Spotting Winners: Lovesac (NASDAQ:LOVE) And Home Furnishings Stocks In Q1
Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at Lovesac (NASDAQ:LOVE) 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 weak Q1; on average, revenues missed analyst consensus estimates by 1.2%, while next quarter's revenue guidance was 11.4% below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and home furnishings stocks have had a rough stretch, with share prices down 13.1% on average since the previous earnings results.
Lovesac (NASDAQ:LOVE)
Known for its oversized, premium beanbags, Lovesac (NASDAQ:LOVE) is a specialty furniture brand selling modular furniture.
Lovesac reported revenues of $250.5 million, up 5% year on year, falling short of analyst expectations by 5.6%. It was a weak quarter for the company: Revenue and EPS both missed. Guidance wasn't much better. Next quarter's revenue and EPS guidance, as well as the full year outlook for revenue and EPS, missed expectations.
Shawn Nelson, Chief Executive Officer, stated, “Lovesac delivered market leading fiscal fourth quarter and full year 2024 sales performances. We surpassed $700 million in revenues for the fiscal year, representing a net sales increase of $49.1 million, or 7.5%, despite another year of significant category decline for the home furnishing sector. Interest in – and passion for – the Lovesac brand, from new and existing customers alike, continues to grow. We will fortify our momentum by doubling-down on what we do best: strengthening our unique omni-channel infinity flywheel, reinforcing our designed for life platform, investing in genuine innovation, and making the strategic investments necessary to profitably scale our brand and business for years to come.”
Lovesac achieved the fastest revenue growth but had the weakest performance against analyst estimates and weakest performance against analyst estimates of the whole group. The stock is down 12.6% since the results and currently trades at $20.39.
Read our full report on Lovesac here, it's free.
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 $145.9 million, up 1.1% year on year, in line with analyst expectations. It was a solid quarter for the company, with an impressive beat of analysts' operating margin estimates and full-year revenue guidance topping analysts' expectations.
Purple delivered the highest full-year guidance raise among its peers. The stock is down 24.2% since the results and currently trades at $1.55.
Is now the time to buy Purple? Access our full analysis of the earnings results here, it's free.
Weakest Q1: 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 $500.4 million, down 12.6% year on year, falling short of analyst expectations by 4.3%. It was a weak quarter for the company, with a miss of analysts' revenue estimates.
La-Z-Boy had the slowest revenue growth in the group. The stock is down 12.6% since the results and currently trades at $32.98.
Read our full analysis of La-Z-Boy's results here.
Tempur Sealy (NYSE:TPX)
Established through the merger of Tempur-Pedic and Sealy in 2012, Tempur Sealy (NYSE:TPX) is a bedding manufacturer known for its innovative memory foam mattresses and sleep products
Tempur Sealy reported revenues of $1.17 billion, down 1.4% year on year, falling short of analyst expectations by 0.4%. It was a weak quarter for the company, with a miss of analysts' revenue and earnings estimates.
The stock is down 3.4% since the results and currently trades at $49.54.
Read our full, actionable report on Tempur Sealy here, it's free.
Leggett & Platt (NYSE:LEG)
Founded in 1883, Leggett & Platt (NYSE:LEG) is a diversified manufacturer making products for various industries.
Leggett & Platt reported revenues of $1.12 billion, down 6.7% year on year, in line with analyst expectations. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations due to ongoing weakness in its Bedding Products and FF&T segments. Management also projects sales volumes to decline in the low to mid-single digits.
The stock is down 24.3% since the results and currently trades at $17.62.
Read our full, actionable report on Leggett & Platt here, it's free.
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