Wrapping up Q1 earnings, we look at the numbers and key takeaways for the home furniture retailer stocks, including RH (NYSE: RH) and its peers.
Furniture retailers understand that ‘home is where the heart is’ but that no home is complete without that comfy sofa to kick back on or a dreamy bed to rest in. These stores focus on providing not only what is practically needed in a house but also aesthetics, style, and charm in the form of tables, lamps, and mirrors. Decades ago, it was thought that furniture would resist e-commerce because of the logistical challenges of shipping large furniture, but now you can buy a mattress online and get it in a box a few days later; so just like other retailers, furniture stores need to adapt to new realities and consumer behaviors.
The 4 home furniture retailer stocks we track reported a slower Q1. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
Luckily, home furniture retailer stocks have performed well with share prices up 10.6% on average since the latest earnings results.
RH (NYSE: RH)
Formerly known as Restoration Hardware, RH (NYSE: RH) is a specialty retailer that exclusively sells its own brand of high-end furniture and home decor.
RH reported revenues of $814 million, up 12% year on year. This print fell short of analysts’ expectations by 0.6%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ EPS estimates but a significant miss of analysts’ EBITDA estimates.
RH achieved the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 20.9% since reporting and currently trades at $214.
Read our full report on RH here, it’s free.
Best Q1: Williams-Sonoma (NYSE: WSM)
Started in 1956 as a store specializing in French cookware, Williams-Sonoma (NYSE: WSM) is a specialty retailer of higher-end kitchenware, home goods, and furniture.
Williams-Sonoma reported revenues of $1.73 billion, up 4.2% year on year, outperforming analysts’ expectations by 4%. The business had a strong quarter with a decent beat of analysts’ EBITDA estimates.
Williams-Sonoma delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 6.7% since reporting. It currently trades at $179.
Is now the time to buy Williams-Sonoma? Access our full analysis of the earnings results here, it’s free.
Slowest Q1: Sleep Number (NASDAQ: SNBR)
Known for mattresses that can be adjusted with regards to firmness, Sleep Number (NASDAQ: SNBR) manufactures and sells its own brand of bedding products such as mattresses, bed frames, and pillows.
Sleep Number reported revenues of $393.3 million, down 16.4% year on year, falling short of analysts’ expectations by 1.2%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.
Sleep Number delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 1% since the results and currently trades at $7.87.
Read our full analysis of Sleep Number’s results here.
Arhaus (NASDAQ: ARHS)
With an aesthetic that features natural materials such as reclaimed wood, Arhaus (NASDAQ: ARHS) is a high-end furniture retailer that sells everything from sofas to rugs to bookcases.
Arhaus reported revenues of $311.4 million, up 5.5% year on year. This result came in 0.8% below analysts' expectations. Overall, it was a softer quarter as it also logged full-year EBITDA guidance missing analysts’ expectations significantly and a significant miss of analysts’ EBITDA estimates.
The stock is up 13.6% since reporting and currently trades at $9.51.
Read our full, actionable report on Arhaus here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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