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Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<ul><li>A rough week for furniture and furnishings stocks as the earnings picture for the broader market continues to paint a cloudy picture.</li><li>Last week was the peak of earnings season and the outlook remains mooted.</li><li>Fewer companies beat expectations and when they did, the beat was less vigorous than average.</li></ul>

A rough week for furniture and furnishings stocks as the earnings picture for the broader market continues to paint a cloudy picture.Last week was the peak of earnings season and the outlook remains mooted.Fewer companies beat expectations and when they did, the beat was less vigorous than average.

Furniture/Furnishings Weekly - November 4, 2024

<ul><li>Stocks had a tough week and furniture and furnishing stocks went along for the ride.</li><li>Rising yields (on growing concerns over the sustainability of debt levels and deficit spending and growing comfort with the no/soft landing scenario), cautious earnings outlook commentary, concerns that Chinese stimulus is not vigorous enough, geopolitical tension, and election/policy uncertainty all noted.</li><li>The WTR Commercial/Contract Index (-3.5%), Residential Manufacturers &amp; Suppliers Index (-0.5%), Home Goods Retailers (-5.3%), and Mass Retailers (-0.4%) were all down, as were the S&amp;P 500 and DJ30 (both -0.8%), and the R2K (-1.4%).</li></ul>

Stocks had a tough week and furniture and furnishing stocks went along for the ride.Rising yields (on growing concerns over the sustainability of debt levels and deficit spending and growing comfort with the no/soft landing scenario), cautious earnings outlook commentary, concerns that Chinese stimulus is not vigorous enough, geopolitical tension, and election/policy uncertainty all noted.The WTR Commercial/Contract Index (-3.5%), Residential Manufacturers &amp; Suppliers Index (-0.5%), Home Goods Retailers (-5.3%), and Mass Retailers (-0.4%) were all down, as were the S&amp;P 500 and DJ30 (both -0.8%), and the R2K (-1.4%).

Furniture/Furnishings Weekly - October 28, 2024

<ul><li>A relatively quiet week for the markets as earnings growth through the start of earnings season, increasing confidence around the no/soft landing scenario, and China stimulus offset growing concerns over luxury spend.</li><li>The WTR Commercial/Contract Furniture Index was up 2.2% and the WTR Residential Manufacturers &amp; Suppliers Index was up 1%, while the WTR Home Goods Retailers Index was down 0.9%.</li><li>The DJ30 and S&amp;P 500 were both flat at +0.1%, while the R2K was up 1.2%. The WTR Mass Retailers Index was up 0.7%.</li></ul>

A relatively quiet week for the markets as earnings growth through the start of earnings season, increasing confidence around the no/soft landing scenario, and China stimulus offset growing concerns over luxury spend.The WTR Commercial/Contract Furniture Index was up 2.2% and the WTR Residential Manufacturers &amp; Suppliers Index was up 1%, while the WTR Home Goods Retailers Index was down 0.9%.The DJ30 and S&amp;P 500 were both flat at +0.1%, while the R2K was up 1.2%. The WTR Mass Retailers Index was up 0.7%.

Furniture/Furnishings Weekly: BYON Strikes Deals with TCS and KIRK for Bed Bath & Beyond Brand

Equity Bottom-Up

Bassett Furniture Inds / Equity Bottom-Up

<ul><li>We are updating our 4QFY24 and revenue and adjusted EPS estimates for BSET following the company’s earnings release and investor call (see 1 for our summary of the quarter).</li><li>As noted, industry conditions for residential furniture remain challenging, with the housing market (still) stuck and consumer spending on furniture and furnishings subdued after the COVID pull-through, when many people renovated their homes.</li><li>Near term, we expect demand to remain subdued, even as easier comps and some return to normal demand dynamics gain traction over the next several quarters.</li></ul>

We are updating our 4QFY24 and revenue and adjusted EPS estimates for BSET following the company’s earnings release and investor call (see 1 for our summary of the quarter).As noted, industry conditions for residential furniture remain challenging, with the housing market (still) stuck and consumer spending on furniture and furnishings subdued after the COVID pull-through, when many people renovated their homes.Near term, we expect demand to remain subdued, even as easier comps and some return to normal demand dynamics gain traction over the next several quarters.

Bassett Furniture Industries, Inc. - New Revenue and EPS Estimates

<ul><li>Furniture and furnishing stocks underperformed the broader market this week.</li><li>The Water Tower Research Commercial/Contract Furniture Index (-0.5%), Residential Manufacturers &amp; Suppliers Index (-2.4%), and Home Goods Retailers Index (-1.1%) trailed the DJ30 and S&amp;P 500 (both +2.1%) and the R2K (+1.7%).</li><li>The Water Tower Research Mass Retailers Index was up (+3.2%).</li></ul>

Furniture and furnishing stocks underperformed the broader market this week.The Water Tower Research Commercial/Contract Furniture Index (-0.5%), Residential Manufacturers &amp; Suppliers Index (-2.4%), and Home Goods Retailers Index (-1.1%) trailed the DJ30 and S&amp;P 500 (both +2.1%) and the R2K (+1.7%).The Water Tower Research Mass Retailers Index was up (+3.2%).

Furniture/Furnishings Weekly - October 14, 2024

United States

Bassett Furniture Industries, Incorporated manufactures and sells a full line of furniture for the home.  The Company offers bedroom and dining suites, occasional tables and entertainment units, upholstered sofas and love seats, recliners, and mattresses, among other products.  Bassett's products are sold through retailers, including Bassett Furniture Direct.

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Bassett Furniture Inds (BSET US)

Furniture/Furnishings Weekly - November 4, 2024

A rough week for furniture and furnishings stocks as the earnings picture for the broader market continues to paint a cloudy picture.

Water Tower Research

Furniture/Furnishings Weekly - October 28, 2024

Rising yields (on growing concerns over the sustainability of debt levels and deficit spending and growing comfort with the no/soft landing scenario)

Water Tower Research

Furniture/Furnishings Weekly: BYON Strikes Deals with TCS and KIRK for Bed Bath & Beyond Brand

A relatively quiet week for the markets as earnings growth through the start of earnings season, increasing confidence around the no/soft landing...

Water Tower Research

Bassett Furniture Industries, Inc. - New Revenue and EPS Estimates

We are updating our 4QFY24 and revenue and adjusted EPS estimates for BSET following the company’s earnings release and investor call (see 1 for...

Water Tower Research

Furniture/Furnishings Weekly - October 14, 2024

BSET’s recent quarterly report (1) and investor call suggest that, not surprisingly, conditions in the residential furniture industry remain...

Water Tower Research

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