Zacks Investment Research upgraded Haverty Furniture Companies Inc ( HVT ) to a Zacks Rank #1 (Strong Buy) on Jan 14, after the company reported impressive fourth quarter and full year sales on Jan 8. However, Haverty is expected to report its full year 2013 results in February.
Why the Upgrade?
On Jan 8, this home furnishing retailer reported strong sales result for the fourth quarter and full year 2013, with sales growth across its entire home furnishings line. Haverty provides quality merchandise in the middle to upper-middle price range and has a presence in 16 states in the Southern and Midwestern regions.
Sales increased 7.6% year over year to $196.2 million in the fourth quarter, in line with the Zacks Consensus Estimate, attributable to strong comparable store sales increase of 9.5%. Continued expansion of the custom order business, free in-home design service, and higher average ticket led to sales growth in the quarter. Also, Haverty's sales have been boosted by the consistent rise in home sales.
For 2013, sales grew 11.3% to $746.1 million, fueled by comparable store sales growth of 11.0%. The company's 2013 sales were also in line with the Zacks Consensus Estimate.
In addition, Haverty announced that total written sales for the fourth quarter of 2013 increased 6.3% and written comparable store sales increased 7.7% year over year. The increase was attributable to the gradual housing market recovery. The company believes that the housing market recovery will help increase sales and market share in 2014 as well.
Besides, Haverty has solid store expansion plans for 2014 to strengthen its presence in key markets with additional or repositioned stores. Haverty will open a 19,000 selling square-feet store in the Buckhead Square shopping center in Atlanta, GA in the third quarter of 2014, while it is slated to open another store in Alliance, Texas in the fourth quarter of 2014. Other than this, Haverty is relocating one of its four Orlando, Fla. stores to replace a location on S Orange Blossom Trail in Orlando. The new store will cover 30,000 selling square-feet and is expected to open in the fourth quarter of 2014.
The company is encouraged about the positive customer response to its enhanced store displays and therefore investing heavily in store improvements to better serve customers.
This retailer witnessed sharp upward estimate revisions after announcing its fourth quarter 2013 sales. The Zacks Consensus Estimate for the fourth quarter increased 5.6% and that for full year 2013 went up 3.0% over the last 7 days.
Other Stocks to Consider
Other stocks worth considering in the home furnishing industry include Kirkland's Inc ( KIRK ), Tempur Sealy International Inc ( TPX ) and Williams-Sonoma Inc. ( WSM ). While Kirkland's sports a Zacks Rank #1, Tempur Sealy and Williams-Sonoma hold a Zacks Rank #2 (Buy).