Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Lovesac (NASDAQ:LOVE) and the best and worst performers in the home furnishings industry.
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 slower Q2. As a group, revenues missed analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was 3.7% below.
The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Thankfully, home furnishings stocks have been resilient with share prices up 8.6% on average since the latest earnings results.
Lovesac (NASDAQ:LOVE)
Known for its oversized, premium beanbags, Lovesac (NASDAQ:LOVE) is a specialty furniture brand selling modular furniture.Lovesac reported revenues of $156.6 million, up 1.3% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with underwhelming earnings guidance for the full year and full-year revenue guidance missing analysts’ expectations.
Shawn Nelson, Chief Executive Officer, stated, “Our second quarter results were inline with our expectations as we continued to drive market share gains amidst a challenging industry backdrop. We are pleased with the incredible reception we have seen with the product innovation we have delivered recently through our PillowSac Accent Chair as well as our newly launched AnyTable.”
Lovesac pulled off the highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 32.7% since reporting and currently trades at $27.91.
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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, the business still had a strong quarter 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 18.4% since reporting. It currently trades at $159.49.
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, falling short of analysts’ expectations by 6.3%. It was a softer quarter as it posted full-year revenue guidance missing analysts’ expectations.
Purple delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 18.8% since the results and currently trades at $0.95.
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 productsTempur Sealy reported revenues of $1.23 billion, down 2.8% year on year. This number lagged analysts' expectations by 3.5%. Overall, it was a softer quarter as it also recorded a miss of analysts’ Direct revenue estimates and underwhelming earnings guidance for the full year.
The stock is up 12.3% since reporting and currently trades at $54.61.
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. This result was in line with analysts’ expectations. More broadly, it was a slower quarter as it recorded underwhelming earnings guidance for the full year and a miss of analysts’ operating margin estimates.
Leggett & Platt had the slowest revenue growth among its peers. The stock is up 6.5% since reporting and currently trades at $13.69.
This content was originally published on Stock Story
