As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the home furniture retailer industry, including RH (NYSE:RH) and its peers.
Furniture retailers understand that ‘home is where the heart is’ but that no home is complete without that comfy sofa to kick back on or a dreamy bed to rest in. These stores focus on providing not only what is practically needed in a house but also aesthetics, style, and charm in the form of tables, lamps, and mirrors. Decades ago, it was thought that furniture would resist e-commerce because of the logistical challenges of shipping large furniture, but now you can buy a mattress online and get it in a box a few days later; so just like other retailers, furniture stores need to adapt to new realities and consumer behaviors.
The 4 home furniture retailer stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 8.9% below.
Luckily, home furniture retailer stocks have performed well with share prices up 34.1% on average since the latest earnings results.
RH (NYSE:RH)
Formerly known as Restoration Hardware, 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 $811.7 million, up 8.1% year on year. This print was in line with analysts’ expectations, but overall, it was a softer quarter for the company with a significant miss of analysts’ EBITDA and gross margin estimates.
RH achieved the fastest revenue growth of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $382.33.
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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.
Williams-Sonoma achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 57.1% since reporting. It currently trades at $215.58.
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.
Interestingly, the stock is up 37.7% since the results and currently trades at $12.56.
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 came in 4.3% below analysts' expectations. Overall, it was a slower quarter as it also recorded full-year EBITDA guidance missing analysts’ expectations significantly.
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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