Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Floor And Decor (NYSE:FND) and the best and worst performers in the home furnishing and improvement retail industry.
Home furnishing and improvement retailers understand that ‘home is where the heart is’ but that a home is only right when it’s in livable condition and furnished just right. These stores therefore focus on providing what is needed for both the upkeep of a house as well as what is desired for the aesthetics of a home. Decades ago, it was thought that furniture and home improvement would resist e-commerce because of the logistical challenges of shipping a sofa or lawn mower, but now you can buy both online; so just like other retailers, these stores need to adapt to new realities and consumer behaviors.
The 7 home furnishing and improvement retail stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 0.9% while next quarter’s revenue guidance was 7.2% below.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
Thankfully, home furnishing and improvement retail stocks have been resilient with share prices up 6.2% on average since the latest earnings results.
Floor And Decor (NYSE:FND)
Operating large, warehouse-style stores, Floor & Decor (NYSE:FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.
Floor And Decor reported revenues of $1.13 billion, flat year on year. This print fell short of analysts’ expectations by 1.7%. Overall, it was a slower quarter for the company with underwhelming earnings guidance for the full year.
Tom Taylor, Chief Executive Officer, stated, “We and our industry continue to contend with monetary policy affecting the housing market and repair and remodeling spending, including ongoing soft demand for large project discretionary hard surface flooring. Consequently, our second quarter total and comparable store sales were modestly below our expectations. However, our gross margin rate exceeded our expectations, which, coupled with prudent expense management, helped mitigate most of the impact from weak sales. This dynamic enabled us to report fiscal 2024 second quarter diluted earnings per share of $0.52, compared with $0.66 in the same period last year. We continue to implement strategies designed to grow our market share while working prudently to manage our profitability and maintain a strong balance sheet in this challenging period.”
Interestingly, the stock is up 10.3% since reporting and currently trades at $103.79.
Read our full report on Floor And Decor here, it’s free.
Best Q2: 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 $408.4 million, down 11% year on year, falling short of analysts’ expectations by 1.9%. However, the business still had a very strong quarter with an impressive beat of analysts’ earnings and EBITDA estimates.
The market seems happy with the results as the stock is up 19.7% since reporting. It currently trades at $14.16.
Is now the time to buy Sleep Number? 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 $309.8 million, flat year on year, falling short of analysts’ expectations by 1.4%. It was a slower quarter as it posted revenue guidance for next quarter missing analysts’ expectations.
Arhaus delivered the weakest full-year guidance update in the group. As expected, the stock is down 37.1% since the results and currently trades at $8.71.
Read our full analysis of Arhaus’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 of high-end furniture and home decor.
RH reported revenues of $829.7 million, up 3.6% year on year. This number met analysts’ expectations. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ gross margin estimates.
RH delivered the fastest revenue growth among its peers. The stock is up 27.6% since reporting and currently trades at $327.49.
Read our full, actionable report on RH here, it’s free.
Home Depot (NYSE:HD)
Founded and headquartered in Atlanta, Georgia, Home Depot (NYSE:HD) is a home improvement retailer that sells everything from tools to building materials to appliances.
Home Depot reported revenues of $43.18 billion, flat year on year. This result beat analysts’ expectations by 1.1%. Taking a step back, it was a satisfactory quarter as it also logged a decent beat of analysts’ EBITDA estimates but a miss of analysts’ gross margin estimates.
Home Depot achieved the biggest analyst estimates beat among its peers. The stock is up 15.3% since reporting and currently trades at $399.
Read our full, actionable report on Home Depot here, it’s free.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.