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 Lowe's (NYSE:LOW) and the best and worst performers in the home furnishing and improvement retail industry.
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 slower Q3. As a group, revenues missed analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was 8.9% below.
Luckily, home furnishing and improvement retail stocks have performed well with share prices up 18.2% on average since the latest earnings results.
Lowe's (NYSE:LOW)
Founded in North Carolina as Lowe's North Wilkesboro Hardware, the company is a home improvement retailer that sells everything from paint to tools to building materials.Lowe's reported revenues of $20.17 billion, down 1.5% year on year. This print exceeded analysts’ expectations by 1.4%. Despite the top-line beat, it was still a mixed quarter for the company with a decent beat of analysts’ EPS estimates but a slight miss of analysts’ EBITDA estimates.
"Our results this quarter were modestly better-than-expected, even excluding storm-related activity, driven by high-single-digit positive comps in Pro, strong online sales and smaller-ticket outdoor DIY projects," said Marvin R. Ellison, Lowe's chairman, president and CEO.
Lowe's scored the highest full-year guidance raise of the whole group. Still, the market seems discontent with the results. The stock is down 57.1% since reporting and currently trades at $252.30.
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Best Q3: 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 $1.80 billion, down 2.9% year on year, outperforming analysts’ expectations by 1.1%. The business had a strong quarter with a decent beat of analysts’ gross margin and EPS estimates.
The market seems happy with the results as the stock is up 57.1% since reporting. It currently trades at $215.59.
Slowest Q3: 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 $319.1 million, down 2.2% year on year, falling short of analysts’ expectations by 3.1%. It was a disappointing quarter as it posted full-year EBITDA guidance missing analysts’ expectations.
Arhaus delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 37.7% since the results and currently trades at $12.56.
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 $811.7 million, up 8.1% year on year. This print met analysts’ expectations. Aside from that, it was a softer quarter as it logged a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ gross margin estimates.
RH delivered the fastest revenue growth among its peers. The stock is flat since reporting and currently trades at $381.01.
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 $426.6 million, down 9.7% year on year. This result lagged analysts' expectations by 4.3%. Overall, it was a slower quarter as it also produced full-year EBITDA guidance missing analysts’ expectations.
Sleep Number had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 41.2% since reporting and currently trades at $18.70.
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This content was originally published on Stock Story
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