Q1 Earnings Review: Home Furniture Retailer Stocks Led by Williams-Sonoma (NYSE:WSM)
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 furniture retailer stocks fared in Q1, starting with Williams-Sonoma (NYSE:WSM).
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 an ok Q1; on average, revenues beat analyst consensus estimates by 2.9%. while next quarter's revenue guidance was 4.7% below consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the home furniture retailer stocks have fared somewhat better than others, they collectively declined, with share prices falling 3.8% on average since the previous earnings results.
Best Q1: 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 $1.66 billion, down 5.4% year on year, in line with analysts' expectations. Overall, it was a very strong quarter for the company with an impressive beat of analysts' earnings estimates.
“We are pleased to deliver strong results in the first quarter of 2024, driven by an improving top-line trend and continued strength in our profitability. We remain committed to executing on our three key priorities in 2024 – returning to growth, elevating our world-class customer service, and driving margin,” said Laura Alber, President and Chief Executive Officer.
The stock is down 6.8% since reporting and currently trades at $146.51.
Is now the time to buy Williams-Sonoma? Access our full analysis of the earnings results here, it's free.
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 $295.2 million, down 3.1% year on year, outperforming analysts' expectations by 11.7%. It was a strong quarter for the company with an impressive beat of analysts' earnings estimates and a solid beat of analysts' gross margin estimates.
Arhaus pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 19.4% since reporting. It currently trades at $15.75.
Is now the time to buy Arhaus? Access our full analysis of the earnings results here, it's free.
Weakest Q1: RH (NYSE:RH)
Formerly known as Restoration Hardware, RH (NYSE:RH) is a specialty retailer that exclusively sells its own brand of of high-end furniture and home decor.
RH reported revenues of $727 million, down 1.7% year on year, in line with analysts' expectations. It was a weak quarter for the company with a miss of analysts' earnings estimates.
As expected, the stock is down 1.5% since the results and currently trades at $272.83.
Read our full analysis of RH's results here.
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 $470.4 million, down 10.7% year on year, in line with analysts' expectations. More broadly, it was a weak quarter for the company with a miss of analysts' earnings estimates.
Sleep Number had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 26.3% since reporting and currently trades at $10.01.
Read our full, actionable report on Sleep Number here, it's free.
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