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HAVERTYS (HVT - Free Report) is still cashing in on the big push to "nest" during the pandemic, even as the vaccine rolls out. This Zacks Rank #1 (Strong Buy) saw double digit store comparables in the fourth quarter.
HAVERTYS is a furniture retailer with 120 showrooms in 16 states in the South and Midwest. Established in 1885, this small cap company with a market cap of $658 million, specializes in the middle to upper-middle price ranges.
A Big Beat in Q4 2020
On Feb 17, Havertys reported its fourth quarter 2020 results and blew by the Zacks Consensus by $0.48. Earnings were $1.37 versus the Zacks Consensus of $0.89.
It has beat 3 out of the last 4 quarters, even as a global pandemic hit its supply chain and manufacturing capabilities.
Sales rose 12.9% to $241.3 million with comparable store sales jumping 13.7% as demand for furniture remained strong.
Havertys saw strong sales across all furniture categories in the quarter.
Mattress sales were up slightly in the fourth quarter as some supply rebounded.
However, there's still challenges with merchandise availability as manufacturers are hampered by the ongoing coronavirus outbreaks, raw material shortages and problems with shipping capacity.
Expanding in 2021
While Havertys saw a lot of sales leap online in 2020, it's still making a bet on its showrooms.
In 2021, it plans to spend $23 million to open a store in Myrtle Beach, S.C., which is a new market for the company, is putting in a new store in The Villages, Florida and will open another location in an existing market, which it didn't disclose.
It will also close one store in 2021.
It's retail square footage is expected to rise about 1% in 2021 from 2020.
2021 Earnings Estimates Rise
Not surprisingly, after that big beat in Q4 and the bullish comments about strong demand for furniture, the analysts have been raising their estimates for 2021.
The 2021 Zacks Consensus Estimate rose to $2.12 from $1.70 since the earnings announcement.
That's earnings growth of 12.8% as the company made $1.88 in 2020.
Very Shareholder Friendly
Even with the pandemic raging, Havertys still was able to pass along good news to its shareholders.
It returned $70 million to shareholders in 2020 including $14 million in quarterly dividends, which it has been paying every year since 1935.
It also paid out $36 million in special dividends and repurchased almost $20 million in common stock.
Havertys' dividend is currently yielding 2.4%.
And it finished 2020 debt free.
What more could an investor want?
Shares Near 5-Year Highs
There doesn't appear to be a slowdown in furniture demand to start 2021.
Shares of Havertys have been on a tear, adding 115% over the last year and hitting new 5-year highs.
But are they too expensive now, to get in?
Havertys has a forward P/E of 17.
That's more expensive than Ethan Allen , which is also a Zacks Rank #1 (Strong Buy), and has a forward P/E of 14.3.
But it's cheaper than RH (RH - Free Report) or Williams-Sonoma, Inc. (WSM - Free Report) , which have forward P/Es of 25.5 and 17.1, respectively.
Both are Zacks Rank #3 (Hold) stocks.
For investors looking for a retailer for the reopen trade, Havertys should be on the short list.
[In full disclosure, the author of this article owns shares of RH and WSM in her personal portfolio.]
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
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Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Image: Shutterstock
Bull of the Day: Havertys (HVT)
HAVERTYS (HVT - Free Report) is still cashing in on the big push to "nest" during the pandemic, even as the vaccine rolls out. This Zacks Rank #1 (Strong Buy) saw double digit store comparables in the fourth quarter.
HAVERTYS is a furniture retailer with 120 showrooms in 16 states in the South and Midwest. Established in 1885, this small cap company with a market cap of $658 million, specializes in the middle to upper-middle price ranges.
A Big Beat in Q4 2020
On Feb 17, Havertys reported its fourth quarter 2020 results and blew by the Zacks Consensus by $0.48. Earnings were $1.37 versus the Zacks Consensus of $0.89.
It has beat 3 out of the last 4 quarters, even as a global pandemic hit its supply chain and manufacturing capabilities.
Sales rose 12.9% to $241.3 million with comparable store sales jumping 13.7% as demand for furniture remained strong.
Havertys saw strong sales across all furniture categories in the quarter.
Mattress sales were up slightly in the fourth quarter as some supply rebounded.
However, there's still challenges with merchandise availability as manufacturers are hampered by the ongoing coronavirus outbreaks, raw material shortages and problems with shipping capacity.
Expanding in 2021
While Havertys saw a lot of sales leap online in 2020, it's still making a bet on its showrooms.
In 2021, it plans to spend $23 million to open a store in Myrtle Beach, S.C., which is a new market for the company, is putting in a new store in The Villages, Florida and will open another location in an existing market, which it didn't disclose.
It will also close one store in 2021.
It's retail square footage is expected to rise about 1% in 2021 from 2020.
2021 Earnings Estimates Rise
Not surprisingly, after that big beat in Q4 and the bullish comments about strong demand for furniture, the analysts have been raising their estimates for 2021.
The 2021 Zacks Consensus Estimate rose to $2.12 from $1.70 since the earnings announcement.
That's earnings growth of 12.8% as the company made $1.88 in 2020.
Very Shareholder Friendly
Even with the pandemic raging, Havertys still was able to pass along good news to its shareholders.
It returned $70 million to shareholders in 2020 including $14 million in quarterly dividends, which it has been paying every year since 1935.
It also paid out $36 million in special dividends and repurchased almost $20 million in common stock.
Havertys' dividend is currently yielding 2.4%.
And it finished 2020 debt free.
What more could an investor want?
Shares Near 5-Year Highs
There doesn't appear to be a slowdown in furniture demand to start 2021.
Shares of Havertys have been on a tear, adding 115% over the last year and hitting new 5-year highs.
But are they too expensive now, to get in?
Havertys has a forward P/E of 17.
That's more expensive than Ethan Allen , which is also a Zacks Rank #1 (Strong Buy), and has a forward P/E of 14.3.
But it's cheaper than RH (RH - Free Report) or Williams-Sonoma, Inc. (WSM - Free Report) , which have forward P/Es of 25.5 and 17.1, respectively.
Both are Zacks Rank #3 (Hold) stocks.
For investors looking for a retailer for the reopen trade, Havertys should be on the short list.
[In full disclosure, the author of this article owns shares of RH and WSM in her personal portfolio.]
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>