Havertys Q2 2026 Earnings: Sales Rise 7.7% as EPS Doubles

Havertys (NYSE: HVT, HVT.A) reported Q2 2026 revenue of $194.9 million, up 7.7% year over year, while diluted EPS doubled to $0.32 from $0.16. Comparable-store sales rose 8.0%, and a lower SG&A ratio helped net income nearly double, although approximately $1.5 million of tariff refunds accounted for the reported gross-margin expansion. The results cover the quarter ended June 30, 2026, and were released on August 4.

Core earnings results

Sales growth was accompanied by improved expense leverage. SG&A increased by $5.8 million in absolute terms but declined to 58.0% of sales from 59.3%, allowing income before interest and taxes to grow considerably faster than revenue.

Gross profit also increased, but the reported margin benefited from IEEPA tariff refunds. Excluding that item, the underlying gross margin was essentially unchanged from the prior year.

Havertys includes substantially all occupancy and home-delivery costs in SG&A rather than cost of goods sold, so its gross margin may not be directly comparable with retailers that classify those expenses differently.

Sales and store performance

Existing locations were central to the quarter’s growth, with comparable-store sales rising 8.0%. Total written business increased 12.6%, while comparable-store written business rose 12.3%, both growing faster than recognized sales during the quarter.

Design consultants generated 36.5% of written business, up from 33.4% a year earlier. Management also cited a double-digit increase in average tickets during the Memorial Day weekend. For the first six months of 2026, the average ticket increased approximately 13.0% to $3,786 from $3,350.

Havertys opened stores in Fenton, Missouri, and Mt. Juliet, Tennessee, during the quarter. It plans to open five additional stores and complete one relocation, bringing its store count to 133 by year-end. The planned Pittsburgh entry would expand the company’s presence to 18 states.

Tariff refunds, not underlying margin, drove the GAAP expansion

The difference between reported and underlying gross margin is the quarter’s most important earnings-quality consideration. GAAP gross margin increased to 61.4%, but included approximately $1.5 million of IEEPA tariff refunds. Excluding those refunds, gross margin was 60.7%, compared with 60.8% a year earlier.

After excluding both the tariff refunds and LIFO effects, gross margin was 60.9% in both periods. This indicates that the reported 60-basis-point expansion came from the refund rather than a material improvement in the underlying margin structure.

The same adjustment affected bottom-line comparisons. Adjusted net income was $4.2 million and adjusted diluted EPS was $0.25, compared with GAAP net income of $5.3 million and diluted EPS of $0.32. The adjusted reconciliation removes the tariff refund, related interest income and associated tax effects.

Cash flow and balance sheet

Cash generation improved during the first half rather than the quarter alone. Operating cash flow benefited from a $7.8 million increase in customer deposits and a smaller inventory-related cash outflow than in the prior-year period.

All figures below cover the six months ended June 30.

Shareholder returns exceeded free cash flow during the first half. Havertys spent $16.6 million repurchasing shares and paid $10.6 million in dividends, contributing to a $20.9 million decline in cash, cash equivalents and restricted cash from the beginning of the year.

The balance sheet nevertheless remained debt-free at June 30. Havertys also increased its revolving credit capacity from $80 million to $100 million. Inventory stood at $100.5 million, compared with $96.2 million at the end of 2025 and $93.3 million a year earlier.

2026 guidance

Havertys maintained its full-year gross-margin and fixed-expense outlook but raised its variable SG&A expectation because of higher selling costs. Planned capital expenditures also increased as the company moves ahead with store expansion.

The outlook incorporates tariffs in effect as of August 4, 2026, but excludes any future IEEPA tariff refunds for indirectly sourced products.

The gross-margin range suggests the company is not treating the Q2 reported margin, which included the tariff refund, as the baseline for the full year. Meanwhile, the higher variable SG&A outlook limits some of the operating leverage that stronger sales could otherwise provide.

Risks investors should monitor

• Tariff and refund uncertainty: Q2’s reported margin improvement depended on a refund, while the 2026 outlook includes tariffs currently in effect and excludes possible future refunds. Changes in tariff costs or reimbursement timing could affect both gross profit and adjusted earnings.
• Higher selling expenses: Commission-based compensation and third-party credit costs increased during the quarter, prompting Havertys to raise its variable SG&A outlook. Continued pressure could offset part of the benefit from sales growth.
• Store expansion and capital spending: Five additional openings, one relocation and higher planned capital expenditures increase the importance of disciplined execution as Havertys enters new markets.
• Cash deployment exceeding free cash flow: First-half buybacks and dividends were more than three times free cash flow. The debt-free balance sheet provides flexibility, but the pace of capital returns and expansion spending remains an important liquidity consideration.

Summary

Havertys’ Q2 2026 results showed continued sales momentum, higher written business and improved SG&A leverage, helping earnings grow substantially faster than revenue. However, the underlying gross margin was flat after removing tariff refunds, making tariffs, variable selling costs and promotional activity central to the second-half outlook. Investors should also monitor whether cash generation keeps pace with store expansion, capital expenditures and shareholder returns.