Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Purple (NASDAQ: PRPL) and its peers.
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 were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.8% above.
Thankfully, share prices of the companies have been resilient as they are up 6.2% on average since the latest earnings results.
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. This print was in line with analysts’ expectations, and overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates.
"Our first quarter performance reflects continued progress against our strategic priorities to stabilize and strengthen the business, and position Purple for long-term success," said Rob DeMartini, CEO of Purple Innovation.
Purple scored the highest full-year guidance raise but had the slowest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 12.7% since reporting and currently trades at $0.66.
Is now the time to buy Purple? Access our full analysis of the earnings results here, it’s free.
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, outperforming analysts’ expectations by 0.7%. The business had a very strong quarter with EBITDA guidance for next quarter exceeding analysts’ expectations.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.8% since reporting. It currently trades at $18.75.
Is now the time to buy Lovesac? Access our full analysis of the earnings results here, it’s free.
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, falling short of analysts’ expectations by 1.8%. It was a slower quarter as it posted full-year EPS guidance missing analysts’ expectations significantly and a miss of analysts’ Direct revenue estimates.
Somnigroup delivered the fastest revenue growth but had the weakest performance against analyst estimates in the group. Interestingly, the stock is up 19.8% since the results and currently trades at $72.65.
Read our full analysis of Somnigroup’s results here.
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. This result missed analysts’ expectations by 0.9%. Overall, it was a slower quarter as it also produced EPS guidance for next quarter missing analysts’ expectations and a slight miss of analysts’ organic revenue estimates.
The stock is up 4.4% since reporting and currently trades at $111.25.
Read our full, actionable report on Mohawk Industries here, it’s free.
La-Z-Boy (NYSE: LZB)
The prized possession of every mancave, La-Z-Boy (NYSE: LZB) is a furniture company specializing in recliners, sofas, and seats.
La-Z-Boy reported revenues of $570.9 million, up 3.1% year on year. This number beat analysts’ expectations by 2.2%. Aside from that, it was a satisfactory quarter as it also logged a decent beat of analysts’ adjusted operating income estimates but a slight miss of analysts’ EPS estimates.
La-Z-Boy pulled off the biggest analyst estimates beat among its peers. The stock is down 1.6% since reporting and currently trades at $38.17.
Read our full, actionable report on La-Z-Boy 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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