As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the home furnishing and improvement retail industry, including Home Depot (NYSE:HD) and its peers.
Home furnishing and improvement retailers understand that ‘home is where the heart is’ but that a home is only right when it’s in livable condition and furnished just right. These stores therefore focus on providing what is needed for both the upkeep of a house as well as what is desired for the aesthetics of a home. Decades ago, it was thought that furniture and home improvement would resist e-commerce because of the logistical challenges of shipping a sofa or lawn mower, but now you can buy both online; so just like other retailers, these stores need to adapt to new realities and consumer behaviors.
The 7 home furnishing and improvement retail stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 0.9% while next quarter’s revenue guidance was 7.2% below.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation. Luckily, home furnishing and improvement retail stocks have performed well with share prices up 14.4% on average since the latest earnings results.
Home Depot (NYSE:HD) Founded and headquartered in Atlanta, Georgia, Home Depot (NYSE:HD) is a home improvement retailer that sells everything from tools to building materials to appliances.
Home Depot reported revenues of $43.18 billion, flat year on year. This print exceeded analysts’ expectations by 1.1%. Overall, it was a satisfactory quarter for the company with a narrow beat of analysts’ earnings estimates but a miss of analysts’ gross margin estimates.
"The underlying long-term fundamentals supporting home improvement demand are strong," said Ted Decker, chair, president and CEO.
Home Depot achieved the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 10.4% since reporting and currently trades at $382.06.
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Best Q2: 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 $408.4 million, down 11% year on year, falling short of analysts’ expectations by 1.9%. However, the business still had a strong quarter with an impressive beat of analysts’ earnings estimates and a solid beat of analysts’ gross margin estimates.
The market seems happy with the results as the stock is up 42.4% since reporting. It currently trades at $16.85.
Weakest Q2: 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 $309.8 million, flat year on year, falling short of analysts’ expectations by 1.4%. It was a softer quarter as it posted revenue guidance for next quarter which fell below analysts’ expectations.
Arhaus delivered the weakest full-year guidance update in the group. As expected, the stock is down 10.8% since the results and currently trades at $12.35.
Floor And Decor (NYSE:FND) Operating large, warehouse-style stores, Floor & Decor (NYSE:FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.
Floor And Decor reported revenues of $1.13 billion, flat year on year. This number came in 1.7% below analysts' expectations. It was a slower quarter as it also recorded underwhelming earnings guidance for the full year. Similarly, full-year revenue guidance missed analysts’ expectations.
The stock is up 24% since reporting and currently trades at $116.63.
RH (NYSE:RH) Formerly known as Restoration Hardware, NYSE:RH (NYSE:RH) is a specialty retailer that exclusively sells its own brand of of high-end furniture and home decor.
RH reported revenues of $829.7 million, up 3.6% year on year. This number met analysts’ expectations. It was a strong quarter as it also recorded a decent beat of analysts’ gross margin and earnings estimates.
RH delivered the fastest revenue growth among its peers. The stock is up 28.5% since reporting and currently trades at $329.74.
This content was originally published on Stock Story
