It wasn’t the best of quarters. But it certainly wasn’t the worst either for publicly traded home furnishings retailers who continued to inch back to better performances at the end of their fiscal years.
A cross section of the most recent financial results—which included the all-important holiday selling period—shows small progress across the board for most of the big platters in the space, although for some companies it was more about doing less worse than doing well. After the last few years of dismal sales, retailers will take it.
Of course, all of these results predate the chaos of the past few weeks on Wall Street, in global trade and the overall economy. How exactly all of that will impact consumers rushing out and buying new furniture is anybody’s guess. Certainly higher prices caused by tariffs, increases in unemployment and the potential for a recession coupled with the return of increased inflation are all dark—possibly very dark—clouds for anyone trying to sell home products.
So down the line, these reports may end up looking like time capsules from a different era. But for the time being, it’s worth looking at where things stood before Trump’s on-again off-again trade war picked up steam.
You have to start with Home Depot and Lowe’s, the home improvement doppelgängers that are often the leading edge of economic trends. If you buy into that theory, their most recent quarterly results are encouraging. Both showed small gains in comp store revenues for their quarters, and while analysts and investors might have been hoping for more, these were their most positive results in two years.
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Home Depot led the way, with sales for its fourth quarter up 14.1 percent, although that reflected recent acquisitions. Comp store revenues increased 0.8 percent, its first gain in eight quarters, while U.S. comparable sales gained 1.3 percent. Net earnings were also up for the quarter. “Our fourth-quarter results exceeded our expectations, as we saw greater engagement in home improvement spend, despite ongoing pressure on large remodeling projects,” said CEO Ted Decker.
Lowe’s comp sales for the quarter were up 0.2 percent, also its first gain in the past eight quarters. The company saw improvements in its pro business, online sales and holiday business and also noted some gains related to rebuilding from last fall’s hurricanes that hit the Southeast.
The country’s publicly listed furniture retailers showed very slight improvement over prior periods. Still, sales in the plus column remained elusive. Arhaus, the upscale chain that now has 100 locations—up from 92 a year ago—had flat sales for its quarter, showing same-store comps falling 6.4 percent.
Ethan Allen reported both net and wholesale sales off slightly for its quarter. However, it said retail written orders were up 15.8 percent and wholesale written orders increased 14.3 percent. Though the call happened before the on-again, off-again tariffs were officially rolled out, CEO Farooq Kathwari made a point to discuss the company’s North American supply chain, telling analysts that it had a little flexibility to move some upholstery production from Mexico to North Carolina.
Haverty’s, which operates primarily in the Southeast, was a case of “less bad.” In reporting its results at the end of February, the company said overall sales declined 12.5 percent for the quarter—not great, but smaller losses than in some most recent quarters. Comp store sales were similar.
A bit of bright news came from La-Z-Boy, which sells its products both in its own stores and to other dealers. In February, it said sales for its third quarter were up 4 percent and 15 percent in its owned-and-operated locations. CEO Melinda Whittington, in acknowledging the overall market, said, “While underlying housing fundamentals remain challenged, we are focused on solving for the unique needs of the consumer...and controlling what we can control with strong execution.”
The elephant in the better furniture and furnishings room has yet to be heard from: RH is expected to report its next quarterly results on March 26. According to Yahoo Finance, their estimates on sales for the quarter from 12 analysts show a 12.2 percent increase in overall revenues for the period; all eyes will be on Chairman and CEO Gary Friedman when the real figures are released.
All of these numbers are now in the past, and it’s what’s next that people are trying to figure out. Certainly higher prices caused by tariffs, increases in unemployment and the potential for a recession coupled with the return of increased inflation are all dark clouds for anyone trying to sell home products. But given the uncertainty of this politically charged economy, all bets are off.