Haverty Doubles Earnings as Design-Led Ticket Growth Reshapes the Furniture Retailer
Strong Momentum in Q2
Haverty Furniture's Q2 2026 results marked a clear inflection point. Earnings per share doubled to $0.32, comparable sales rose 8%, and written comps grew 12.3%. The stock has rallied 22% over the past 90 days, hitting a recent peak on August 7. The core driver: a surge in average ticket, which climbed 14% to over $3,800, buoyed by a 15.7% increase in design average ticket to over $8,800. “But the standout was average ticket, which rose 14% to over $3,800, led by design average ticket, which was up 15.7% to over $8,800.” — Steven Burdette, President and CEO · 2026-08-04 This average ticket expansion is increasingly driven by more units per sale, with management noting mid-single-digit growth in pieces per ticket. The design business now accounts for 36.5% of sales, and custom special-orders grew 23.6%.
The design-led transformation has been building for quarters. On a prior call, management noted: “Certainly, average ticket is driving that. One thing that we do look at is we have been able to drive our design tickets up by selling -- we're selling basically more pieces to the consumer.” — Steven Burdette, President and CEO · 2025-10-30 With design penetration still in the high teens of customers, there remains significant headroom.
Tariffs, Refunds, and Cost Pressures
Gross margin expanded 60 basis points to 61.4%, despite a flurry of cost pressures. The new Section 301 tariffs (10%–12.5%) were more benign than feared, and Section 232 remained at 25%. “On the tariff front, the new Section 301 tariffs that replaced the Section 122 tariffs on July 24 came in at 10% and 12.5%, giving us more confidence heading into the balance of the year.” — Steven Burdette, President and CEO · 2026-08-04 The company received $2.1 million in IEEPA tariff refunds during Q2, with $1.5 million booked to COGS. CFO Richard Hare clarified: “Excluding the impact of approximately $1.5 million in IEEPA tariff refunds recognized in cost of sales in the quarter, our gross profit margin was 60.7% in the second quarter of 2026 compared to 60.8% in the prior year quarter.” — Richard Hare, Executive Vice President and CFO · 2026-08-04 Management has been cautious about pricing actions, having learned from past cycles. “We're going to be very deliberate in that process. Obviously, our current inventories already have the tariffs baked in them.” — Steven Burdette, President and CEO · 2026-02-24 The company expects third-party refunds of $1–1.5 million later this year, providing a buffer against container rate and diesel fuel increases. Tariff refunds are thus a key lever to protect margin guidance of 60.5%–61% (excluding additional refunds). The IEEPA tariff environment remains fluid, but the company is positioned to adapt.
Outlook and Operational Flexibility
Traffic improved slightly in Q2 after a weather-impacted Q1. “But we did see a nice bounce back in traffic, and it was pretty consistent throughout the quarter and came in slightly positive.” — Steven Burdette, President and CEO · 2026-08-04 Inventory management has been strong, with levels reduced to $100.5 million and Q3 guidance of $95 million. The company is closing low-performing stores (San Angelo, College Station) while opening six new stores in H2, including its entry into Pennsylvania. CapEx is planned at $34 million.
Management remains optimistic about 2026.
The company also continues to expand its use of AI across marketing, supply chain, and customer-facing functions, a theme that is gaining traction. The design business remains the distinct competitive advantage.We are optimistic about the remainder of 2026, and here's why. Our customers remain resilient at the upper end of the market. We have had 4 consecutive quarters of positive written and delivered comp sales.
Fundamentally, Haverty has shown steady margin improvement. Total revenue has been flat for a decade, but Q2 2026's 7.7% increase signals a turnaround. Gross margin has improved from 54% a decade ago to 61.5%. With no funded debt, $104.3 million in cash, and a $100 million revolver, the balance sheet is robust. The 90-day stock rally of 22% reflects growing confidence in the company's design-led growth and tariff navigation.