. So backlog is fairly consistent now with what has been throughout this calendar year.
Speaker Change: And I wonder if there's any relationship or any change in the relationship of deposits to backlog or what you're looking for out of the retail system going forward in terms of deliveries.
Richard Hare: Yeah, it's Richard. The overall relationship really hasn't changed over the quarter in terms of the relationship between deposits and our backlog. So backlog is fairly consistent now with what it has been throughout this calendar year.
Speaker Change: Yeah, but it's Richard. We get the overall relationship really hasn't changed over the quarter in terms of the relationship between deposits and in our backlog. So backlog is fairly consistent now with what has been, you know, throughout this calendar year.
Steven Burdette: and any read through the change in, I know that Memorial Day might have been a disappointment. Steven, I was wondering if you had a thought about it so maybe why that was. We heard Memorial Day had mixed results across the industry, so maybe what would you think, maybe you did right or did wrong in Memorial Day, if anything? I don't know what we did. We were just on the wrong side of it, and that makes you just described. Obviously, when we were not happy, it was still a great weekend.
Budd Bugatch: Any reads through the change in, I know that Memorial Day might've been a disappointment. Steven, I was wondering if you had a thought about it, so maybe why that was. We heard it had mixed results across the industry, so maybe what did you think? Maybe you did right or did wrong in it, if any.
Bud Bukac: And any read through the change in, I know that Memorial Day might've been a disappointment. Steven, I was wondering if you had a thought about it, so maybe why that was. We heard Memorial Day had mixed results across the industry. So maybe what did you think, maybe you did right or did wrong in Memorial Day, if anything.
Steven Burdette: I don't know what we did. We were just on the wrong side of it in that mix you just described.
Stephen: I don't know what we did. We were just on the wrong side of it in that mix you just described. Obviously, we were not happy. It was still a great weekend. It just wasn't what our expectations and what it was last year. And it was probably
Steven Burdette: Obviously, we were not happy. It was still a great weekend. It just wasn't what our expectations and what it was last year. And it was probably It was probably equal to our President's Day, and typically, it's a stronger holiday than President's Day.
Steven Burdette: It just wasn't what I expectations and what it was last year and it was probably, it was equal to our President's Day and typically it's stronger holiday than President's Day, so it was not a horrible weekend, it just was disappointing from a comparable basis of what we had done there. I think, bud, the consumer we just seen has been a little more cautious and delivered in there, taking the money out of the wallets and spending it. So we still feel good where we are and what we're doing, the product we have, this clearance mentioned, we've got new product coming in, it's hitting some price points and places that we maybe had some voids and this clearance said it's resonating and we still have more coming, so we're excited for that and excited to get that in.
Speaker Change: It was equal to our President's Day, and typically it's a stronger holiday than President's Day.
Steven Burdette: So it was not a horrible weekend; it just was disappointing from a comparable basis as to what we had done there. But we still feel good about where we are and what we're doing and the product we have. As Clarence mentioned, we've got new product coming in. It's hitting some price points in places that we maybe had some voids. And as Clarence said, it's responding, and we still have more coming. So we're excited for that and excited to get that in.
Speaker Change: So it was not a horrible weekend, it just was disappointing from a comparable basis.
Bud Bukac: of what we had done there. You know, and I think, Bud, the consumer we've just seen has been a little more cautious and deliberate in their, you know, taking the money out of their wallets and spending it.
Clarence Smith: But we still feel good where we are and what we're doing and the product we have. As Clarence mentioned, we've got new product coming in. It's hitting some price points in places that we maybe had some voids. And as Clarence said, it's resonating. And we still have more coming. So we're excited for that and excited to get that in.
Budd Bugatch: And that does go to kind of the next area because we're seeing from others outside of the furniture industry, we're hearing a lot about the trade-down issue, and it looks like that's where the economy might be going over the immediate future. Are your inventories in an awfully good shape, but maybe are they in too good a shape and are you, how do you participate in the trade down?
Budd Bugatch: And that does go to kind of the next area because we're seeing from others outside of the furniture industry that we're hearing a lot about the trade down issue, and it looks like that's where the economy might be going in the immediate future. Your inventories are in awfully good shape, but maybe they are in too good of a shape? And how do you participate in the trade down? That's not something Haverty is known for, and I wouldn't expect you to change it and wouldn't want you to change your stripes, but you still have to be aware of what's going on around you.
Speaker Change: And that does go to kind of the next area because we're seeing from others outside of the furniture industry, we're hearing a lot about the trade down issue and it looks like that's where the economy might be going over the
Speaker Change: the immediate future. Your inventories are in awfully good shape, but maybe are they in too good a shape?
Clarence Smith: That's not something Havardies is known for, and I wouldn't expect you to change it and wouldn't want you to change your stripes, but you still have to be aware of what's going on around you. Yeah, but we feel really good about our position. I do think we're reaching a better customer. Actually, our deposits in the better product are higher than it was. We're doing more customs, special order Richard Steve talked about that.
Clarence Smith: Yeah, we, Bud, feel really good about our position. I do think we're reaching a better customer. Actually, our deposits and the better product are higher than they were. We're doing more custom special orders. Richard, and Steve talked about that.
Speaker Change: Yeah, we, Bud, we feel really good about our position. I do think we're reaching a better customer. Actually, our deposits and the better product is higher than it was.
Clarence Smith: The bottom end of this industry is being devastated right now. The bankruptcy is that you're seeing the cons Badcock and maybe Bed Bath and Beyond is devastating to the promotional end of this business, and we certainly don't want to go get into that bellywick. I was talking with some of our suppliers about the Mississippi parts of the market, which is where the promotional repository comes from, and they are absolutely devastated.
Clarence Smith: The bottom end of this industry is being devastated right now. The bankruptcies that you're seeing, the cons, Badcock, and maybe Bed Bath & Beyond are devastating to the promotional end of this business. And we certainly don't want to get into that.
Speaker Change: The bottom end of this industry is being devastated right now. The bankruptcies that you're seeing...
Bud Bukac: is devastating to the promotional end of this business, and we certainly don't want to go get into that bailiwick.
Clarence Smith: I was talking with some of our suppliers about the Mississippi parts of the market, which is where the promotional poultry comes from, and they are absolutely devastated. We're not going down in price point. We are targeting a better customer. And it's working.
Speaker Change: I was talking with some of our suppliers about the Mississippi parts of the market, which is where the promotional poultry comes from, and they are absolutely devastated.
Clarence Smith: We're not going down in price point. We are targeting a better customer. It's working. I do think we get more credit for it. We get more margin. I think we're taking some from that end of the market, and I think it'll pay off for us. It might take a little while, but I think it will pay off for us.
Speaker Change: We're not going down in price point. We are targeting a better customer. It's working. I do think we get more credit for it. We get more margin. I think we're taking some from that end of the market. And I think it'll pay off for us.
Clarence Smith: I do think we get more credit for it. We get more margin. I think we're taking some from that end of the market, and I think it'll pay off for us. It might take a little while, but I think it will pay off.
Speaker Change: It might take a little while, but I think it will pay off for us.
Budd Bugatch: I don't disagree with that at all, and remind me again what you're planning to open the balance of this year. You've got St. Pete and we hope to open 10 book times before Labor Day is what we're hoping St. Pete before then to the quarter. In the third quarter, it will open up Greenwood, Indiana. It's from time and middle of the fourth quarter, and we'll open up Houston; our first store there in the Woodlands will be open in late fourth quarter. So that's what we have planned for the remainder of this year. We should, you know, with that store count, that'll give somewhere around the 129 stores for the year.
Budd Bugatch: I don't disagree with that at all. And remind me again what you're planning to open for the balance of this year. You've got St. Pete and...
Speaker Change: I don't disagree with that at all. And remind me again what you're planning to open the balance of this year. You've got St. Pete and...
Clarence Smith: Yeah, we hope to open Pembroke Pines before Labor Day, St. Pete, before the end of the quarter. In the third quarter, we open up Greenwood, Indiana; sometime in the middle of the fourth quarter, and we'll open up Houston. Our first store there in the Woodlands will be open in late fourth quarter. So that's what we have planned for the remainder of this year. We should, you know, with that store count, that'll get us somewhere around 129 stores for the year. Bud, you can walk down the street for our store opening in St. Pete. We'll just see you there. Is that fair?
Speaker Change: Yeah, we hope to open Pembroke Pines before Labor Day is what we're hoping, St. Pete before the end of the quarter. In the third quarter, we open up Greenwood, Indiana sometime in the middle of the fourth quarter and we'll open up
Speaker Change: Houston, our first store there, and the Woodlands will be open in late fourth quarter.
Speaker Change: So that's what we have planned for the remainder of this year. We should, you know, with that store count, that'll get us somewhere around 129 stores for the year. Bud, you can walk down the street for our store opening in St. Pete. We'll just see you there.
Budd Bugatch: But you can walk down the street for our store opening in St. Pete. We'll just see you there.
Budd Bugatch: I do that fairly often, and there's not as much activity there going on as I'd like to say so. I'd like to see that open before the end of the quarter.
Budd Bugatch: I do that fairly often, and there's not as much activity there as I'd like to see. So I'd like to see that open before the end of the quarter. We'll buy you a cup of coffee. I'll cook you a burger.
Speaker Change: I do that fairly often and there's not as much activity there going on as I'd like to see so I'd like to see that open before the end of the quarter. We'll buy you a cup of coffee. I'll cook you a burger.
Michael Legg: We'll buy. Our next question comes from Mickey Legg, from the Benchmark Company. Please proceed.
Operator: Our next question comes from Mickey Legg from the Benchmark Company. Please proceed.
Speaker Change: Our next question comes from Mickey Legg from the Benchmark Company. Please proceed.
Michael Legg: Hey guys, thanks for taking my questions. Looks like you touched on the business already, so I'll try to frame it from a fresh perspective. If you could just talk about the competitive landscape a little bit, are you seeing more companies going out of business? And I know you don't engage in pricing promotion too much on your end, but are you seeing any trends on, you know, competitors using more promotions? And I think you also talked a little bit about this in your prepared remarks about maybe any weather-related impact that may have impacted sales or how you were able to, you know, avoid that.
Mickey Legg: Hey guys, thanks for taking my questions. Looks like you touched on a bit of this already, so I'll try to frame it from a fresh perspective. If you could just talk about the competitive landscape a little bit. Are you seeing, you know, more companies going out of business? And I know you don't engage in price promotions too much on your end, but are you seeing any trends on, you know, competitors using more promotions?
Mickey Legg: Hey guys, thanks for taking my questions. Looks like you touched on a bit of this already, so I'll try to frame it from a fresh perspective. If you could just talk about the competitive landscape a little bit. Are you seeing, you know, more companies going out of business? And I know you don't engage in pricing promotion too much on your end, but are you seeing any trends on, you know, competitors using more promotions? And
Mickey Legg: And I think you also talked a little bit about this in your prepared remarks about maybe any weather-related impact that may have impacted sales or how you were able to, you know, avoid that. Any more color on that would be helpful. Thanks.
Speaker Change: I think you also talked a little bit about this in your prepared remarks about maybe any weather-related impact that may have impacted sales or how you were able to, you know,
Michael Legg: Any color on that would be helpful. Thanks.
Steven Burdette: We try not to give weather reports. I mean, sometimes it does impact, but no, we haven't really had any major impact there. You know, these, these GOB sales really don't affect us. I mean, and that's not something that I feel impacts us most of the time. That's by close out, people. It's on the lower end of the market. We don't see that really affecting us. There'll be a lot of it in certainly in parts of our market, but I don't think it might have very short-term impact, but nothing, nothing significant.
Clarence Smith: We try not to give weather reports. I mean, sometimes it does impact us, but no, we haven't really had any major impact there. You know, these GOB sales really don't affect us, I mean, and that's not something that I feel impacts us. Most of the time, that's done by closeout people. It's on the lower end of the market, but we don't see that really affecting us. There'll be a lot of it. Smith, Richard Hare, Michael Legg, Steven Burdette, Haverty Smith, Richard Hare, Michael
Speaker Change: Avoid that. Any color on that would be helpful. Thanks. We try not to give weather reports. I mean, sometimes it does impact, but no, we haven't really had any major impact there. You know these
Speaker Change: These GOB sales really don't affect us. I mean, and that's not something that I feel impacts us. Most of the time, that's
Speaker Change: By close out people. It's on the lower end of the market We don't see that really affecting us. There'll be a lot of it
Speaker Change: in certainly in parts of our market, but I don't think it might have very short-term impact, but nothing significant.
Steven Burdette: Yeah, from Mickey, Steve, from the promotional side of things, I think it's still, they're still consistent with the lower end players are going to be aggressive with credit and with, you know, price points trying to hit on that. I don't think any different than what they've been. They may be trying to seek out, in their minds, better values of what they're putting out there.
Steven Burdette: Yeah, from make you see, from the promotional side of things, I think you still, they're still consistent. The lower end players are going to be aggressive; there's credit, and with, you know, price points trying to hit on that. I don't think any different than what they've been. They make me trying to seek out their mind better values or what they're putting out there, but from our perspective, I don't see it being any different. And the upper end is still doing their same thing and promoting service and design, and not as much credit. I don't really see the change in general.
Steve Burdette: Yeah, from, Nicky, Steve, from the promotional side of things, I think it's still, they're still consistent with the lower end players are going to be aggressive with credit and with
Speaker Change: You know, price points trying to hit on that. I don't think any different than what they've been.
Speaker Change: They may be trying to seek out in their mind better values or what they're putting out there, but from our perspective, I don't see it being any different. And the upper end is still doing their same thing and promoting service and design and not as much credit.
Steven Burdette: But from our perspective, I don't see it being any different. And the upper end is still doing the same thing and promoting service and design and, you know, not as much credit. I don't really see a change in general. People are still promoting. When it gets around the holidays, you still see it, and there's still a lot of it.
Steven Burdette: I still, people are promoting. When it gets around the holidays, you still see it, and there's still a lot of it.
Speaker Change: Yeah, so I don't really see a change in general, it's still, people are promoting, when it gets around the holidays you still see it, and there's still a lot of it.
Michael Legg: Got it. That's helpful.
Mickey Legg: Got it. Got it. That's helpful. And then maybe just some additional color on the interest rate environment going forward. If we're expecting cuts over the next 12 months, how do you see that impacting the consumer environment? And, you know, maybe a little bit on the timing of that impact.
Richard Hare: And then maybe just some additional color on the interest rate environment going forward. If we're expecting cuts over the next 12 months, how do you see that impacting the consumer environment and, you know, maybe a little bit on the timing of that impact?
Speaker Change: Got it, got it, that's helpful. And then maybe just some additional color on the interest rate environment going forward. If we're expecting cuts over the next 12 months, how do you see that impacting the consumer environment and maybe a little bit on the timing of that impact?
Richard Hare: Yeah, this is Richard. We certainly are pleased to see the Fed's recent indications or signals that the rates are going to be coming down this year. You know, we're tied to housing and mortgage rates, and so we know it's coming. We just don't know exactly when, but we certainly feel like, based on things we're reading in the industry, publications and things of that nature, you know, next year, we'll certainly, you know, we should see an improvement in overall demand for housing, which certainly will affect us in a positive way.
Richard Hare: This is Richard. We are certainly, um..., pleased to see the Fed's recent indications or signals that interest rates are going to be coming down this year. You know, we're tied to housing and mortgage rates, and so we know it's coming. We just don't know exactly when, but we certainly feel, based on things we're reading in the industry publications and things of that nature, next year we should see an improvement in overall demand for housing, which certainly will affect us in a positive way.
Mickey Legg: All right. Great.
Speaker Change: This is Richard. We certainly...
Richard Hare: are pleased to see the Fed's recent indications or signals that the rates are going to be coming down this year.
Speaker Change: We're tied to housing and mortgage rates, and so we know it's coming. We just don't know exactly when, but we certainly feel like...
Richard Hare: Based on things you're reading in the industry publications and things that nature, you know, next year will certainly, you know We should see an improvement in overall demand for housing, which certainly will affect us in a positive way
Richard Hare: All right.
Michael Legg: Great.
Michael Legg: That's all for me. Thanks.
Operator: Thank you.
Richard Hare: All right, great, that's all for me.
Richard Hare: This concludes our question and answer session.
Operator: This concludes our question and answer session. I would like to turn the floor back over to Mr. Richard Hare for closing comments.
Vicky: Thanks, Maggie.
Operator: I would like to turn the floor back over to Mr. Richard Hare for closing comments. Well, we thank you for your participation in today's call, and we look forward to talking to you in the future when we release our third quarter results later this year. Thank you.
Richard Hare: Bye-bye.
Speaker Change: This concludes our question and answer session. I would like to turn the floor back over to Mr. Richard Hare for closing comments.
Richard Hare: Well, we thank you for your participation in today's call, and we look forward to talking to you in the future when we release our third-quarter results later this year. Thank you.
Richard Hare: Well, we thank you for your participation in today's call, and we look forward to talking to you in the future when we release our third quarter results later this year. Thank you.
Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.