Morgan Stanley: One stock to buy, one to avoid in $45B software opportunity
In a challenging year for retailers, Haverty Furniture Companies Inc . (NYSE:HVT) stock has touched a 52-week low, dipping to $17.2. The furniture retailer, known for its wide range of home furnishings and its impressive 60.7% gross profit margins, has faced significant headwinds, reflected in the stock’s performance over the past year. According to InvestingPro analysis, the company maintains strong financial health with a current ratio of 1.82, indicating solid liquidity. Investors have witnessed a substantial decline, with HVT’s 1-year change showing a stark decrease of 43.08%. This downturn highlights the pressures faced by the company in a competitive market that has been further complicated by economic factors affecting consumer spending. Despite these challenges, HVT maintains a notable 7.4% dividend yield and has sustained dividend payments for 51 consecutive years. InvestingPro subscribers can access 12 additional investment tips and a comprehensive Pro Research Report for deeper insights into HVT’s market position.
In other recent news, Haverty Furniture Companies Inc. reported impressive financial results for the fourth quarter of 2024, exceeding earnings expectations with an EPS of $0.49, more than double the anticipated $0.23. Despite a slight revenue shortfall, with $184.4 million reported against a forecast of $185.39 million, the company maintained strong gross margins of 61.9% for the quarter. Total sales for 2024 saw a decline of 16.1% to $722.9 million, yet the company ended the year with $120 million in cash and no funded debt, indicating solid financial health.
In other developments, Havertys announced the appointment of Brendan McGill as the new Senior Vice President, General Counsel, effective April 1, 2025. McGill, bringing extensive legal and corporate governance experience, will succeed Janet E. Taylor, who is retiring after a 20-year tenure. This executive transition aligns with Havertys’ strategy to sustain its market position and pursue growth opportunities.
Looking ahead, Havertys plans to open five new stores and expand its presence in the Houston market in 2025. The company has projected gross profit margins between 60% and 60.5% for the year, alongside fixed SG&A expenses estimated at $291 million to $293 million. The company remains cautiously optimistic about market improvements in the latter part of 2025, as noted by CEO Steve Burdette.
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