Haverty Furniture Companies HVT Form 10-Q filing Q1 FY2026

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets – March 31, 2026(unaudited) andDecember 31, 2025 1

Condensed Consolidated Statements of Comprehensive Income – Three Months Ended March 31, 2026and2025(unaudited) 2

Condensed Consolidated Statements of Cash Flows – Three Months Ended March 31, 2026and2025(unaudited) 3

Notes to Condensed Consolidated Financial Statements (unaudited) 4

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12

Item 3. Quantitative and Qualitative Disclosures about Market Risk 16

Item 4. Controls and Procedures 16

PART II. OTHER INFORMATION

Item 1. Legal Proceedings 17

Item 1A. Risk Factors 17

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 17

Item 5.Other Information 17

Item 6. Exhibits 18

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

See notes to these condensed consolidated financial statements.

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See notes to these condensed consolidated financial statements.

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See notes to these condensed consolidated financial statements.

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HAVERTY FURNITURE COMPANIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note A - Business and Basis of Presentation

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

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

Note B – Stockholders’ Equity

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

For the three months ended March 31, 2026:

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For the three months ended March 31, 2025:

Note C – Interim LIFO Calculations

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

Note D – Fair Value of Financial Instruments

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

Note E – Credit Agreement

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

At March 31, 2026 and December 31, 2025, there were no outstanding borrowings under the Credit Agreement. The borrowing base was $126.7 million at March 31, 2026, and there were no outstanding letters of credit. Accordingly, the net availability was $80.0 million.

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Note F – Segment Reporting

We operate within a single reportable segment. We use a market area approach for both financial and

operational decision making. Each of these market areas are considered individual operating segments. The

individual operating segments all have similar economic characteristics. The retail stores within the market

areas are similar in size and carry substantially identical products selected for the same target customer. We

also use the same distribution methods chain-wide.

Our chief operating decision maker (CODM) is our President and Chief Executive Officer. Segment information is prepared on the same basis as our CODM manages our operating segments and evaluates results. The measure used by our CODM to assess performance and make operating decisions is income before income taxes as reported on our condensed consolidated statements of comprehensive income. Asset information is provided to the CODM on a consolidated basis.

The following table present significant segment expenses and other segment items regularly reviewed by our CODM:

(a) Depreciation and amortization expense included in selling, general and administrative expense totaled $6.3 million and $5.9 million for the three months ended March 31, 2026 and 2025.

(b) Other segment items include gains (losses) on asset disposals and miscellaneous income (expense).

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Note G – Revenues

We recognize revenue from merchandise sales and related service fees, net of expected returns and sales tax, at the time the merchandise is delivered to the customer. We record customer deposits when payments are received in advance of the delivery of merchandise. Such deposits totaled $40.4 million and $35.5 million at March 31, 2026 and December 31, 2025, respectively. Of the customer deposit liabilities at December 31, 2025, approximately $1.8 million have not been recognized through net sales in the three months ended March 31, 2026.

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

(1) Includes delivery charges and product protection.

Note H – Leases

We have operating leases for retail stores, offices, warehouses, and certain equipment. Our leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the leases for up to 20 years. We determine if an arrangement is or contains a lease at lease inception. Our leases do not have any residual value guarantees or any restrictions or covenants imposed by lessors. We have lease agreements for real estate with lease and non-lease components, which are accounted for separately.

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

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

As of March 31, 2026, we entered into five leases for additional retail locations, which had not yet commenced.

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

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

Note I – Income Taxes

Our effective tax rate for the three months ended March 31, 2026 and 2025 was 28.5% and 28.6%, respectively. The primary differences in the effective rate and the statutory rate were nondeductible items and additional tax expense related to vested stock awards.

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Note J – Stock-Based Compensation Plans

As more fully discussed in Note 13 of the notes to the consolidated financial statements in our 2025 Annual Report on Form 10-K, we have awards outstanding for Common Stock under stock-based employee compensation plans.

The following table summarizes our award activity during the three months ended March 31, 2026:

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

The aggregate intrinsic value of outstanding service-based restricted stock awards was approximately $10.7 million at March 31, 2026. The restrictions on the service-based awards generally lapse or vest annually, primarily over one-year and three-year periods.

The total fair value of performance-based restricted stock awards that vested during the three months ended March 31, 2026 was approximately $1.7 million. The aggregate intrinsic value of outstanding performance awards at March 31, 2026 expected to vest was approximately $8.9 million. The performance awards are based on one-year performance periods but cliff vest in approximately three years from grant date.

The compensation for all awards is charged to selling, general and administrative expenses over the respective grants’ vesting periods, primarily on a straight-line basis. The amount charged was approximately $2.4 million and $2.1 million for the three months ended March 31, 2026 and 2025, respectively. Forfeitures are recognized as they occur. As of March 31, 2026, the total compensation cost related to unvested equity awards was approximately $15 million and is expected to be recognized over a weighted-average period of two years.

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Note K – Earnings Per Share

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

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

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Note L – Contingencies

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

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

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes contained herein and with the audited consolidated financial statements, accompanying notes, related information and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025 (“Form 10-K”).

Industry Overview

The retail residential furniture industry is influenced by the overall strength of the economy, new and existing home sales, consumer confidence, spending on large ticket items, interest rates, and the availability of credit. The industry continues to face headwinds from rising consumer debt, constrained housing inventory, tight access to home mortgage credit, and ongoing economic uncertainty driven by changes in tariff policy and geopolitical tensions, including rising oil and raw material prices.

Throughout 2025, the U.S. presidential administration announced new and modified tariffs on imported goods, including those sourced from China, Vietnam, and other key manufacturing regions. In response, several affected countries implemented retaliatory tariffs, adding economic uncertainty and increased cost pressures across the industry. On February 20, 2026, certain tariffs were invalidated following a ruling by the U.S. Supreme Court, adding further uncertainty to the trade environment. On April 20, 2026, U.S. Customs and Border Protection ("CBP") launched the Centralized Automated Processing of Entries ("CAPE") system, a new system CBP is using to process refund claims for IEEPA tariffs on imported goods. The Company has submitted refund claims through CAPE with respect to products on which it paid IEEPA tariffs. We continue to actively monitor tariff developments and assess their potential impact on our business.

Business Overview

Havertys is a leading specialty retailer of residential furniture and accessories, founded in 1885 in Atlanta, Georgia. As of March 31, 2026, we operated 128 stores in 17 states throughout the Southern and Midwestern regions of the U.S. Our products are selected to appeal to a middle to upper-middle income consumer across a variety of styles. We have a seasoned, commission-based sales team, and offer free design services to customers seeking a more in-depth personalized experience. Unlike many competitors, we do not outsource delivery; instead, our Havertys delivery team ensures a seamless and professional delivery experience, which includes a detailed inspection of the product prior to delivery, as well as placement and assembly of the furniture in the customer's home. We are recognized in our markets for offering high-quality, fashionable products and delivering exception customer service.

Net Sales

Our sales are generated by customer purchases of merchandise and related fees, net of expected returns and sales tax. We record our sales when merchandise is delivered to the customer. Comparable-store or “comp-store” sales is a measure which indicates the performance of our existing stores and website by comparing the growth in sales in store and online for a particular month over the corresponding month in the prior year. Stores are considered non-comparable if they were not open during the corresponding month in the prior year or if the selling square footage has been changed significantly. The method we use to compute comp-store sales may not be the same method used by other retailers.

We also track “written sales” and “written comp-store sales,” which represent customer orders prior to delivery. As a retailer, comp-store sales and written comp-store sales are an indicator of relative customer spending and store performance. Comp-store sales, total written sales and written comp-store sales are intended only as supplemental information and none are substitutes for net sales presented in accordance with U.S. GAAP.

The following table outlines the changes in our sales and comp-store sales for the periods indicated.

Net sales for the first quarter of 2026 increased $7.7 million, or 4.1%, compared to the same period in 2025. This growth was achieved despite continued pressure from a soft housing market which creates a challenging demand environment for the home furnishings industry. Our comp-store sales increased $7.7 million, or 4.3%, in the first quarter of 2026 compared to the same period in 2025. Written business for the first quarter of 2026 was up 6.4% compared to the first quarter of 2025, and comp-store written business was up 7.0%.

Our free in-home design service continues to provide strong customer engagement. Design consultants helped drive 35.3% of our total written sales for the first quarter of 2026, compared to 33.2% of total written sales for the same period in 2025, with a higher average written ticket of $8,312, compared to $7,439 for the same period in 2025.

Gross Profit

Gross profit margin for the first quarter of 2026 was 61.5%, up 30 basis points compared to the prior year period of 61.2%. The increase is primarily due to product selection, merchandise pricing and mix.

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

Selling, General and Administrative Expenses

Our SG&A expenses as a percentage of sales for the first quarter of 2026 were 58.9% compared to 59.0% for the same period in 2025. SG&A expenses increased $4.1 million, or 3.8%, primarily due to higher selling, administrative, and occupancy costs. Selling expenses increased $2.4 million primarily due to third-party credit costs, sales commission and related benefit costs, consistent with the increase in net sales. Administrative expenses increased $0.8 million, driven by higher salaries and related benefits. Occupancy costs increased $0.6 million, largely due to costs associated with new store openings and the timing of repairs and maintenance.

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

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

The variable expenses in dollars were higher in the first quarter of 2026 compared to the same period in 2025, primarily driven by higher commission expense resulting from increased sales. Fixed and discretionary expenses increased in the first quarter of 2026 due to increases in occupancy costs, advertising, and administrative expenses compared to the prior year comparable period.

Liquidity and Capital Resources

Cash and Cash Equivalents

At March 31, 2026, we had $107.5 million in cash and cash equivalents, and $6.6 million in restricted cash equivalents. We believe that our current cash position, cash flow generated from operations, funds available from our credit agreement, and access to the long-term debt capital markets should be sufficient for our operating requirements and enable us to fund our capital expenditures, dividend payments, and lease obligations through the next several years. In addition, we believe we have the ability to obtain alternative sources of financing, if needed.

Long-Term Debt

In October 2022, we entered into the Fourth Amendment to our Amended and Restated Credit Agreement (as amended, the “Credit Agreement”) with Truist Bank. The Credit Agreement, which matures October 24, 2027, provides for a $80.0 million revolving credit facility. The borrowing base at March 31, 2026 was $126.7 million and the net availability was $80.0 million.

Leases

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

Cash Flows Summary

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

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

Net cash used in operating activities was $2.9 million in the first three months of 2026, compared to $6.2 million provided by operating activities during the same period in 2025. This difference resulted primarily from changes in working capital. Working capital was primarily impacted by a higher inventory increase in 2026 compared to 2025, changes in other assets and liabilities, and the timing of vendor payments and cash receipts.

Investing Activities. Cash used in investing activities increased by $0.8 million in the first three months of 2026 compared to the first three months of 2025, due to higher capital expenditures.

Financing Activities. Cash used in financing activities in the first three months of 2026 were comparable to the first three months of 2025.

Store Plans

Location or Market Opening Quarter Actual or Planned Category

Alexandria, LA Q-1-26 Closure

St. Louis, MO Q-2-26 Open

Nashville, TN Q-2-26 Open

San Angelo, TX Q-2-26 Closure

Fredericksburg, VA Q-3-26 Open

College Station, TX Q-3-26 Closure

Dallas, TX Q-4-26 Open

Houston, TX Q-4-26 Open

Pittsburgh, PA Q-4-26 Open

Atlanta, GA Q-4-26 Relocation

Houston, TX Q-1-27 Open

In April 2026, we opened our 129th store in the St. Louis, MO market.

Critical Accounting Estimates

Critical accounting estimates are those that we believe are both significant and that require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates, and we might obtain different estimates if we used different assumptions or conditions. We reviewed our accounting estimates, and none were deemed to be considered critical for the accounting periods presented in our Form 10-K. We had no significant changes in those accounting estimates since our last annual report.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures about market risk, see "Item 7A. Quantitative and Qualitative Disclosures About Market Risk,” of our Form 10-K. Our exposure to market risk has not changed materially since December 31, 2025.

Item 4. Controls and Procedures

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

There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13a-15 that occurred during the Company’s fiscal quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. We have reviewed our financial reporting process to provide reasonable assurance that we could report our financial results accurately and timely, and we will continue to evaluate the impact of any related changes to our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Information regarding legal proceedings is provided in Note L - Contingencies of the Notes to the Condensed Consolidated Financial Statements set forth in this Form 10-Q.

Item 1A. Risk Factors

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

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds

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

The Board of Directors has authorized management, at its discretion, to purchase and retire limited amounts of our Common Stock and Class A Common Stock. The program was initially approved on November 3, 1986, with additional repurchase authorizations approved on August 5, 2022 and, most recently, on February 20, 2026, when the Board authorized an additional $15.0 million. The stock repurchase program has no expiration date but may be terminated by our Board at any time.

The following table presents information with respect to our repurchase of Havertys' common stock during the first quarter of 2026:

Item 5. Other Information

During the three months ended March 31, 2026, none of our directors or officers adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits

(a)Exhibits

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

Exhibit Number Description of Exhibit (Commission File No. 1-14445)

3.1 Articles of Amendment and Restatement of the Charter of Haverty Furniture Companies, Inc. effective May 26, 2006 (Exhibit 3.1 to our Second Quarter 2006 Form 10-Q). 3.2 By-laws of Haverty Furniture Companies, Inc. as amended and restated effective February 24, 2023 (Exhibit 3.2 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022). *31.1 Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as amended. *31.2 Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as amended. **32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350. (101) The following financial statements from Haverty Furniture Companies, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in inline XBRL, include: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Statements of Cash Flows and (iv) the Notes to Condensed Consolidated Financial Statements. (104) Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

• Filed herewith.

** Furnished herewith.

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