Haverty Furniture Companies, Inc. (NYSE:HVT) Q4 2023 Earnings Call Transcript

About half of that is occupancy cost. So you got a couple of million dollars of the new stores that we’re opening that will have in 2024 that we didn’t have in 2023. And then you’ve got about a $2 million or $3 million in 2023, we had about a $3 million credit through a lease modification that we don’t have reoccurring in 2024. So you’ve got about in all about $5 million worth of increased occupancy expense between those two things. And maybe just use about 2% inflation rate on $285 million, that will get you the rest of the spread. So it’s just basically occupancy cost, in general, 2% cost inflation kind of gets you the rest of the non-variable G&A increase.

Cristina Fernandez: And then the last question I had, on the store openings, I guess, how should we think about the contribution of your new stores? You’re opening more stores this year if your average store did about $7 million in sales in 2023. How is normally the ramp-up of a new store to get to that level? Like how usually what’s year on? How does it ramp up to maturity?

Richard Hare: Yes, great question. So yes, if you look at the average — the number of stores we have in our revenue, you’re going to get $6 million to $7 million per location. And it usually takes us about a year to break — within the end of year 1, we’re usually breaking even. And then by the end of year three, we’re fully ramped up, throttled, so full to go. So I don’t know, Steve, do you have any more operational color there. But just from a financial standpoint, that’s kind of the way we model things.

Operator: Ladies and gentlemen, there are no further questions at this time. I’d like to turn the call back to management for closing remarks.

Clarence Smith: Thank you for your participation in today’s call, and we look forward to talking with you in the future when we release our first quarter results later this year. Thank you.

Operator: This concludes today’s conference. You may now disconnect your lines. Enjoy the rest of your day.