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Haverty Furniture Q1 Sales Lower than Estimates, Up Y/Y

Haverty Furniture Companies Inc. HVT reported a 1.7% increase in sales for the first quarter of 2016 to $194.5 million, better than growth of 1.4% in the preceding quarter. Sales however missed the Zacks Consensus Estimate of $201 million, possibly due to an uncertain economic scenario.

Sales improved from the preceding quarter, owing to enhanced online experience, better display for mobile devices and improved furnishing categories. However, the company is also witnessing sluggishness in the consumer spending environment, which has led to a highly promotional competitive environment in retail.

Comparable store sales increased 0.9% in the first quarter, as against a decline of 0.9% in the fourth quarter. Comps increased on the back of higher average tickets due to custom order capabilities and free in-home design service.

This home furnishing retailer also reported a 1.3% decrease in total written sales for the first quarter of 2016 and a 2.2% decrease in written comparable store sales on a year-over-year basis. The decrease can be attributed to uncertain macro-economic environment. In addition, Haverty’s stores remained closed for Easter, which occurred in March this year, versus April last year, which led to a negative impact of around 1.4%.

Haverty is scheduled to release its complete first quarter 2016 results on May 2. While we remain encouraged with the solid fundamentals of the company and its solid store expansion plans to strengthen its presence in key markets with additional or repositioned stores, difficult market conditions are expected to remain a concern in the to-be-reported quarter.

Haverty has a Zacks Rank #4 (Sell).

Stocks to Consider

A better-ranked stock in the home furnishing industry include Kirkland’s Inc. KIRK with a Zacks Rank #2 (Buy). Other stocks worth considering in the broader retail sector are American Eagle Outfitters, Inc. AEO and Express, Inc. EXPR, both carrying a Zacks Rank #1 (Strong Buy).

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AMER EAGLE OUTF (AEO): Free Stock Analysis Report
 
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HAVERTY FURNIT (HVT): Free Stock Analysis Report
 
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