Furniture/Furnishings Weekly
Home goods retailers and furniture manufacturers fell in a week of tough earnings news. Ethan Allen Interiors (ETD) reported adjusted EPS of $0.63 for 1QFY24, down from $1.11 last year and below consensus of $0.72. Positives in the quarter included a 70-basis point improvement in gross margin of 61.1% despite 23% lower sales. SG&A efficiencies helped but were insufficient to offset fixed cost deleverage. Operating margin fell 550 bps to 12.1%. Cash flow remained positive, and the company declared a special dividend of $0.50. ETD fell ~9% for the week. On Tuesday, Aaron’s Co. (AAN) reported 3Q23 EPS of $0.01 versus expectations of $0.07. Revenue missed ($525.7 million versus $536.1 million expected) as did EBITDA ($24.3 million versus $29.5 million expected). The company moderated full-year expectations for revenue, EPS, EBITDA, and cash flow. AAN fell ~21% for the week. Overstock.com (OSTK) reported EPS of a loss of $0.61, better than the expected loss of $0.83. Revenue missed as sales were $373.3 million versus $396.1 million expected. EBITDA was ($23.9 million) versus ($29.8 million) expected. OSTK fell ~20% for the week. Mattress issues Sleep Number (SNBR) and Purple Innovations (PRPL) were lower ~20% on published notes calling for near-term caution for bedding. Both KeyBanc and Raymond James published notes suggesting flat demand comparisons and favoring TempurPedic (TPX) versus direct peers. Macro data for the consumer was positive. The Michigan Consumer Sentiment Index was revised higher to 63.8, still lower than the May peak, but optimistic, nonetheless. New home sales surprised on the positive side, jumping to a SAAR of 759,000 units in September. We updated our economic stats below. We combined the new and existing home sales into a single chart and added the Job Openings and Labor Turnover Survey (JOLTS), a widely followed indicator of the health of the job market. The JOLTS figures show that the job market remains resilient and stronger than the pre-pandemic environment.
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