The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Arhaus (NASDAQ:ARHS) and the rest of the home furniture retailer stocks fared in Q1.
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 an ok Q1; on average, revenues beat analyst consensus estimates by 2.9%. while next quarter's revenue guidance was 4.7% below 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 furniture retailer stocks have fared somewhat better than others, they collectively declined, with share prices falling 2.1% on average since the previous earnings results.
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 $295.2 million, down 3.1% year on year, exceeding analysts' expectations by 11.7%. Overall, it was a strong quarter for the company with an impressive beat of analysts' earnings estimates and a solid beat of analysts' gross margin estimates.
Arhaus pulled off the biggest analyst estimates beat of the whole group. The stock is up 14.9% since reporting and currently trades at $15.15.
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Best Q1: 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 $1.66 billion, down 5.4% year on year, in line with analysts' expectations. It was a very strong quarter for the company with an impressive beat of analysts' gross margin and earnings estimates.
Although it had a great quarter compared its peers, the market seems unhappy with the results as the stock is down 7.5% since reporting. It currently trades at $145.40.
Weakest Q1: 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 $727 million, down 1.7% year on year, in line with analysts' expectations. It was a weak quarter for the company with a miss of analysts' earnings estimates.
As expected, the stock is down 11.4% since the results and currently trades at $245.17.
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 $470.4 million, down 10.7% year on year, in line with analysts' expectations. Taking a step back, it was a weak quarter for the company with a miss of analysts' earnings estimates.
Sleep Number had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 35.2% since reporting and currently trades at $8.80.
This content was originally published on Stock Story
