Haverty Furniture Companies, Inc. · NYSE:HVT
Haverty Furniture Companies — KeyBanc Capital Markets Conference 2013
34 slides from Haverty Furniture Companies's conference presentation, Dec 10, 2013
Slide 1: KeyBanc Capital Markets, December 11-12, 2013
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Slide 2: Founded in 1885, IPO 1929, Cash dividend since 1935
December 11-12, 2013 • Founded in 1885 • IPO - October 1929 • Cash dividend since 1935 1 2 1
Slide 3: Retail Footprint and Customer Demographics and Psychographics
December 11-12, 2013 Retail Footprint: 119 Stores across 16 states 4.3 M retail sq.ft. Customer Demographics and Psychographics • Women • 80% own a home • Household Income $75k + • Age 35+ • Primarily driven by style • Refreshing the home for variety’s sake • Considers value, but favors selecting ri
Slide 4: Focused Business Strategy: Brand
December 11-12, 2013 Focused Business Strategy • Brand • Growth Opportunities • Operating Excellence • Returns to Stockholders 5 Focused Business Strategy • Brand • Store • Website, media and other touches • Merchandise • Growth Opportunities • Operating Excellence • Returns to Stockholder 6 3
Slide 5: The store is the most powerful physical expression of the brand
December 11-12, 2013 “The STORE is the most powerful physical expression of the brand”.” Steve Jobs 7 “The STORE is the most powerful physical expression of the brand”.” Steve Jobs 8 4
Slide 6: Havertys store imagery
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Slide 7: Havertys store imagery
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Slide 8: Havertys store imagery
December 11-12, 2013 3 HAVERTYS discover something you" 1 HAVERTYS discover something you"
Slide 9: Havertys store imagery
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Slide 10: Focused Business Strategy: Brand, Store
December 11-12, 2013 Focused Business Strategy • Brand • Store • Website, media, and other touches • Merchandise • Growth Opportunities • Operating Excellence • Returns to Stockholder 17 Havertys.com - Display and feel mimics store presentation 18 9
Slide 11: Digital and Social Media Stats
December 11-12, 2013 Social Media 220K Fans 5K 19 Digital and Social Media Stats YTD Q3 2013 • Havertys.com - Unique Visitors 6.2 M • Ratings and reviews – avg. 700 per month • Facebook – 370 K avg. weekly reach 220 K Fans • Pinterest – 4,600 Followers • Twitter – 4,800 Followers • Blog – 6,000 aver
Slide 12: Television
December 11-12, 2013 Television 21 Focused Business Strategy • Brand • Store • Website, media and other touches • Merchandise • Growth Opportunities • Operating Excellence • Returns to Stockholder 22 11
Slide 13: Merchandise
December 11-12, 2013 Merchandise • Primarily Havertys Brand • Mid- to upper middle price points • Large array of styles • Variety of custom options • Sourced to our specs 23 Strategic Use of Name Brands 24 12
Slide 14: Growth Opportunities: Macro environment
December 11-12, 2013 Focused Business Strategy • Brand • Growth Opportunities • Macro environment • Increase sales per sq. ft. • Store growth and improvements • Operating Excellence • Returns to Stockholder 25 NEW SINGLE FAMILY HOME SALES Monthly Data: Seasonally-Adjusted Annualized United States So
Slide 15: Comp-Store Sales % - Quarterly
December 11-12, 2013 27 26-P-1 Comp-Store Sales % - Quarterly 2007 2008 2009 2011 2006 2010 2012 2013 28 14
Slide 16: Annual Sales / Sq. Ft.
December 11-12, 2013 Focused Business Strategy • Brand • Growth Opportunities • Macro environment • Increase sales per sq. ft. • Store growth and improvements • Operating Excellence • Returns to Stockholder 29 Annual Sales / Sq. Ft. $220 $1,000 $206 $202 $950 $198 $200 $900 $186 $850 $180 $174 $800
Slide 17: Shifting the Media Mix
December 11-12, 2013 Focused Business Strategy • Brand • Growth Opportunities • Macro environment • Increase sales per sq. ft. • Traffic • Average Ticket • Store growth and improvements • Operating Excellence • Returns to Stockholder 31 Shifting the Media Mix 70% 60% 50% 2001 2009 40% 2010 2011 30%
Slide 18: Television
December 11-12, 2013 Television 33 34 17
Slide 19: Emails and Havertys.com
December 11-12, 2013 Emails • 2 emails per week • 1.2 million customers • Open Rates – 8 – 13 % • Click Thru – avg. 3% 35 Havertys.com 36 18
Slide 20: She is on the go
December 11-12, 2013 She is on the go..…. Customer mobile devices 37 Focused Business Strategy • Brand • Growth Opportunities • Macro environment • Increase sales per sq. ft. • Traffic • Average Ticket • Store growth and improvements • Operating Excellence • Returns to Stockholder 38 19
Slide 21: “Better” product price points
December 11-12, 2013 “Better” product price points 39 40 20
Slide 22: Special Orders Simplified; Complete the Look
December 11-12, 2013 Special Orders -- Simplified 41 Complete the Look 42 21
Slide 23: In Home Designer Program and Average Ticket Initiatives
December 11-12, 2013 FREE In Home Designer Program Limited introduction: 2012 - 19 designers serving 22 stores 2013 - 45 designers for 55 stores 2014 - 85 designers for up to 100 stores by end of the year 43 Average Ticket Initiatives - Results YTD 9 mos. 2013 • Avg. Retail Selling Price SKU up 4.3%
Slide 24: Store Growth
December 11-12, 2013 Focused Business Strategy • Brand • Growth Opportunities • Macro environment • Increase sales per sq. ft. • Store growth and improvements • Operating Excellence • Returns to Stockholder 45 Store Growth 2014 Plans New store in new market: To be announced Q-4 New store in existing
Slide 25: Bright Inspirations and Capital Expenditures Update
December 11-12, 2013 Bright Inspirations Multi-Year Store Refresh Project Total spend: approx. $34.5M on existing stores for remodels/expansions 2010 - 2014 End of 2014: Approx. 95% of store base will be new or improved 47 Capital Expenditures Update Proposed Estimated (Approximate in thousands) 201
Slide 26: Focused Business Strategy: Operating Excellence
December 11-12, 2013 Focused Business Strategy • Brand • Growth Opportunities • Operating Excellence • Returns to Stockholders 49 Approx. 50% of sales associates use the iPad …Providing tools and training to upgrade our talent to match our customer and grow our business 50 25
Slide 27: Control Expense and Maintain Quality
December 11-12, 2013 51 Control Expense and Maintain Quality • Company Owned & Operated • Standardization • Accountability Yielding fewer exceptions and more routes completed in established times 52 26
Slide 28: My Havertys
December 11-12, 2013 My Havertys Track orders online, save wish lists, create room plans, manage your e-mail preferences, .. Orders = Schedule Delivery * Follow the Truck (Day of delivery’ See Your Orders My Account * Login information * Manage Contact Information = Email offers, catalogs, and more
Slide 29: Strategic Sourcing
December 11-12, 2013 Strategic Sourcing • Over 80% of our selected case goods are imported • Direct Imports – 17% of 2012 furniture sales: • Work with outside designers to develop collections • Select factories • Use dedicated quality control team to inspect product in factories 55 Focused Business
Slide 30: Sales vs. Pretax by quarter; Gross Profit Margin
December 11-12, 2013 Sales vs. Pretax by quarter 225,000 32,000 200,000 24,000 175,000 16,000 Pretax Profit (Loss) $ thousands Net Sales $ thousands 150,000 8,000 125,000 0 100,000 -8,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2006 2007 2008 2009
Slide 31: Profitability Opportunity 2013 and 2014
December 11-12, 2013 Profitability Opportunity 2013 $60.0 10.0% Pre-Tax Income $ 9.0% $50M $50.0 $46M 8.0% $43M 7.0% $39M $40.0 $35M 6.7% 6.3% 6.0% $32M 5.9% $30.0 $28M 5.4% Pre-Tax Income 5.0% 5.0% as a % of Sales $24M 4.5% 4.0% $21M 4.1% $20.0 3.6% Gross Margin 53.6 % $17M 3.0% 3.1% Variable SG&A
Slide 32: Strong Balance Sheet and HVT Stock Price Trading Range
December 11-12, 2013 Strong Balance Sheet • No intangible assets on the balance sheet • Cash at Q3 2013 - $ 72.1 M • Own 37% of Stores and 40% of Distribution Facilities • Inventory – $ 91.6 net of LIFO reserve of $ 18.9 M • No funded borrowings • Paid $26.5 M in cash dividends over last 12 months •
Slide 33: Havertys' Strategic Advantages; Forward-Looking Statements
December 11-12, 2013 HAVERTYS’ Strategic Advantages Attractive Target Customer Appealing Store Base in Good Markets Flexibility in Sourcing Distinctive Merchandise State-of-Art Store / Distribution Systems Financially Sound – $50 million ABL not in use Experienced Team 63 Forward-Looking Statements
Slide 34: Havertys: discover something you
December 11-12, 2013 6 HAVERTYS ‘discover something your 33
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