Wrapping up Q2 earnings, we look at the numbers and key takeaways for the home furnishings stocks, including Somnigroup (NYSE: SGI) 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 satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 1% above.
In light of this news, share prices of the companies have held steady as they are up 4% on average since the latest earnings results.
Somnigroup (NYSE: SGI)
Established through the merger of Tempur-Pedic and Sealy in 2012, Somnigroup (NYSE: SGI) is a bedding manufacturer known for its innovative memory foam mattresses and sleep products
Somnigroup reported revenues of $1.88 billion, up 52.5% year on year. This print fell short of analysts’ expectations by 0.6%. Overall, it was a mixed quarter for the company.
Company Chairman and CEO Scott Thompson commented, "We are pleased to report another solid quarter of market outperformance, driven by the successful combination with Mattress Firm, the North American launch of our new Sealy line, and another quarter of robust sales growth for our international business. We have made significant progress on bringing Mattress Firm into Somnigroup. Teams are aligned and we are realizing both cost and sales synergies ahead of our purchase assumptions.
Somnigroup scored the fastest revenue growth but had the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is up 16.3% since reporting and currently trades at $85.55.
Is now the time to buy Somnigroup? Access our full analysis of the earnings results here, it’s free.
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.
The market seems happy with the results as the stock is up 23.3% since reporting. It currently trades at $1.05.
Is now the time to buy Purple? Access our full analysis of the earnings results here, it’s free.
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, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ EPS and adjusted operating income estimates.
As expected, the stock is down 13.9% since the results and currently trades at $33.70.
Read our full analysis of La-Z-Boy’s results here.
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. This result met analysts’ expectations. More broadly, it was a mixed quarter as it also recorded a decent beat of analysts’ adjusted operating income estimates.
Leggett & Platt had the weakest full-year guidance update among its peers. The stock is down 1.7% since reporting and currently trades at $9.37.
Read our full, actionable report on Leggett & Platt here, it’s free.
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 number beat analysts’ expectations by 2.2%. Aside from that, it was a satisfactory quarter as it also logged a solid beat of analysts’ organic revenue estimates but EPS guidance for next quarter missing analysts’ expectations.
Mohawk Industries delivered the biggest analyst estimates beat among its peers. The stock is up 12.6% since reporting and currently trades at $130.66.
Read our full, actionable report on Mohawk Industries here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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