HVT Haverty Furniture Companies Inc

Risks

• Changes in economic conditions could adversely affect demand for our products.
• We face significant competition from national, regional and local retailers of home furnishings.
• If we fail to anticipate changes in consumer preferences, our sales may decline.
• We import a substantial portion of our merchandise from foreign sources. This exposes us to certain risks that include political and economic conditions. Recently, political discourse in the United States has increasingly focused on ways to discourage U.S. corporations from outsourcing manufacturing and production activities to foreign jurisdictions and curb what are considered to be unfair trade practices. To address these concerns, tariffs were imposed on goods manufactured in China in an attempt to discourage these practices. The tariffs began in September 2018 at 10% of product costs and were scheduled to increase to 25% on March 4, 2019. The increase to 25% has been postponed as part of ongoing discussions between the governments of the United States and China. If ultimately enacted, a 25% tariff could negatively impact our ability to source products from foreign jurisdictions and could adversely affect our results of operations or profitability.
• We are dependent upon the ability of our third-party producers, many of whom are located in foreign countries, to meet our requirements; any failures by these producers to meet our requirements, or the unavailability of suitable producers at reasonable prices or limitations on our ability to source from certain third-party producers may negatively impact our ability to deliver quality products to our customers on a timely basis or result in higher costs or reduced net sales.
• Our vendors might fail in meeting our quality control standards or reacting to changes to the legislative or regulatory framework regarding product safety.
• Our revenue could be adversely affected by risks in our supply chain.
• The rise of oil and gasoline prices could affect our profitability.
• Because of our limited number of distribution centers, should one become damaged, our operating results could suffer.
• Our information technology infrastructure is vulnerable to damage that could harm our business.