As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the home furnishings industry, including Purple (NASDAQ:PRPL) and its peers.
A healthy housing market is good for furniture demand as more consumers are buying, renting, moving, and renovating. On the other hand, periods of economic weakness or high interest rates discourage home sales and can squelch demand. In addition, home furnishing companies must contend with shifting consumer preferences such as the growing propensity to buy goods online, including big things like mattresses and sofas that were once thought to be immune from e-commerce competition.
The 5 home furnishings stocks we track reported a weaker Q2. As a group, revenues missed analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was 2.5% below.
Stocks--especially those trading at higher multiples--had a strong end of 2023, but this year has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts. However, home furnishings stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.
Weakest Q2: Purple (NASDAQ:PRPL) Founded by two brothers, Purple (NASDAQ:PRPL) creates sleep and home comfort products such as mattresses, pillows, and bedding accessories.
Purple reported revenues of $120.3 million, up 2% year on year. This print fell short of analysts’ expectations by 6.3%. Overall, it was a weak quarter for the company with full-year revenue guidance missing analysts’ expectations.
"Our second quarter results underscore the progress we've made enhancing the financial profile of the Company," said Chief Executive Officer Rob DeMartini.
Purple delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 6.8% since reporting and currently trades at $1.09.
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Best Q2: Mohawk Industries (NYSE:MHK) Established in 1878, Mohawk Industries (NYSE:MHK) is a leading producer of floor-covering products for both residential and commercial applications.
Mohawk Industries reported revenues of $2.80 billion, down 5.1% year on year, falling short of analysts’ expectations by 1.2%. However, it was still a solid quarter for the company with optimistic earnings guidance for the next quarter and a decent beat of analysts’ operating margin estimates.
The market seems happy with the results as the stock is up 10.4% since reporting. It currently trades at $148.73.
Tempur Sealy (NYSE:TPX) Established through the merger of Tempur-Pedic and Sealy in 2012, Tempur Sealy (NYSE:TPX) is a bedding manufacturer known for its innovative memory foam mattresses and sleep products
Tempur Sealy reported revenues of $1.23 billion, down 2.8% year on year, falling short of analysts’ expectations by 3.5%. It was a weak quarter for the company with underwhelming earnings guidance for the full year.
Interestingly, the stock is up 3.1% since the results and currently trades at $50.14.
La-Z-Boy (NYSE:NYSE:LZB) The prized possession of every mancave, La-Z-Boy (NYSE:LZB) is a furniture company specializing in recliners, sofas, and seats.
La-Z-Boy reported revenues of $495.5 million, up 2.9% year on year, surpassing analysts’ expectations by 2.8%. Revenue aside, it was a mixed quarter for the company with a narrow beat of analysts’ operating margin estimates but a miss of analysts’ Wholesale revenue estimates.
La-Z-Boy pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 4% since reporting and currently trades at $40.19.
Leggett & Platt (NYSE:LEG) Founded in 1883, Leggett & Platt (NYSE:LEG) is a diversified manufacturer making products for various industries.
Leggett & Platt reported revenues of $1.13 billion, down 7.6% year on year, in line with analysts’ expectations. Overall, it was a weak quarter for the company with underwhelming earnings guidance for the full year.
Leggett & Platt scored the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is down 6.8% since reporting and currently trades at $11.99.
This content was originally published on Stock Story
