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 Q3.

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 0.7% while next quarter’s revenue guidance was in line.

Luckily, home furniture retailer stocks have performed well with share prices up 21.8% on average since the latest 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 $344.6 million, up 8% year on year. This print exceeded analysts’ expectations by 2%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EBITDA estimates but EBITDA guidance for next quarter missing analysts’ expectations significantly.

Arhaus scored the biggest analyst estimates beat but had the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is up 17.4% since reporting and currently trades at $11.46.

Is now the time to buy Arhaus? Access our full analysis of the earnings results here, it’s free for active Edge members.

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 $1.88 billion, up 4.6% year on year, outperforming analysts’ expectations by 0.6%. The business had a strong quarter with an impressive beat of analysts’ gross margin estimates and a decent beat of analysts’ EBITDA estimates.

However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $181.25.

Is now the time to buy Williams-Sonoma? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: 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 $342.9 million, down 19.6% year on year, falling short of analysts’ expectations by 5.4%. It was a disappointing quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly and a significant miss of analysts’ revenue estimates.

Sleep Number delivered the highest full-year guidance raise but had the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 50.3% since the results and currently trades at $8.27.

Read our full analysis of Sleep Number’s results here.

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 $883.8 million, up 8.9% year on year. This print met analysts’ expectations. Zooming out, it was a softer quarter as it logged a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.

RH delivered the fastest revenue growth among its peers. The stock is up 19.1% since reporting and currently trades at $181.98.

Read our full, actionable report on RH here, it’s free for active Edge members.

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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