The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how home furnishings stocks fared in Q2, starting with La-Z-Boy (NYSE: LZB).
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 Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 1% above.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.2% since the latest earnings results.
Weakest Q2: 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 $492.2 million, flat year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ EPS and adjusted operating income estimates.
Melinda D. Whittington, Board Chair, President and Chief Executive Officer of La-Z-Boy Incorporated, said, “We were pleased to deliver sales and margin growth in our Wholesale segment for the quarter, primarily driven by our core North America La-Z-Boy wholesale business. In addition, our Retail segment grew delivered sales and written sales for the quarter. On top of this, during the quarter we announced the acquisition of a 15-store network in the Southeast region, further highlighting the multiple levers we have to grow our business. Investments in our Century Vision strategy to grow our Retail store footprint and expand brand reach, combined with soft industry demand, had a downward impact on our margin performance this quarter, and we are actively taking steps to adjust our near-term operations and prudently navigate the current environment. Our iconic brand, vertically integrated business model, and robust balance sheet are foundational to our continued strategic growth and position us to disproportionately benefit when industry tailwinds reemerge.
Unsurprisingly, the stock is down 17.7% since reporting and currently trades at $32.20.
Read our full report on La-Z-Boy here, it’s free for active Edge members.
Best Q2: 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 $105.1 million, down 12.6% year on year, in line with analysts’ expectations. The business had an exceptional quarter with a solid beat of analysts’ adjusted operating income estimates and full-year EBITDA guidance exceeding analysts’ expectations.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.4% since reporting. It currently trades at $0.84.
Is now the time to buy Purple? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 $1.06 billion, down 6.3% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a decent beat of analysts’ adjusted operating income estimates.
As expected, the stock is down 6.9% since the results and currently trades at $8.87.
Read our full analysis of Leggett & Platt’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 $160.5 million, up 2.5% year on year. This number was in line with analysts’ expectations. It was a strong quarter as it also recorded a beat of analysts’ EPS and EBITDA estimates.
Lovesac delivered the highest full-year guidance raise among its peers. The stock is down 29.4% since reporting and currently trades at $14.67.
Read our full, actionable report on Lovesac here, it’s free for active Edge members.
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 $2.80 billion, flat year on year. This print surpassed analysts’ expectations by 2.2%. More broadly, it was a satisfactory quarter as it also logged an impressive beat of analysts’ organic revenue estimates but EPS guidance for next quarter missing analysts’ expectations.
Mohawk Industries scored the biggest analyst estimates beat among its peers. The stock is up 9.8% since reporting and currently trades at $127.36.
Read our full, actionable report on Mohawk Industries here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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