Haverty Furniture Companies Inc: Form 10-K for the period ended Dec 31, 2025

Unless otherwise indicated by the context, we use the terms “Havertys,” “we,” “our,” or “us” when referring to the consolidated operations of Haverty Furniture Companies, Inc. and subsidiary.

Overview

Havertys is a specialty retailer of residential furniture and accessories. Our founder, J.J. Haverty began the business in 1885 in Atlanta, Georgia with one store and made deliveries using horse-drawn wagons. The Company grew to 18 stores and was incorporated in September 1929. Anticipating further growth, the Company accessed additional capital through its initial public offering in October 1929. The Company's common stock ("HVT") and Class A common stock ("HVT-A") are traded on the New York Stock Exchange (the "NYSE").

Havertys has grown to 129 stores in 17 states in the Southern and Midwest regions of the U.S. All of our retail locations are operated using the Havertys name, and we do not franchise our stores. Our brand has strong recognition in the markets we serve, and consumer surveys consistently associate Havertys with high quality, style, value, and service.

Customers

Havertys core customers are typically women in middle to upper-middle income households. They generally own homes in the suburbs, and their unique personalities are expressed through style-conscious choices that reflect an awareness of current trends. These consumers research and shop online and in-store, often engaging friends or family members in the purchasing process. They are discerning buyers, desiring furnishings that fit their style, but never sacrifice quality or value. Our marketing, merchandising, stores, online presence, and customer service are targeted to attract and meet the needs of our customers.

We have a seasoned, commissioned-based sales team serving our customers. Their product knowledge is important in helping customers evaluate Havertys' merchandise compared to our competitors. We also offer a free design service, including in-home consultations, to customers who want an in-depth personalized experience. We aim to have at least one design consultant available in each store. The average sales ticket for a customer who utilizes our free design services is generally twice that of our average sales ticket. Approximately 33.5% of our written sales in 2025 resulted from consultations with our in-home designers.

Stores

As of December 31, 2025, we operated 129 stores serving over 90 cities in 17 states with approximately 4.5 million retail square feet. Our stores range in size from 15,000 to 60,000 selling square feet, with the average being approximately 35,000 square feet. We strive for our stores to reflect the distinctive style and comfort consumers expect when purchasing their home furnishings. The store’s location and curb appeal are important to the middle to upper-middle income consumer that we target, and attractive facades complement the quality and style of our merchandise. Interior details are also important for a pleasant and inviting shopping experience. We are very intentional in having open shopping spaces and our disciplined merchandise display ensures uniformity of presentations in-store, online and in our advertising.

In 2024 we developed a program to improve the in-store experience. These changes focused on:

• more visually appealing signage,
• tagging strategies,
• new fixtures to centrally locate custom fabrics,
• optimized floor presentation of our mattress selection, and
• equipment for the design center to personalize our customer's shopping experience.

The signage, tagging and fabric fixtures are largely complete. We expect to complete the mattress floor presentation and design center portions of the program over the next two years.

Real Estate

Our goal, subject to market conditions and identifying suitable sites, is to open an average of net five new stores per year, concentrating growth within our current distribution footprint. We select new locations using demographic and market characteristics and sales potential. These locations are primarily in the form of former "big box" retail sites in the 25,000 to 35,000 square feet size range that we lease with an initial term of years and options to renew. Newly constructed sites are typically leased, though there are occasional opportunities to own the store. We continually analyze opportunities for potential relocations within markets and close retail locations that are underperforming or no longer consistent with our brand positioning. For leased locations we generally continue to operate the store until our lease expires.

The following outlines the change in our selling square footage for each of the three years ended December 31 (square footage in thousands):

The following table summarizes our store activity in 2025 and current plans for 2026.

Online Presence

We consider our website an extension of our brick-and-mortar locations and not a separate segment of our business. Further, view the interconnected shopping experience not as a specific transaction; but as a comprehensive customer journey encompassing inspiration and product research, purchase and fulfillment, and post-purchase care and support. Most customers begin their shopping process online, using the internet for inspiration and to view products and prices. Our website features a variety of helpful tools including a design center with a 3-D room planner, upholstery customization, and inspired accessories. Product reviews written by our customers are also available, which many consumers find helpful in the decision-making process.

The next stop in the purchase journey for most consumers is a visit to a store to touch, sit, and see merchandise in person. Our sales consultants use online tools to further engage our customers while they are in the store. Customers may make their purchase in the store or opt to return home and finalize their decisions, place their orders online and schedule delivery. We limit internet sales of our furniture to within our delivery network, and internet sales of a selection of our accessories to within the continental United States, excluding California. Our total sales completed online for 2025 were approximately 3.2% of our total 2025 business.

We continue to invest in our digital channels to support our customer's purchase journey from initial inspiration through design assistance. We have invested in our website to enhance presentation, expand product information, and provide customers with easier, more intuitive navigation. In 2025, we introduced a sectional configurator tool, which allows customers to build a fully custom sectional in-store or online by selecting modular pieces and visualizing the configuration in real-time with three-dimensional views. The finished custom sectional integrates seamlessly into our point-of-sale system when the customer is ready to purchase. Currently available for eight sectional collections, the configurator tool will be expanded to additional collections over time.

We believe our significant investments have improved search capabilities, site functionality, product presentation, and improving insights into customer behavior, which are each important in driving traffic, increasing conversion, and growing sales. We continue to fine-tune the content management system and find opportunities to add more automation to improve the customer experience, increase sales conversion rates through our website, and increase traffic to our stores.

Enhancements to our digital properties are critical for meeting the needs of our increasingly interconnected customers. A significant portion of the traffic in our digital channels is on mobile devices. Mobile customers expect simple and relevant digital interactions. To meet these expectations, we have invested in our digital properties to improve the overall presentation and ease of navigation for the user. We have also enhanced online product landing pages by providing more information, including related products within and beyond its larger collection.

Merchandise and Revenues

We develop our merchandise selection with the diverse taste of our typical “on-trend” customer in mind. A wide range of styles from traditional to contemporary are in our core assortment, and virtually all of the furniture merchandise we carry bears the Havertys brand. We also tailor our product offerings to the needs and tastes of the local markets we serve, emphasizing more “coastal,” “western” or “urban” looks as appropriate. Our custom upholstery programs and eclectic looks are an important part of our product mix and allow the on-trend consumer more self-expression.

We have avoided offering lower quality, promotional price-driven merchandise favored by many regional and national chains, which we believe would devalue the Havertys brand with the consumer. However, we ensure that our assortment includes merchandise that is "good", "better", and "best" to compete with retailers across varying price points. We carry nationally well-known mattress product lines such as Tempur-Pedic®, Serta®, Stearns and Foster®, Beautyrest®, and Sealy®.

Our customers use varying methods to purchase or finance their sales. As an added convenience to our customers, we offer financing by third-party finance companies. Sales financed by the third-party providers are not Havertys’ receivables; accordingly, we do not have any credit risk or servicing responsibility for these accounts, and there is no credit or collection recourse to Havertys. Approximately one-third of our sales are third-party-financed. The fees we pay to the third parties are included in our selling, general, and administrative expenses (“SG&A”) as a selling expense.

Suppliers and Supply Chain

We buy our merchandise from numerous foreign and domestic manufacturers and importers, the largest ten of which accounted for approximately 42.9% of our product purchases during 2025. Most of our wood products, or “case goods,” are imported from Asia. The majority of our upholstered products are sourced from domestic vendors.

We purchase our furniture merchandise produced in Asia through sourcing companies and also buy direct from manufacturers. We have dedicated quality control specialists on-site during production to ensure the items meet our specifications. Our direct import team works with industry designers and manufacturers in some of the best factories throughout Asia. In response to the evolving tariff environment, we have reduced our direct imports. In 2025, direct case goods represented approximately 7.3% of total purchases, and direct upholstery purchases represented 1.5%.

The longer lead times required for deliveries from overseas factories and the production of merchandise exclusively for Havertys makes it imperative for us to have both warehousing capabilities and end-to-end supply chain visibility. Our supply chain team supports the procurement process to ensure inventory levels remain within an appropriate range and reduce the number of written sales awaiting product delivery. We use real-time information to monitor our import orders from the manufacturing plant through each stage of transit, which allows us to more accurately set customer delivery dates prior to receipt of product.

Distribution and Delivery

We believe our distribution and delivery system is one of the best in the retail furniture industry and provides us with a significant competitive advantage. Our system uses a combination of three distribution centers (“DCs”) and four home delivery centers (“HDCs”). The DCs receive both domestic product and containers of imported merchandise. A warehousing management system, using radio frequency scanners, tracks each piece of inventory in real time and allows for random storage in the warehouse and efficient scheduling and changing of the workflow. The DCs are also designed to shuttle prepped merchandise up to 250 miles for next-day home deliveries and serve HDCs within a 500-mile radius. The HDCs provide service to markets within an additional 250 miles. We use third parties to handle over-the-road delivery of product from the DCs to the HDCs and market areas. We use Havertys team members for executing home delivery, an important function serving as the last contact with our customers in the purchase process. Operating standards in our warehouse and delivery functions provide measurements for determining staffing needs and increasing productivity.

Time between purchase and delivery averages 3 to 5 days for in-stock items and 5 to 7 weeks for special order items.

Human Capital Resources

As of December 31, 2025, Havertys’ total workforce was 2,392: 1,512 in our retail store operations, 671 in our warehouse and delivery points, 167 in our corporate operations, and 42 in our customer-service call centers. None of our team members is a party to a union contract.

Health and Safety

We are committed to the well-being of our team members, customers, and the communities we serve. We believe maintaining a safe, hazard-free environment is essential to the success of our business. Our strong safety program emphasizes policies and training programs to ensure our team members can return home safely every day.

Culture and Engagement

Integrity and teamwork are two of our core values, and drive our approach to everyday operations and interactions with our customers, suppliers, and team members. We believe that collaboration drives the best outcomes and value the many backgrounds, cultures, and perspectives represented in our workforce. Each person offers a unique point of view and presents a fresh perspective which supports innovation. We are committed to fostering differing perspectives across all levels of our workforce to improve our business and reflect the vibrant and thriving diversity of the communities in which we live and work.

We periodically conduct an Employee Engagement Survey as a means of measuring engagement and satisfaction and offering our team members the chance to feel heard.

Retention and Development

Our compensation programs are designed to attract, retain, and motivate team members to achieve superior results. Havertys’ total compensation for team members comprises a variety of components, including competitive pay consistent with positions, skill levels, experience, and knowledge. We also offer competitive benefits, including access to healthcare plans, financial and physical wellness programs, paid time off, parental leave and retirement benefits.

We are committed to supporting our team members’ continuous development of professional, technical and leadership skills through corporate training programs, access to digital learning resources and through partnerships with local technical learning institutions. In 2025, Havertys team members consumed approximately 105,000 hours of learning. We also offer the opportunity for team members to pursue degree programs, professional certificates, and individual courses in strategic fields of study through our tuition reimbursement program.

Competition

The retail sale of home furnishings is a highly fragmented and competitive business. The degree and sources of brick-and-mortar retail competition varies by geographic area. We compete with numerous individual retail furniture stores as well as national and regional chains. Retail stores opened or operated by furniture manufacturers compete with us in certain markets in an effort to control and protect the distribution prospects of their branded merchandise. Mass merchants, certain department stores, and some electronics and appliance retailers also have limited furniture product offerings. We also face competition in the e-commerce channel from internet-only retailers, start-up furniture retailers, and larger, more established retailers, including those with a brick-and-mortar presence.

We believe Havertys is uniquely positioned in the marketplace, with a curated merchandise assortment that appeals to customers who are generally more affluent than those served by promotional, price-oriented furniture stores. Our online presence provides most elements of a seamless, interconnected approach that many of our competitors do not have. We consider our internal management of customer facing operations, custom order capabilities, free design service, tailoring of merchandise by local market, and the ability to make prompt delivery of orders through maintenance of inventory to be significant competitive advantages.

Seasonality

Our business is affected by traditional retail seasonality, advertising and promotion programs, and general economic trends. We experience increased shopping activity on weekends and during traditional extended holiday periods.

Trademarks and Domain Names

We have registered our various logos, trademarks, and service marks. We believe that our trademark position is adequately protected in all markets in which we do business. In addition, we have registered and maintain numerous internet domain names including “havertys.com.” Collectively, the logos, trademarks, service marks and domain names that we hold are of material importance to us.

Available Information

Our internet website address is www.havertys.com (http://www.havertys.com). Information about us is within this 2025 Form 10-K, and on our Investor Relations website at www.ir.havertys.com (http://www.ir.havertys.com). This website contains additional information about us, including our corporate governance principles and practices and financial and other information. We are not including this or any other information on our website as a part of, nor incorporating it by reference into, this 2025 Form 10-K or any of our other filings with the Securities and Exchange Commission ("SEC").

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are available free of charge on our website at www.ir.havertys.com (http://www.ir.havertys.com) as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The SEC also maintains a website that contains our SEC filings at www.sec.gov (http://www.sec.gov).

The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding any statement in this annual report on Form 10-K or elsewhere. The following information should be read in conjunction with Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (MD&A), and the consolidated financial statements and related notes in Part II, Item 8. “Financial Statements and Supplementary Data” of this annual report on Form 10-K.

We routinely encounter and address risks, some of which may cause our future results to be different – sometimes materially different – than we presently anticipate. The following factors, as well as others described elsewhere in this report or in our other filings with the SEC, that could materially affect our business, financial condition or operating results should be carefully considered. Below, we describe certain important operational and strategic risks and uncertainties, but they are not the only risks we face. Our reactions to material future developments, as well as our competitors’ reactions to those developments, may also impact our business operations or financial results. If any of the following risks actually occur, our business, financial condition or operating results may be adversely affected.

Risks Related to Our Business

An overall decline in the health of the economy and consumer spending may affect consumer purchases of discretionary items, which could reduce demand for our products and materially harm our sales, profitability and financial condition.

Historically, the home furnishings industry has been subject to cyclical variations in the general economy. Our business depends on consumer demand for our products and, consequently, is sensitive to a number of factors that influence general consumer spending on discretionary items, including home furnishings in particular. Factors influencing consumer spending include:

• general economic conditions,
• consumer disposable income,
• fuel prices,
• inflation,
• recession and fears of recession,
• unemployment,
• inclement weather,
• availability of consumer credit,
• consumer debt levels,
• conditions in the housing market,
• interest rates,
• sales tax rates and rate increases,
• sustained periods of inflation,
• civil disturbances and terrorist activities,
• foreign currency exchange rate fluctuations,
• consumer confidence in future economic and political conditions,
• natural disasters, and
• consumer perceptions of personal well‑being and security, including health epidemics or pandemics.

Prolonged or pervasive economic downturns could slow the pace of new store openings or cause current stores to temporarily or permanently close. Adverse changes in factors affecting discretionary consumer spending have reduced and may continue to further reduce consumer demand for our products, thus reducing our sales and harming our business and operating results.

We face significant competition from national, regional and local retailers of home furnishings.

The retail market for home furnishings is highly fragmented and intensely competitive. We currently compete against a diverse group of retailers, including internet-only retailers, regional or independent specialty stores, dedicated franchises of furniture manufacturers and national retailers and department stores. In addition, there are few barriers to entry into our current and contemplated markets, and new competitors may enter our current or future markets at any time. Our existing competitors or new entrants into our industry may use a number of different strategies to compete against us, including aggressive advertising, pricing and marketing, social media campaigns and extension of credit to customers on terms more favorable than we offer. Furthermore, some of our competitors have greater financial resources and larger customer bases than we have, and as a result may have a more advanced multichannel platform, be able to adapt quicker to changes in consumer behavior, have attractive customer loyalty programs, and maintain higher profitability in an aggressive low-pricing environment.

Competition from any of these sources could cause us to lose market share, revenues and customers; increase expenditures; or reduce prices, any of which could have a material adverse effect on our results of operations.

Risks Related to Our Retail Operations and Marketing

If we fail to successfully anticipate or respond to changes in our target consumer's product and shopping channel preferences in a timely manner, our sales may decline.

Our products must appeal to our target consumers whose preferences, tastes and trends cannot be predicted with certainty and are subject to change. We continuously monitor changes in home design trends through attendance at international industry events and fashion shows, internal marketing research, and regular communication with our retailers and design professionals who provide valuable input on consumer tendencies. However, as with all retailers, our business is susceptible to changes in consumer tastes and trends. Our success depends upon our ability to anticipate and respond in a timely manner to fashion trends relating to home furnishings. If we fail to successfully identify and respond to these changes, our sales may decline.

Omni-channel retailing continues to rapidly evolve. Our success depends, in part, on our ability to anticipate and implement innovations in client experience and logistics in order to appeal to customers who increasingly rely on multiple channels to meet their shopping needs. If for any reason we are unable to continue to implement our omni-channel initiatives or provide a convenient and consistent experience for our clients across all channels that deliver the products they want, when and where they want them, our financial performance and brand image could be adversely affected.

Inability to maintain and enhance our brand may materially adversely impact our business.

Maintaining and enhancing our brand is critical to our ability to retain and expand our base of customers and may require us to make substantial investments. Our advertising campaigns utilize digital, television, and social media to maintain and enhance our existing brand equity. We cannot provide assurance that our marketing, advertising, and other efforts to promote and maintain awareness of our brand, grow our business, attract new clients and retain existing clients will be successful and we may incur substantial costs in such efforts. Furthermore, our brand and reputation could be harmed by negative media, including social media, attention, negative online reviews, cybersecurity incidents, product liability or safety concerns or other matters. If our marketing, advertising, and other efforts are unsuccessful or our brand or reputation is damaged, our business, operating results and financial condition could be adversely affected.

Our future success is largely dependent on our ability to successfully implement our growth and other strategies.

Our future success, including our ability to achieve growth and increased profitability, is dependent on the ability of our management team to execute on our long-term business strategy, which includes:

• increasing our retail footprint,
• expanding our online presence,
• increasing the efficiency and profitability of our operations,
• introducing new products in the marketplace, and driving increased traffic to our retail stores and e-commerce site through updated marketing efforts, and
• providing excellent service to our customers.

If any of these initiatives are not successful, or require extensive investment beyond our expectations, our growth may be limited, and we may be unable to achieve or maintain expected levels of growth and profitability. Furthermore, our ability to expand our retail footprint is dependent on our ability to identify, secure and develop new retail locations, which involves factors outside of our control.

Our ability to attract clients to our stores depends heavily on successfully locating our stores in suitable locations.

We believe our stores and our customer’s store experience are key for generating and increasing revenue. Historically we have favored locations that we believe are consistent with our target clients’ demographics and shopping preferences and we plan to open new stores in high traffic locations. Revenues at our stores are derived, in part, from the volume of foot traffic in these locations.

Store locations may become unsuitable due to, and our revenue volume and client traffic generally may be harmed by, among other things:

• economic downturns in a particular area;
• competition from nearby retailers selling similar products;
• changing client demographics in a particular market;
• changing preferences of clients in a particular market;
• the closing or decline in popularity of other businesses located near our store;
• reduced client foot traffic outside a store location; and
• store impairments due to acts of God, pandemic, terrorism, protest or periods of civil unrest.

If a store location becomes unsuitable, we will generally be unable to cancel the long-term lease associated with such store.

Risks Related to Merchandising and Supply Chain Operations

We import a substantial portion of our merchandise from foreign sources, which exposes us to political and economic risks inherent in global sourcing.

Based on product costs, approximately 63% of our total furniture purchases in 2025 were for goods that were not produced domestically. Additionally, some of the products we purchase from U.S.-based vendors are sourced, at least in part, from foreign suppliers. Therefore, we are subject to risks associated with foreign sourcing of our merchandise, including but not limited to:

• existing, new, or increased tariffs and other import measures;
• foreign regulations that may impact the availability or cost of supply of our products;
• economic uncertainties, including inflation and the financial instability of vendors;
• fluctuations in foreign currency exchange rates; and
• political instability, geopolitical or military conflicts or acts of war, and act of terrorism or violence,
• including any related sanctions or other government or private responses.

Some of the products we purchase are also subject to tariffs and other import measures. During 2025, the current U.S. presidential administration announced its intention and, in some cases, took actions to increase tariffs at various rates, including on certain products imported from many countries and individualized higher tariffs on certain other countries. These tariffs were imposed under various regulations, including the International Emergency Economic Powers Act (“IEEPA”). In response, certain countries announced reciprocal tariffs or other similar actions. These tariffs have since been followed by announcements of limited exemptions and temporary pauses in some cases. In addition, the United States Supreme Court recently invalidated the tariffs the administration imposed under IEEPA. Following the Supreme Court’s decision, the administration has announced new tariffs under different authority and the intention to announce additional tariffs in the future.

We are subject to risks relating to increased tariffs on U.S. imports and other changes affecting imports and finished goods manufactured in foreign countries. The recent enactment of these tariffs, along with the unpredictability of the applicable tariff rates, poses a risk to our business operations and may materially increase our costs and reduce our margins.

If additional tariffs are imposed on the products we import or the tariff rates are increased, our vendors may increase their prices. Such changes, if they occur, could have one or more of the following impacts:

• we could be forced to raise retail prices so high that we are unable to sell the products at current unit volumes;
• if we are unable to raise retail prices commensurately with the cost increases, gross profit as recognized under our LIFO inventory accounting method could be negatively impacted; or
• we may be forced to find alternative sources of comparable product, which may be more expensive than the current product or of lower quality, or the vendor may be unable to meet our requirements for quality, quantities, delivery schedules or other key terms.

There continues to be significant uncertainty about the future relationship between the U.S. and other countries regarding such trade policies, treaties and tariffs. As such, we can make no assurances about the eventual impact on our consolidated operating results and business. The introduction of any additional tariffs by the U.S. and reciprocal tariffs by other countries is expected to result in incremental costs of our products, which we may be unable to pass on to our customers. In addition, all our purchases are denominated in U.S. dollars. As exchange rates between the U.S. dollar and certain other currencies become favorable, the likelihood of price increases from our vendors increases.

We are dependent upon the ability of our third-party producers to meet our requirements; any failures by these producers, or the unavailability of suitable suppliers at reasonable prices or limitations on our ability to source from third-party producers may negatively impact our ability to deliver quality merchandise to our customers on a timely basis or result in higher costs or reduced net sales.

We source substantially all of our products from non-exclusive, third-party producers, many of which are located in foreign countries. Although we have long-term relationships with many of our suppliers, we must compete with other companies for the production capacity of these independent manufacturers. We regularly depend upon the ability of third-party producers to secure a sufficient supply of raw materials, develop a skilled workforce, adequately finance the production of goods ordered and maintain sufficient manufacturing and shipping capacity. Although we monitor production and quality in many third-party manufacturing locations, we cannot be certain that we will not experience operational difficulties with our manufacturers, such as the reduction of availability of production capacity, errors in complying with product specifications, insufficient quality control, failures to meet production deadlines or increases in manufacturing costs. Such difficulties may negatively impact our ability to deliver quality products to our customers on a timely basis, which may, in turn, have a negative impact on our customer relationships and result in lower net sales.

We also require third-party producers to meet certain standards in terms of working conditions, environmental protection and other matters before placing business with them. As a result of costs relating to compliance with these standards, we may pay higher prices than some of our competitors for products. In addition, failure by our independent manufacturers to adhere to ethical labor or other laws or business practices, and the potential litigation, negative publicity and political pressure relating to any of these events, could disrupt our operations or harm our reputation.

Our vendors might fail in meeting our quality control standards or reacting to changes to the legislative or regulatory framework regarding product safety.

All of our vendors must comply with applicable product safety laws and regulations, and we are dependent on them to ensure that the products we buy comply with all safety standards as well as applicable quality standards. Any actual, potential or perceived product safety concerns could expose us to government enforcement action or private litigation and could result in recalls and other liabilities. Such exposure could harm our brand’s image and negatively affect our business and operating results. Furthermore, concerns around the quality of the products we sell could damage our reputation and result in loss of future revenues.

Significant fluctuations in the price, availability and quality of raw materials and components could adversely affect our profits.

The primary materials our vendors use to produce and manufacture our products are various woods and wood products, resin, steel, leather, cotton, and certain oil-based products. On a global and regional basis, the sources and prices of those materials and components are susceptible to significant price fluctuations due to supply and demand trends, transportation costs, government regulations and tariffs, changes in currency exchange rates, price controls, the economic and political climate, and other unforeseen circumstances. In addition, supply chain challenges, including shutdowns and shipping delays, can adversely impact our business. Such supply chain disruptions could affect the ability of our suppliers to fulfil our orders in a timely manner, if at all, and could lead to increased prices, which we may not be able to pass through to our customers.

Our revenue can be adversely affected by our ability to successfully forecast our supply chain needs and our foreign manufacturers’ ability to comply with international trade rules and regulations.

Optimal product flow is dependent on demand planning and forecasting, supplier production according to such planning, and timely transportation. We often make commitments to purchase products from our vendors in advance of proposed production dates. Significant deviation from the projected demand for products that we sell may have an adverse effect on our results of operations and financial condition, either from lost sales or lower margins resulting from inventory-driven price reductions. Disruptions to our supply chain could result in late product arrivals. Increased levels of out-of-stock merchandise and loss of confidence by customers in our ability to deliver goods as promised could negatively affect sales.

In addition, there is a risk that compliance lapses by our foreign manufacturers could occur which could lead to investigations by U.S. government agencies responsible for international trade compliance. Resulting penalties or enforcement actions could delay future imports or otherwise negatively impact our business. There also remains a risk that one or more of our foreign manufacturers will not adhere to applicable legal requirements or our compliance standards such as fair labor standards, the prohibition on child labor and other product safety or manufacturing safety standards. The violation of applicable legal requirements, including labor, manufacturing and safety laws, by any of our manufacturers, the failure of any of our manufacturers to adhere to our global compliance standards or the divergence of the labor practices followed by any of our manufacturers from those generally accepted in the U.S. could:

• disrupt our supply of products from our manufacturers,
• result in potential liability to us, or
• harm our reputation and brand.

Any violation of legal requirements by our vendors could negatively affect our business and operating results.

We rely on third party transportation providers for substantially all of our product shipments from our vendors.

We rely on third party service providers for substantially all of our product shipments from our vendors, both domestic and foreign, to our DCs and also to handle over-the-road delivery of product from the DCs to our HDCs and some market areas. Our and our vendors’ utilization of these shipping services is subject to risks that are outside of our control, including increases in fuel prices and labor costs, employee strikes, labor shortages, union organizing activity, delays in shipping (including congestion at domestic and foreign ports), delays in unloading cargo from ships, availability of adequate trucking or railway providers, adverse weather, natural disasters, possible acts of terrorism and outbreaks of disease. All of these risks may impact our ability to receive products from our vendors to necessary points in our distribution system in a cost-effective and timely manner.

Any increases in these shipping costs may result in higher costs to us, and we may be unsuccessful in passing along these costs to our customers, negatively impacting our margins and profitability. Furthermore, any delays in receiving products may negatively impact our ability to deliver these products to our customers in a timely manner. Failure to make timely customer deliveries or long lead times for products could cause customers to cancel their orders or not place orders, which, could damage our brand and reputation and negatively impact our business, financial condition, operating results and prospects.

Because of our limited number of distribution centers, our operating results could suffer if one is damaged.

We utilize three large distribution centers to flow our merchandise from the vendor to the consumer. This system is very efficient for reducing inventory requirements but makes us operationally vulnerable should one of these facilities become damaged or experience significant business interruption. If such an interruption were to occur, our ability to deliver our products in a timely manner would likely be impacted.

Risks Related to Technology and Data Security

We rely extensively on information technology systems to process transactions, summarize results, and manage our business. Disruptions in our information technology systems could adversely affect our business and operating results.

Our ability to operate our business from day to day, in particular our ability to manage our point-of-sale, distribution system and payment information, largely depends on the efficient operation of our computer hardware and software systems. We use management information systems to communicate customer information, provide real-time inventory information, and to handle all facets of our distribution system from receipt of goods in the DCs to delivery to our customers’ homes. These systems are subject to damage or interruption from power outages, computer and telecommunications failures, viruses, phishing attempts, cyber‑attacks, malware and ransomware attacks, security breaches, severe weather, natural disasters, and errors by employees.

The failure of these systems to operate effectively, problems with integrating various data sources, challenges in transitioning to upgraded or replacement systems, difficulty in integrating new systems, or a breach in security of these systems could adversely impact the operations of our business. Though losses arising from some of these issues would be covered by insurance, interruptions of our critical business information technology systems or failure of our back-up systems could result in longer production times or negatively impact customers resulting in damage to our reputation and a reduction in sales. If our critical information technology systems or back-up systems were damaged or ceased to function properly, we might have to make a significant investment to repair or replace them.

We have and plan to continue to partner with third parties that utilize artificial intelligence (“AI”) tools and to invest in AI technologies to enhance our customers’ shopping experience and our employees’ work experience and to improve efficiencies of our supply chain, operations, management functions and talent recruitment and development. These are evolving technologies and there are inherent operational and legal complexities associated with implementation of these technologies within our business. When integrating and introducing AI technologies into our platforms, processes and systems, we may be exposed to new or expanded liabilities and risks due to evolving governmental regulations, litigation, data privacy risks and compliance issues in a disparate and at times conflicting regulatory environment, all of which could negatively affect our financial performance and business reputation.

Successful cyber-attacks and the failure to maintain adequate cyber-security systems and procedures could materially harm our business.

Cyber threats are rapidly evolving, and those threats and the means for obtaining access to information in digital and other storage media are becoming increasingly sophisticated. Cyber threats and cyber-attackers, including ransomware attacks, can be sponsored by countries or sophisticated criminal organizations or be the work of single “hackers” or small groups of “hackers.”

We invest in industry standard security technology to protect the Company’s data and business processes against risk of data security breach and cyber-attack. Our data security management program includes identity, trust, vulnerability and threat management business processes as well as adoption of standard data protection policies. We measure our data security effectiveness through industry accepted methods. We are continuously installing new and upgrading existing information technology systems. We use employee awareness training around phishing, malware, and other cyber risks to ensure that the Company is protected, to the greatest extent possible, against cyber risks and security breaches. We are regularly the target of attempted cyber and other security threats and must continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact. Insider or employee cyber and security threats are increasingly a concern for all companies, including ours. Additionally, we certify our major technology suppliers and any outsourced services through accepted security certification standards.

Nevertheless, as cyber threats evolve, change and become more difficult to detect and successfully defend against, one or more cyber-attacks might defeat our or a third-party service provider’s security measures in the future and could result in the leak of personal information of customers, employees or business partners. Employee error or other irregularities may also result in a failure of our security measures and a breach of information systems. Moreover, hardware, software or applications we use may have inherent defects of design, manufacture or operations or could be inadvertently or intentionally implemented or used in a manner that could compromise information security. A security breach and loss of information may not be discovered for a significant period of time after it occurs. While we have no knowledge of a material security breach to date, any compromise of data security could result in a violation of applicable privacy and other laws or standards, the loss of valuable business data, or a disruption of our business. In addition, the costs to eliminate or alleviate network security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful and could result in potential theft, loss, destruction or corruption of information we store electronically, as well as unexpected interruptions, delays or cessation of service, any of which could cause harm to our business operations.

Moreover, a security breach involving the misappropriation, loss or other unauthorized disclosure of sensitive or confidential information could give rise to unwanted media attention, materially damage our customer relationships and reputation, and result in litigation or fines, fees, or potential liabilities, which may not be covered by our insurance policies, each of which could have a material adverse effect on our business, results of operations and financial condition.

Risks Related to Human Capital

We may be unable to attract, train, engage and retain key employees.

Our long-term success and ability to implement our strategic and business planning goals depends on our ability to attract, motivate and retain a sufficient number of store and other employees who understand and appreciate our corporate culture and customers. Turnover in the retail industry is generally high. Excessive employee turnover will result in higher employee costs associated with finding, hiring and training new store employees. Furthermore, labor shortages and competition may make it more difficult for us to adequately staff our retail stores and distribution operations and may result in increased labor expenses to us. If we are unable to hire and retain store and other personnel capable of consistently providing a high level of customer service, our ability to open new stores and service the needs of our customers may be impaired, the performance of our existing and new stores and operations could be materially adversely affected and our brand image may be negatively impacted.

We must also be able to attract, motivate and retain the employees who staff our distribution centers, customer service centers, and deliver product to our customers, and professionals to implement our technology and other strategic initiatives. Our ability to meet our labor needs while controlling labor costs is subject to numerous external factors, including market pressures with respect to prevailing wage rates, equity compensation, unemployment levels, and health and other insurance costs; the impact of legislation or regulations governing labor and employee relations, immigration, federal and state minimum wage requirements, and benefit costs; changing demographics; and our reputation within the labor market. If we are unable to attract and retain a workforce that meets our needs, our operations, service levels, support functions, and competitiveness could suffer and our results could be adversely affected.

A failure to recruit, develop and retain effective leaders or the loss or shortage of personnel with key capacities and skills could impact our strategic growth plans and jeopardize our ability to meet our business performance expectations and growth targets.

Our ability to continue to grow our business depends substantially on the contributions and abilities of our executive leadership team and other key management personnel. Changes in senior management could expose us to significant changes in strategic direction and initiatives. A failure to maintain appropriate organizational capacity and capability to support our strategic initiatives or to build adequate bench strength with key skill sets required for seamless succession of leadership, could jeopardize our ability to meet our business performance expectations and growth targets. If we are unable to attract, develop, retain and incentivize sufficiently experienced and capable management personnel, our business and financial results may suffer.

General Risks

Our operations present risks which may not be fully covered by insurance.

We carry insurance that we believe is appropriate and customary in our industry. However, some losses and liabilities associated with our operations may not be covered by our insurance policies. In addition, there can be no assurance that we will be able to obtain similar insurance coverage on favorable terms (or at all) in the future. Significant uninsured losses and liabilities could have an adverse effect on our financial condition and results of operations. Furthermore, our insurance is subject to deductibles.

We are self-insured for our health benefits and maintain per employee stop loss coverage; however, we retain the insurable risk at an aggregate level. Therefore unforeseen or catastrophic losses in excess of our insured limits could have an adverse effect on the Company’s financial condition and operating results.

We are subject to governmental regulations and may be subject to enforcement if we are not in compliance with applicable regulation, and changes in laws could make conducting our business more expensive or otherwise change the way we do business.

We are subject to a broad range of federal, state and local laws and regulations in connection with our core business, including labor and employment, customs, privacy and cybersecurity, health and safety, real estate, environmental and zoning and occupancy laws, and other laws and regulations that otherwise govern our business. Our products and their manufacturing, labeling, marketing and sale are also subject to various aspects of the Federal Trade Commission Act, state consumer protection laws and state warning and labeling laws. In addition, various jurisdictions may seek to adopt similar or additional product labeling or warning requirements.

As a retail business, changes in laws related to employee benefits and treatment of employees, including laws related to limitations on employee hours, supervisory status, leaves of absence, mandated health benefits or overtime pay, could negatively impact our business increasing compensation and benefits costs for overtime and medical expenses. Changes to U.S. health care laws, or potential global and domestic greenhouse gas emission requirements and other environmental legislation and regulations, could result in increased direct compliance costs for us (or may cause our vendors to raise the prices they charge us in order to maintain profitable operations because of increased compliance costs), increased transportation costs or reduced availability of raw materials.

Failure by us, our manufacturers, or our vendors to comply with applicable laws and regulations or to obtain and maintain necessary permits, licenses, and registrations relating to our operations could subject us to administrative and civil penalties, including significant fines, civil liability, criminal liability or sanctions, or other enforcement actions. Any of these actions could result in a material effect on our operating results, business and financial condition, including increased operating costs.

Our business involves receiving, processing, storing, using and sharing data, some of which contains personal information. We are subject to complex and rapidly evolving laws and contractual obligations addressing data protection, and companies are under increased regulatory scrutiny with respect to privacy and data security. The interpretation and application of existing laws regarding this subject are continuing to evolve and many states are considering new regulations in this area. Applicable U.S. privacy laws or new state or federal laws may limit our ability to collect and use data, require us to modify our data processing practices or result in the possibility of fines, litigation or orders which may have an adverse effect on our business and results of operations. We cannot yet fully determine the impact that such future privacy requirements may have on our business or operations. The burdens imposed by these and other laws and regulations that may be enacted, or new interpretations of existing laws and regulations, may also require us to incur substantial costs to reach compliance, change the manner in which we use data, and adversely affect the profitability of our private label credit card program.

In addition, to the extent we expand our operations as a result of engaging in new business initiatives or product lines, or expanding into new markets, we may become subject to new regulations and regulatory regimes. In addition to increased regulatory compliance, if the regulations applicable to our business operations were to change, it could make conducting our business more expensive or otherwise change the way we do business. We may need to continually reassess our compliance procedures, personnel levels and regulatory framework in order to keep pace with our business initiatives, and there can be no assurance that we will be successful in doing so.

Failure by us, our manufacturers, or our vendors to comply with applicable laws and regulations or to obtain and maintain necessary permits, licenses, and registrations relating to our operations could subject us to administrative and civil penalties, including significant fines, civil liability, criminal liability or sanctions, or other enforcement actions. Any of these actions could result in a material effect on our operating results, business and financial condition, including increased operating costs.

Failure to protect our intellectual property could materially adversely affect us.

We believe that our copyrights, trademarks, service marks, trade secrets, and all of our other intellectual property are important to our success. We rely on trademark, copyright and trade secret laws, and confidentiality and restricted use agreements, to protect our intellectual property and may seek licenses to intellectual property of others. Some of our intellectual property is not covered by any patent, trademark, or copyright or any applications for the same. In addition, we cannot provide assurance that agreements designed to protect our intellectual property will not be breached, that we will have adequate remedies for any such breach, or that the efforts we take to protect our proprietary rights will be sufficient or effective. Any significant impairment of our intellectual property rights or failure to obtain licenses of intellectual property from third parties could harm our business or our ability to compete. Moreover, we cannot provide assurance that the use of our technology or proprietary know‐how or information does not infringe the intellectual property rights of others. If we have to litigate to protect or defend any of our rights, such litigation could result in significant expense to our business.

Pending or unforeseen litigation and the potential for adverse publicity associated with litigation could have a material adverse effect on us.

We are involved from time to time in various legal proceedings arising in the ordinary course of our business, including commercial, consumer safety, product liability, employment and intellectual property claims. We currently do not expect the outcome of any pending matters to have a material adverse effect on our consolidated results of operations, financial position or cash flows. Litigation, however, is inherently unpredictable, and it is possible that the ultimate outcome of one or more pending claims asserted against us, or claims that may be asserted in the future that we are currently not aware of, or adverse publicity resulting from any such litigation, could adversely impact our business, reputation, sales, profitability, cash flows and financial condition. Furthermore, there is no guarantee that our insurance program will cover all such legal proceedings or be sufficient to cover losses resulting from such proceedings.

Our business may be adversely affected by natural disasters, public health events, geopolitical instability, or other disruptive events.

Our operations, supply chain, and customer demand may be negatively affected by natural or man‑made disasters or other disruptive events, including severe weather, fires, power or utility interruptions, public health events, social unrest, or geopolitical instability. Many of our vendors and logistics partners are located in areas that may be vulnerable to such events, which could disrupt the production, availability, or transportation of our merchandise.

In addition, such events may adversely affect consumer spending patterns or overall economic conditions. If any of our distribution facilities, stores, or customer service operations were significantly disrupted or forced to close, we could experience inventory shortages, increased costs, delays in fulfilling customer orders, or lost sales. Future large‑scale events could present challenges that are difficult to anticipate or mitigate. Any of these factors could adversely affect our business, results of operations, or financial condition.

Risk management and strategy

We have processes in place to identify, assess and monitor material risks from cybersecurity threats. These processes are part of our overall enterprise risk management process and are part of our operating procedures, internal controls, and information systems. These risks include, among other things, operational risks; fraud; extortion; harm to employees or customers; violation of privacy or security laws and other litigation and legal risk; and reputational risks. We have developed and implemented a cybersecurity framework intended to assess, identify and manage risks from threats to the security of our information, systems, and network using a risk-based approach. The framework is informed in part by the National Institute of Standards and Technology (NIST) Cybersecurity Framework, although this does not imply that we meet all technical standards, specifications, or requirements under the NIST.

Our key cybersecurity processes include the following:

• Risk-based controls for information systems and information on our networks: We seek to maintain an information technology infrastructure that implements physical, administrative and technical controls that are calibrated based on risk and designed to protect the confidentiality, integrity and availability of our information systems and information stored on our networks, including customer and employee information.
• Cybersecurity incident response plan and testing: We have a cybersecurity incident response plan and dedicated teams to respond to cybersecurity incidents. When a cybersecurity incident occurs or we identify a vulnerability, we have cross-functional teams that are responsible for leading the initial assessment of priority and severity, and external experts may also be engaged as appropriate. Our cybersecurity teams assist in responding to incidents depending on severity levels and seek to improve our cybersecurity incident management plan through periodic tabletops or simulations.
• Training: We provide security awareness training to help our employees understand their information protection and cybersecurity responsibilities. We also provide additional training to some employees based their roles.
• Supplier risk assessments: Our processes also address cybersecurity threat risks associated with our use of third-party service providers, including those in our supply-chain or who have access to our customer and employee data on our systems. Third-party risks are included within our risk management assessment program, as well as our cybersecurity-specific risk identification program. These considerations affect the selection and access to our systems, data, or facilities. We also seek contractual commitments from key suppliers to appropriately secure and maintain their information technology systems and protect our information that is processed on their systems.
• Third-party assessments: We have third-party cybersecurity companies engaged to periodically assess our cybersecurity posture, to assist in identifying and remediating risks from cybersecurity threats. We have implemented several cybersecurity processes, technologies, and controls to aid in our efforts to assess, identify, and manage such risks.

As part of the above processes, we regularly engage with consultants, auditors, and other third-parties, including reviewing our cybersecurity program to help identify areas for continued focus, improvement and/or compliance.

To date, risks from cybersecurity threats or incidents have not materially affected the Company. However, the sophistication of and risks from cybersecurity threats and incidents continues to increase, and the preventative actions we have taken and continue to take to reduce these risks and protect our systems and information may not successfully protect against all cybersecurity threats and incidents. For more information on how cybersecurity risk could materially affect our business strategy, results of operations, or financial condition, please refer to Item 1A Risk Factors.

Cybersecurity Governance

The Board of Directors, as a whole, has oversight responsibility for our strategic and operational risks. The Audit Committee regularly reviews and discusses with management the strategies, processes, and controls pertaining to the management of our information technology operations, including cyber risks and cybersecurity. Our Chief Information Officer (CIO) and other internal members of our technology team provide regular reports to the Audit Committee regarding the evolving cybersecurity landscape, including emerging risks, as well as our processes, programs, and initiatives for managing these risks. The Audit Committee, in turn, periodically reports on its review with the Board of Directors.

Management is responsible for day-to-day assessment and management of cybersecurity risks. Our cybersecurity risk management and strategy processes are led by our CIO and Assistant Vice President (AVP) of IT Infrastructure and Security. Such individuals have collectively over 50 years of work experience in various roles managing information security, developing cybersecurity strategy, and implementing effective information and cybersecurity programs.

Periodically, the CIO also presents to the Board an overview of our cybersecurity threat risk management and strategy processes covering topics such as data security posture, results of third-party assessments, our incident response plan, and cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks.

Stores

Our retail store space at December 31, 2025 totaled approximately 4.5 million square feet for 129 stores. The following table sets forth the number of stores we operated at December 31, 2025 by state:

Distribution Facilities

All of our distribution facilities at December 31, 2025 were leased except for the Florida and Virginia properties. Our regional distribution facilities are in the following locations:

17

Corporate Facilities

We lease approximately 48,000 square feet on two floors of a suburban mid-rise office building located at 780 Johnson Ferry Road, Suite 800, Atlanta, Georgia.

We believe that our facilities are suitable and adequate for present purposes, and that the productive capacity in such facilities is substantially being utilized. For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this report under Item 7 of Part II.

The Company is subject to various claims and legal proceedings covering a wide range of matters, including with respect to product liability and personal injury claims, that arise in the ordinary course of its business activities. We currently have no pending claims or legal proceedings that we believe would be reasonably likely to have a material adverse effect on our financial condition, results of operations or cash flows. However, there can be no assurance that either future litigation or an unfavorable outcome in existing claims will not have a material impact on our business, reputation, financial position, cash flows or results of operations.

The following discussion provides an analysis of the Company’s financial condition and results of operations from management's perspective and should be read in conjunction with the consolidated financial statements and related notes included in this report. The discussion in this Form 10-K generally focuses on the year ended December 31, 2025 compared to the year ended December 31, 2024. A discussion of our results of operations and changes in financial condition for the 2024 year compared to 2023 has been excluded from this report, but can be found in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Form 10-K for the year ended December 31, 2024.

Industry Overview

The retail residential furniture industry is influenced by the overall strength of the economy, new and existing home sales, consumer confidence, spending on large ticket items, interest rates, and the availability of credit. Although inflation and home sales showed modest improvement in 2025, the industry continued to face headwinds from rising consumer debt, constrained housing inventory, tight access to home mortgage credit, and ongoing economic uncertainty driven by changes in tariff policy and geopolitical tensions.

Throughout 2025, the current U.S. presidential administration announced new and modified tariffs on imported goods, including those sourced from China, Vietnam, and other key manufacturing regions. In response, several affected countries implemented retaliatory tariffs, adding economic uncertainty and increased cost pressures across the industry. The evolving tariff landscape has led many home furnishing retailers to adjust sourcing strategies, reassess vendor relationships, and implement pricing actions in an effort to mitigate the impact of these policy changes. On February 20, 2026, certain tariffs were invalidated following a ruling by the U.S. Supreme Court, adding further uncertainty to the trade environment, particularly with respect to the scope and timing of any recovery related to the invalidated tariffs and the impact of new tariffs the administration has announced. We continue to assess the impact of tariff policy changes on our business.

Business Overview

We sell home furnishings in retail stores and online, recording revenue when products are delivered to the customer. Our product assortment is selected to appeal to middle to upper-middle income consumers across a variety of styles. Our commissioned sales team members receive comprehensive product and customer service training to ensure we provide a high-quality in-store experience. We also aim to have at least one designer serving each of our stores. These individuals collaborate with our sales team to provide customers additional confidence and design inspiration throughout the purchasing process. Unlike many of our competitors, we do not outsource the delivery function; instead, our Haverty's delivery team ensures a seamless and professional experience, which includes a detailed inspection of the product prior to delivery, as well as placement and assembly of the furniture in the customer's home. We are recognized in our markets for offering high-quality, fashionable products and delivering exceptional customer service.

Management Objectives

Management remains focused on gaining market share and improving profitability. These objectives can be achieved by concentrating our efforts on improving our customer's experience, highlighted by new products, high-touch service, and upgraded technology. In addition, our growth strategy includes the expansion of our retail operations to increase our footprint within our distribution network. The Company’s strategies for profitability include:

• increasing sales volume,
• maintaining strong gross margins,
• implementing targeted marketing initiatives,
• improving productivity and processes, and
• adopting efficiency and cost-saving measures.

To support our objectives in 2025, we increased our investment in advertising and marketing initiatives and adopted a more aggressive promotional strategy.

Similar to other home furnishing retailers, our business was impacted by the current U.S. presidential administration's tariff policy implemented in 2025. To mitigate the impact of such tariff policy in 2025, we:

• leveraged our strong vendor relationships to minimize price increases,
• implemented targeted price increases on select products,
• reduced our China product sourcing to less than 5% of purchases, and
• re-sourced and re-assorted products, as needed.

Despite the challenges facing the home furnishings industry, we increased net sales by 5.0%, comparable-store sales by 2.1% and maintained a gross profit margin of 60.7%. This performance reflects the disciplined execution of our strategic initiatives and our continued focus on operational efficiency and delivering a high-quality experience for our customers.

Key Performance Indicators

We evaluate our performance based on several key metrics which include:

• store traffic,
• conversion rates,
• average ticket and average designer ticket,
• net sales,
• comparable store sales and written comparable store sales,
• sales per weighted average square foot,
• gross profit margin,
• selling, general and administrative costs as a percentage of sales,
• operating income,
• cash flow, and
• earnings per share.

These measurements are used to support management's economic decision-making, including decisions related to store growth, capital allocation and product pricing.

Net sales are generated by customer purchases of merchandise and related fees, net of expected returns and sales tax. We record our sales when the merchandise is delivered to the customer. Comparable-store or “comp-store” sales is a measure which indicates the performance of our existing stores and website by comparing the sales growth in store and online for a particular month over the corresponding month in the prior year. Stores are considered non-comparable if they were not open during the corresponding month in the prior year or if the selling square footage has been changed by more than 10%. Large clearance sales events from warehouses or temporary locations are also excluded from comparable store sales. The method we use to compute comp-store sales may not be the same method used by other retailers.

We also track written sales and "written comp-store sales", which represent customer orders prior to delivery. Written sales reflect the current pace or trend of customer transactions. As a retailer, comp‑store sales and written comp‑store sales are an indicator of relative customer spending and store performance. Comp-store sales, total written sales and written comp-store sales are intended only as supplemental information and are not a substitute for net sales presented in accordance with US GAAP.

Sales per weighted average (“WAVG”) square foot is calculated by dividing net sales by WAVG square footage. WAVG square footage is a daily WAVG based on the ratio of the days open in a period to the total days in the period and measures the efficiency of a store to generate revenue.

Results of Operations

The table and discussion below should be read in conjunction with our consolidated financial statements and related notes included in this report.

(Dollars in thousands, except per share data)

(1) Includes special dividends of $1.00 for Common Stock and $0.95 for Class A Common Stock paid in the fourth quarter of 2023 and 2022, and $2.00 for Common Stock and $1.90 for Class A Common Stock paid in the fourth quarter of 2021 and 2020.

(2) We have no funded debt.

(3) Average ticket is calculated by dividing total sales by the number of orders.

Net Sales

The following outlines our sales and comp-store sales increases and decreases for the periods indicated. (Amounts and percentages may not always add to totals due to rounding.)

Dollars in millions

Dollars in millions

Net sales in 2025 increased $36.1 million or 5.0% compared to 2024 due to price increases on select merchandise to mitigate the impact of tariffs and higher demand for our products due to the effectiveness of our advertising and marketing initiatives. Sales growth was achieved despite ongoing pressure from a soft housing market, driven by elevated mortgage rates and heightened economic and geopolitical uncertainty, which creates a challenging demand environment for the home furnishings industry.

Our sales team and design consultants continue to provide excellent service to our customers. The average ticket value in 2025 was $3,530, up 4.7% over last year. Design consultant engagement contributed 33.5% of our 2025 total written sales, with an average written ticket of $7,781. (See Note 2, "Revenues" of the Notes to Consolidated Financial Statements).

Gross Profit

Our cost of goods sold consists primarily of the purchase price of the merchandise together with inbound freight, handling within our distribution centers and transportation costs to the local markets we serve. Our gross profit is primarily dependent upon vendor pricing, the mix of products sold and promotional pricing activity. Substantially all of our occupancy and home delivery costs are included in selling, general and administrative expenses as is a portion of our warehousing expenses. Accordingly, our gross profit may not be comparable to those entities that include some of these expenses in cost of goods sold.

Gross profit as a percentage of net sales was 60.7% in 2025 and 2024. Due to changes in tariff policy and higher costs of goods sold under LIFO, the 2025 change in LIFO reserve generated a negative impact of $4.7 million, compared to a positive impact of $0.8 million in 2024. Excluding the impact of LIFO, our gross profit margins increased 70 basis points due to product selection, merchandise pricing and mix.

Selling, General and Administrative Expenses

SG&A expenses are comprised of five categories:

• selling,
• occupancy,
• transportation, delivery and certain warehousing costs,
• advertising and marketing, and
• general and administrative.

Selling expenses are primarily comprised of compensation of sales team members and sales support staff, and fees paid to credit card and third-party finance companies. Occupancy costs include rents, depreciation charges, insurance and property taxes, repairs and maintenance expense and utility costs. Delivery and transportation costs include personnel, fuel costs, depreciation and rental charges.

Warehouse costs include personnel, supplies, depreciation, and rental charges for equipment. Advertising and marketing expenses are primarily TV and digital media expenditures, market research expenses and agency fees. General and administrative expenses are comprised of compensation costs for store personnel exclusive of sales team members, information systems, executive, accounting, merchandising, advertising, supply chain, real estate and human resource departments.

We classify our SG&A expenses as either variable or fixed and discretionary. Our variable expenses include the costs in the selling and delivery categories and certain warehouse expenses as these amounts will generally move in tandem with our level of sales. The remaining categories and expenses are classified as fixed and discretionary because these costs do not fluctuate with sales.

The following table outlines our SG&A expenses by classification:

(In thousands)

Our SG&A costs as a percent of sales for 2025 were 57.9% versus 58.0% in 2024. SG&A dollars increased $20.1 million, or 4.8%, for 2025 compared to 2024. The change was driven by increased sales and less leveraging of fixed costs. Our selling expenses increased $3.0 million, largely due to higher commissioned-based compensation. Our administrative expenses increased $11.3 million from 2024 due to higher salaries, performance-based incentive compensation and stock-based compensation costs. Advertising and marketing expenses increased $3.3 million from 2024 to 2025, due to an increased investment in television and direct mail advertising during the year. Occupancy costs increased $5.0 million, primarily due to increased depreciation expense, rent expense, and state and local taxes from the prior year. Warehouse, delivery, and transportation expenses decreased $2.4 million from 2024 to 2025, primarily due to increased productivity in our warehouse operations and lower payroll related benefits and insurance costs.

Interest (Income) Expense, Net

We earned $1.0 million less interest income, net of interest expense, in 2025 than in 2024 due to lower rates paid on cash, cash equivalents, and restricted cash equivalents.

Provision for Income Taxes

Our effective tax rate was 26.5% in 2025 compared to 23.7% in 2024. See Note 8, “Income Taxes” of the Notes to Consolidated Financial Statements for further information about our income taxes.

Liquidity and Capital Resources

At December 31, 2025, we had $125.3 million in cash and cash equivalents, and $6.5 million in restricted cash equivalents. See Note 1 to our consolidated financial statements for further discussion of our restricted cash equivalents. We believe that our current cash position, cash flow generated from operations, funds available from our credit agreement, and access to the long-term debt capital markets should be sufficient for our operating requirements and to enable us to fund our capital expenditures, dividend payments, and lease obligations through the next several years.

Our material cash requirements include contractual and other obligations arising in the normal course of business. These obligations primarily include operating lease obligations and purchase obligations. In addition to our cash requirements, we follow a disciplined approach to capital allocation. This approach first prioritizes investing in the business, followed by paying dividends. We may also return excess cash to shareholders in the form of share repurchases, cash dividends, or special cash dividends. We expect capital expenditures of approximately $33.5 million in 2026 to support our operations and strategic expansion, however these plans are subject to other potential opportunities, the economic environment, general business conditions and our financial performance.

Long-Term Debt

We currently have a $80.0 million revolving credit facility (the "Credit Agreement") with a bank. As of December 31, 2025, we had no outstanding borrowings and $80.0 million of available borrowings under the Credit Agreement. The Credit Agreement matures October 24, 2027. See Note 6, “Credit Arrangement” of the Notes to Consolidated Financial Statements for information about our Credit Agreement.

Leases

We use operating leases to fund a portion of our real estate, including our stores, distribution centers, and store support space.

At December 31, 2025, we had aggregate lease obligations of $216.4 million, with $36.0 million payable within 12 months. See Note 9, “Leases” of the Notes to Consolidated Financial Statements for further discussion of our operating leases.

Share Repurchases

The board of directors has authorized management, at its discretion, to purchase and retire limited amounts of our Common Stock and Class A Common Stock. We made cash payments of $4.8 million for repurchases of 216,482 shares of our Common Stock through open market purchases during 2025 and there is approximately $3.3 million at December 31, 2025 that may yet be purchased under the existing authorization.

Cash Flows Summary

Operating Activities. Cash flow generated from operations provides us with a significant source of liquidity. Our operating cash flows result primarily from cash received from our customers, offset by cash payments we make for products and services, employee compensation, operations, and occupancy costs.

Cash provided by or used in operating activities is also subject to changes in working capital. Working capital at any specific point in time is subject to many variables, including seasonality, inventory selection, the timing of cash receipts and payments, and vendor payment terms.

Net cash provided by operating activities in 2025 was $52.6 million driven primarily by net income of $19.7 million and non-cash adjustments to net income of $30.5 million consisting primarily of depreciation and amortization, stock-based compensation expense and changes in working capital. The changes in working capital were driven primarily by a $12.7 million increase in inventories and a $5.2 million decrease in customer deposit offset by $12.3 million decrease in other assets and liabilities and a $8.1 million increase in accrued liabilities and vendor repayments.

Net cash provided by operating activities in 2024 was $58.9 million driven primarily by net income of $20.0 million and non-cash adjustments to net income of $27.9 million consisting primarily of depreciation and amortization and stock-based compensation expense and changes in working capital. The changes in working capital were primarily driven by a $10.5 million decrease in inventories, a $7.0 million decrease in other assets and liabilities, and a $4.9 million increase in customer deposits offset by a $11.4 million decrease in accrued liabilities and vendor repayments.

Investing Activities. Cash used in investing activities in 2025 consisted primarily of $19.7 million of capital expenditures. In 2024, cash used in investing activities primarily reflected $32.1 million of capital expenditures.

Financing Activities. Cash used in financing activities in 2025 consisted primarily of $20.8 million of quarterly cash dividends and $4.8 million of share repurchases. Cash used in financing activities in 2024 primarily reflected $20.5 million of quarterly cash dividends and $5.0 million of share repurchases.

Our investing activities in stores and operations in 2025, 2024 and 2023 and planned outlays for 2026 are categorized in the table below. Capital expenditures for stores in the years noted do not necessarily coincide with the years in which the stores open.

(Approximate in thousands)

(1) In 2023 we purchased one distribution facility that was previously leased.

Critical Accounting Estimates and Assumptions

Our discussion and analysis is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, and evaluate our estimates and judgments required by our policies on an ongoing basis and update them as appropriate based on changing conditions.

Accounting estimates are considered critical if both of the following conditions are met: (a) the nature of the estimates or assumptions is material because of the levels of subjectivity and judgment needed to account for matters that are highly uncertain and susceptible to change and (b) the effect of the estimates and assumptions is material to the financial statements.

We have reviewed our accounting estimates, and none were deemed to be considered critical for the accounting periods presented.

Market risk represents the potential loss arising from adverse changes in the value of financial instruments. The risk of loss is assessed based on the likelihood of adverse changes in fair values, cash flows or future earnings.

In the ordinary course of business, we are exposed to various market risks, including fluctuations in interest rates. Our exposure to interest rate risk relates to the interest income generated by cash, cash equivalents, and interest expense on the Credit Facility. The primary objective of our investment policy is to preserve principal while maximizing income without significantly increasing risk. We do not believe that an increase or decrease in interest rates of 100 basis points would have a material effect on our operating results or financial condition. During 2025 and 2024, we had no outstanding borrowings under our Credit Agreement (as discussed in Note 6 to the Consolidated Financial Statements), which bears interest based on variable rates.

(a) Disclosure Controls and Procedures. Our management has evaluated, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective for the purpose of providing reasonable assurance that the information we must disclose in reports that we file or submit under the Securities Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to the Company’s management, including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosures.

(b) Management’s Annual Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on that evaluation, our management concluded that our internal control over financial reporting is effective as of December 31, 2025.

Attestation Report of the Independent Registered Public Accounting Firm. Grant Thornton LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this annual report on Form 10-K and, as part of their audit, has issued their report, included herein, on the effectiveness of our internal control over financial reporting.

(c) Changes in Internal Control over Financial Reporting. During the fourth quarter of 2025, there were no changes in our internal control over financial reporting that have affected, or are reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Haverty Furniture Companies, Inc. (a Maryland Corporation) and subsidiary (the “Company”) as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2025, and our report dated February 26, 2026 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ GRANT THORNTON LLP

Atlanta, Georgia

February 26, 2026