EX-99.2 3 hvtex99212417.htm
EXHIBIT 99.2
KBCM 2017 Consumer Conference

Cautionary Note on Forward-Looking Statements (Non-GAAP, Safe Harbor) This presentation may include forward-looking statements. These statements represent the Company’s belief regarding future events that, by their nature, are uncertain and outside of our control. Havertys’ actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements. For a discussion of some of the risks and factors that could affect Havertys’ future results and financial condition, please see the description of “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2016. This presentation refers to certain non‐GAAP information which excludes the effects of pension settlement costs and certain other items recorded during the periods presented. Reconciliations of this non‐GAAP information to the most directly comparable GAAP measure are provided in the Appendix. Non-GAAP financial measures are supplemental, should not be considered a substitute for financial information presented in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management team uses these non-GAAP financial measures in assessing Havertys’ operating results, as well as when planning, forecasting and analyzing future periods. The statements in the presentation are current only as of its date, November 15, 2017.

Established 1885 IPO October 1929 Cash dividend since 1935

Retail Footprint: 124 Stores across 16 states 4.5 M retail sq.ft. 18 stores 29 stores 24 stores 18 stores 29 stores

August sales were slightly above the previous peak, and 39% above the 2009 trough.

HAVERTYS’ Strategic Advantages Attractive Target CustomerBrand StrengthAppealing Store Base in Good MarketsExclusive Merchandise – Flexibly SourcedIn-Home DesignOmnichannel CapabilitiesState-of-Art Store / Distribution SystemsFinancially Sound Experienced Management Team

Key attributes of our target consumer Style-conscious, trend aware Pays attention to value but favors right item over right price College educatedHomeownerMarriedHousehold income > $75k Seeks information from multiple sources – online & offlineLooks to social media for trends, opinions & ideas

Brand /Retailer Landscape $$$$ $$$ $$ $ Furniture Price Points

“The STORE is the most powerful physical expression of the brand”.” Steve Jobs

Strategic Use of Name Brands

Exclusive MerchandisePrimarily Havertys BrandMid- to upper middle price pointsLarge array of styles Sourced to our specsVariety of custom optionsRegional diversity

Exclusive Merchandise Variety of Styles

Exclusive Merchandise Variety of Styles

Exclusive Merchandise Variety of Styles

Strategic Sourcing Substantially all case goods are importedDirect Imports - 34% of 2016 case goods salesWork with outside designers to develop collectionsSelect factoriesUse dedicated quality control team to inspect product in factories

Price Point Array $2,399 $799 $1,199

Price Point Array $2,149 $999 $1,599

Price Point Array $1,949 $2,999 $4,999

Price Point Array $4,499 $1,799 $999

H Design: Free in-home service YTD Q3 2017 – 20.7% of sales, FY 2016 – 19.7% and 16.2% in 2015H Designer sales ticket twice overall averageStrongest in Florida and in major markets120 designers at Q3 2017

Average Ticket Drivers Custom orders – YTD Q3 – 23.5% of upholstery sales – total custom order sales up 6.2% Accessories & rugs – YTD Q3 – sales up 7.7%

Omnichannel Developing a customer experience of frictionless shopping and brand consistencyAcross devicesAcross channels At any point in the shopping journey

Key components of an omnichannel retailer (NRF) Shipping and Fulfillment Options Ability to research & shop consistently across channels Website and Mobile Optimized Experiences Customer Service Options HVTCurrentCapabilities Product information Product availability Fully responsive site2D & 3D PlannersCustomization functionality Schedule delivery across store footprintDelivery confirmation at POPSelf service FAQs & reviewsCentralized customer service across channels

Havertys.com - Display and feel mimics store presentation

Havertys.com

…and mobile

Professional Home Delivery

Optimize Flow of Product 3 DC’s in largest markets4 cross dock facilitiesExpanded FDCExpanding WDC

Total Stores $116,000,000 Other improvements $24,600,000 102 stores Remodels/expansions $44,700,000 21 stores New Locations $46,700,000 Store Capital Expenditures 2010 - 2016

Expansion – Transformation

Expansion – Transformation

Sales per square foot

Comp Sales Growth : 5 Year Stack

Net Sales and EBITDA 2014 adj. $21.6 M for pension settlement expense Net Sales(millions) EBITDA % of Sales EBITDA(millions)

Free Cash Flow and Returned to Shareholders

2017 Q3 Actual vs Prior Year

2017 YTD Q3 Actual vs Prior Year

Financial Improvement Strategic Priority Increase Sales per Square Foot Customer focusOn trend merchandiseOmnichannel engagement Driving higher gross margins Lower markdownsQuality / HandlingAssortment rationalizationSourcing Leverage Advertising Change mixMore efficient spend Reduce Capital Expenditures (Beyond 2017) Low store growthNo new DC’sCompleted Bright Inspiration & Design Centers Financial improvements driven by strategic priorities

Experienced Team Senior Leadership Clarence Smith Chairman, President and CEO Steve Burdette EVP, Operations Richard Gallagher EVP, Merchandising Richard Hare EVP, CFO Ed Clary EVP, CIO Chairman since 2012.President and CEO since 2003. Over 43 years with Havertys with experience in merchandising, distribution, and store operations. Responsible for all retail, distribution, home delivery, and customer service operations. Over 34 years with Havertys including 9 years in merchandising. Responsible for product selection, acquisition, supply chain, and marketing.Over 29 years with Havertys including 17 years in store operations. Responsible for managing financial risks, financial planning, internal and external reporting.Joined Havertys in 2017, with over 20 years of experience, most recently with Carmike Cinemas, Inc. Responsible for information technology, its applications in the business, and its integration into long-term strategy.Over 27 years with Havertys including 7 years with distribution functions as additional responsibilities.

Appendix: Reconciliation of GAAP to Non-GAAP Measures