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Home Furniture Retailer Stocks Q1 Teardown: Sleep Number (NASDAQ:SNBR) Vs The Rest


Jabin Bastian /
2024/07/02 3:53 am EDT

Let's dig into the relative performance of Sleep Number (NASDAQ:SNBR) and its peers as we unravel the now-completed Q1 home furniture retailer earnings season.

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 home furniture retailer stocks have had a rough stretch, with share prices down 10.3% on average since the previous earnings results.

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, falling short of analysts' expectations by 0.8%. It was a weak quarter for the company, with a miss of analysts' earnings estimates.

“Our actions to increase operating model efficiencies drove first quarter adjusted EBITDA and gross margin rate ahead of our expectations. We also generated a significant year-over-year increase in free cash flow, as planned, and continue to prioritize paying down debt and reducing leverage,” said Shelly Ibach, Chair, President and CEO.

Sleep Number Total Revenue

Sleep Number delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is down 35.3% since the results and currently trades at $8.78.

Read our full report on Sleep Number here, it's free.

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. It was a very strong quarter for the company, with an impressive beat of analysts' earnings estimates.

Williams-Sonoma Total Revenue

The stock is down 11.9% since the results and currently trades at $276.86.

Is now the time to buy Williams-Sonoma? 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.

RH pulled off the fastest revenue growth in the group. The stock is down 13.9% since the results and currently trades at $238.36.

Read our full analysis of RH's results here.

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, surpassing 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 stock is up 19.8% since the results and currently trades at $15.8.

Read our full, actionable report on Arhaus here, it's free.

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