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 Somnigroup (NYSE: SGI) 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 satisfactory Q1. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
Thankfully, share prices of the companies have been resilient as they are up 9.9% on average since the latest earnings results.
Weakest Q1: Somnigroup (NYSE: SGI)
Established through the merger of Tempur-Pedic and Sealy in 2012, Somnigroup (NYSE: SGI) is a bedding manufacturer known for its innovative memory foam mattresses and sleep products
Somnigroup reported revenues of $1.60 billion, up 34.9% year on year. This print fell short of analysts’ expectations by 1.8%. Overall, it was a slower quarter for the company with full-year EPS guidance missing analysts’ expectations.
Company Chairman and CEO Scott Thompson commented, "Our results this quarter both reflect the transformational acquisition of Mattress Firm and highlight our ability to navigate a weak global market. All of our business units, domestically and internationally, successfully made progress on their growth opportunities as we leverage the core strengths of our business, including scale, operational flexibility and manufacturing capabilities. I continue to be impressed by our people, all around the world, as they focus on execution and taking care of our customers to deliver share gains and efficient cost management across the Somnigroup enterprise. Everyone in the organization has stepped up to quickly advance our near and longer term initiatives to continue delivering value to shareholders."
Somnigroup pulled off the fastest revenue growth but had the weakest performance against analyst estimates of the whole group. The stock is up 21.7% since reporting and currently trades at $73.77.
Read our full report on Somnigroup here, it’s free.
Best Q1: 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 $104.2 million, down 13.2% year on year, in line with analysts’ expectations. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates.
Purple pulled off the highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.8% since reporting. It currently trades at $0.73.
Is now the time to buy Purple? Access our full analysis of the earnings results here, it’s free.
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 $2.53 billion, down 5.7% year on year, falling short of analysts’ expectations by 0.9%. It was a slower quarter as it posted EPS guidance for next quarter missing analysts’ expectations and a slight miss of analysts’ organic revenue estimates.
Interestingly, the stock is up 5.4% since the results and currently trades at $112.32.
Read our full analysis of Mohawk Industries’s results here.
Lovesac (NASDAQ: LOVE)
Known for its oversized, premium beanbags, Lovesac (NASDAQ: LOVE) is a specialty furniture brand selling modular furniture.
Lovesac reported revenues of $138.4 million, up 4.3% year on year. This number beat analysts’ expectations by 0.7%. Overall, it was a very strong quarter as it also put up EBITDA guidance for next quarter exceeding analysts’ expectations.
The stock is down 6.8% since reporting and currently trades at $19.15.
Read our full, actionable report on Lovesac here, it’s free.
Leggett & Platt (NYSE: LEG)
Founded in 1883, Leggett & Platt (NYSE: LEG) is a diversified manufacturer of products and components for various industries.
Leggett & Platt reported revenues of $1.02 billion, down 6.8% year on year. This print met analysts’ expectations. Aside from that, it was a satisfactory quarter as it also logged a solid beat of analysts’ adjusted operating income estimates but a miss of analysts’ FF&T revenue estimates.
Leggett & Platt had the weakest full-year guidance update among its peers. The stock is up 38.8% since reporting and currently trades at $10.08.
Read our full, actionable report on Leggett & Platt here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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