As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the home furniture retailer industry, including Sleep Number (NASDAQ: SNBR) 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 mixed Q4. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.7% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 31.5% since the latest earnings results.
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 $376.8 million, down 12.3% year on year. This print fell short of analysts’ expectations by 3.3%. Overall, it was a slower quarter for the company with a significant miss of analysts’ EBITDA estimates.
Sleep Number delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Unsurprisingly, the stock is down 51.9% since reporting and currently trades at $6.21.
Read our full report on Sleep Number here, it’s free.
Best Q4: 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 $2.46 billion, up 8% year on year, outperforming analysts’ expectations by 4.5%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates and a decent beat of analysts’ EPS estimates.
Williams-Sonoma pulled off the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 12.9% since reporting. It currently trades at $150.01.
Is now the time to buy Williams-Sonoma? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: 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 $812.4 million, up 10% year on year, falling short of analysts’ expectations by 2.6%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 26.6% since the results and currently trades at $183.71.
Read our full analysis of RH’s results here.
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 $347 million, flat year on year. This print met analysts’ expectations. Aside from that, it was a mixed quarter as it also produced an impressive beat of analysts’ gross margin estimates but full-year EBITDA guidance missing analysts’ expectations significantly.
The stock is down 34.5% since reporting and currently trades at $7.81.
Read our full, actionable report on Arhaus here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
