Looking back on home furnishings stocks' Q1 earnings, we examine this quarter's best and worst performers, including La-Z-Boy (NYSE:LZB) 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 6 home furnishings stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 1.2%. while next quarter's revenue guidance was in line with consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and while some of the home furnishings stocks have fared somewhat better than others, they collectively declined, with share prices falling 2.9% on average since the previous earnings results.
Best Q1: La-Z-Boy (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 $553.5 million, down 1.4% year on year, exceeding analysts' expectations by 7.2%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts' earnings estimates and a narrow beat of analysts' Wholesale revenue estimates.
Melinda D. Whittington, President and Chief Executive Officer of La-Z-Boy Incorporated, said, “We are pleased with our strong finish to the fiscal year as fourth quarter results exceeded expectations. Wholesale unit volumes improved in the quarter and recovery from weather and related disruptions in January also provided a tailwind."
La-Z-Boy pulled off the biggest analyst estimates beat of the whole group. The stock is up 18.2% since reporting and currently trades at $40.28.
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Lovesac (NASDAQ:LOVE) Known for its oversized, premium beanbags, Lovesac (NASDAQ:LOVE) is a specialty furniture brand selling modular furniture.
Lovesac reported revenues of $132.6 million, down 6.1% year on year, outperforming analysts' expectations by 3.6%. It was an impressive quarter for the company with optimistic earnings guidance for the next quarter and full-year revenue guidance exceeding analysts' expectations.
Lovesac achieved the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 8.9% since reporting. It currently trades at $28.29.
Weakest Q1: 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 million, up 12.5% year on year, falling short of analysts' expectations by 1.7%. It was a weak quarter for the company with a miss of analysts' earnings and revenue estimates.
As expected, the stock is down 27.8% since the results and currently trades at $1.22.
Mohawk Industries (NYSE: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 $2.68 billion, down 4.5% year on year, surpassing analysts' expectations by 1.4%. Overall, it was a strong quarter for the company with a solid beat of analysts' organic revenue estimates and a decent beat of analysts' earnings estimates.
The stock is up 16% since reporting and currently trades at $127.83.
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 $1.19 billion, down 1.5% year on year, falling short of analysts' expectations by 1.3%. Zooming out, it was a mixed quarter for the company with a narrow beat of analysts' earnings estimates but a miss of analysts' Direct revenue estimates.
The stock is flat since reporting and currently trades at $50.30.
This content was originally published on Stock Story
