Furniture/Furnishings Weekly
Economic headlines had two items affecting furniture/furnishings: one good, one not. The Positive: The University of Michigan Consumer Sentiment gauge (as distinguished from Consumer Confidence reported below) surged 29% over two months. The mid-January reading jumped 13% to 79, the highest since early 2021. The Wall Street Journal gave credit to lower inflation, lower gas prices, and continued strength in the job market. We suspect a strong equity market and higher year-end 401(k) balances contributed as well. The sentiment index has tracked Consumer Confidence directionally, but with greater volatility. The Negative: 2023 existing home sales dropped to just under 4.1 million units, the lowest level in 28 years. The culprits include high mortgage rates, constrained supply, and high prices. Adding insult to injury, the December SAAR dropped to a new low at 3.78 million homes, down from 3.82 million in the prior month. Online retailer Wayfair announced steep staff reductions on Friday. CEO Niraj Shah said 1,650 corporate employees would be furloughed. The cuts represent 19% of corporate staff and 13% of the total workforce, which includes warehouse and customer service workers. Investors cheered the announcement. The stock rose 10%. Leggett & Platt announced a major restructuring headlined to “Drive Improved Performance and Profitable Growth.” Elements include: (1) a $450 million impairment; (2) a withdrawal of LT targets; and (3) a $40-50 million annualized EBIT gain when fully implemented (2025). The stock fell 10%. Water Tower Research’s inaugural Furniture/Furnishings Virtual Conference was held on Wednesday, January 17, 2024, with more than 130 registered participants. We look forward to hosting another. We would like to thank ANDMORE, Culp, Inc. Ethan Allen Interiors, Inc. Flexsteel Industries, Inc. HNI Corporation, Haverty Furniture Companies, Inc. Hooker Furnishings Corporation, Marxent, MillerKnoll, Inc. and Steelcase, Inc. for their participation. The on-demand link is accessible in our full report.
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