Research from Water Tower Research, Water Tower Research

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>Furniture/furnishings stocks trailed the broader market.</li><li>The Water Tower Research Commercial/Contract Index (-1.7%), Residential Manufacturers &amp; Suppliers Index (-2.0%), and Home Goods Retailers Index (-2.0%) trailed the broader market indexes and the Mass Retailers Index (-1.3% to +1.3%) last week.</li><li>LOVE 1Q25 paints a picture of continued weakness in residential furniture even as the company appears to be continuing to gain share. </li></ul>

Furniture/furnishings stocks trailed the broader market.The Water Tower Research Commercial/Contract Index (-1.7%), Residential Manufacturers &amp; Suppliers Index (-2.0%), and Home Goods Retailers Index (-2.0%) trailed the broader market indexes and the Mass Retailers Index (-1.3% to +1.3%) last week.LOVE 1Q25 paints a picture of continued weakness in residential furniture even as the company appears to be continuing to gain share. 

INDUSTRY REPORT - Furniture/Furnishings Weekly

<ul><li>A rough week for smaller-cap stocks without AI exposure.</li><li>The WTR Commercial/Contract Furniture Index (-6.9%), Residential Manufacturers &amp; Suppliers Index (-1.4%), and Home Goods Retailers Index (-1.3%) underperformed the Dow (+1.2%), S&amp;P 500 (+1.2%), and Mass Retailers Index (+1.9%), all of which benefited from the growing AI hype this week.</li><li>This performance seems to be partly due to the overall weakness of small caps, with the Russell 2000 clocking in (-1.7%).</li></ul>

A rough week for smaller-cap stocks without AI exposure.The WTR Commercial/Contract Furniture Index (-6.9%), Residential Manufacturers &amp; Suppliers Index (-1.4%), and Home Goods Retailers Index (-1.3%) underperformed the Dow (+1.2%), S&amp;P 500 (+1.2%), and Mass Retailers Index (+1.9%), all of which benefited from the growing AI hype this week.This performance seems to be partly due to the overall weakness of small caps, with the Russell 2000 clocking in (-1.7%).

Furniture/Furnishings Weekly - June 10, 2024

<ul><li>A good week for furniture and furnishings stocks. The Water Tower Research Commercial/Contract Index (+3.5%) and Home Goods Retailers Index (+2.5%) posted strong returns relative to the market (-0.5% to +0.1%) and the Mass Retailers Index (-0.6%).</li><li>Our Residential Manufacturers &amp; Suppliers Index (-0.5%) was in line with the broader market.</li><li>The China price is now the highest in Asia. According to Science Is Strategic (citing Haver Analytics), unit labor rates in China are now ~2.5x to 4x higher than other Asian countries (see Figure 1). </li></ul>

A good week for furniture and furnishings stocks. The Water Tower Research Commercial/Contract Index (+3.5%) and Home Goods Retailers Index (+2.5%) posted strong returns relative to the market (-0.5% to +0.1%) and the Mass Retailers Index (-0.6%).Our Residential Manufacturers &amp; Suppliers Index (-0.5%) was in line with the broader market.The China price is now the highest in Asia. According to Science Is Strategic (citing Haver Analytics), unit labor rates in China are now ~2.5x to 4x higher than other Asian countries (see Figure 1). 

Furniture/Furnishings Weekly - June 3, 2024

<ul><li>A tough week for our indexes. It was a down week in the market for Water Tower Research’s Residential Manufacturers &amp; Suppliers Index (-6.4%) and Home Goods Retailers Index (- 6.7%) relative to the broader market indexes (-0.1% to -1.5%) and the Mass Retailers Index (-1.6%).</li><li>On a relative basis, the Commercial/Contract Furniture Index (-1.0%) outperformed.</li><li>Leggett reappointed Karl Glassman as CEO. Amidst the ongoing mattress industry recession/depression, Glassman, who served as Leggett’s CEO from 2016 to 2021 and Board Chair since 2020, was again appointed President and CEO, succeeding CEO Mitch Dolloff, who resigned.</li></ul>

A tough week for our indexes. It was a down week in the market for Water Tower Research’s Residential Manufacturers &amp; Suppliers Index (-6.4%) and Home Goods Retailers Index (- 6.7%) relative to the broader market indexes (-0.1% to -1.5%) and the Mass Retailers Index (-1.6%).On a relative basis, the Commercial/Contract Furniture Index (-1.0%) outperformed.Leggett reappointed Karl Glassman as CEO. Amidst the ongoing mattress industry recession/depression, Glassman, who served as Leggett’s CEO from 2016 to 2021 and Board Chair since 2020, was again appointed President and CEO, succeeding CEO Mitch Dolloff, who resigned.

Furniture/Furnishings Weekly - May 28, 2024

<ul><li>Furniture and furnishing stocks performed well last week. All three of the WTR indexes outperformed the broader market, led by Residential Manufacturers &amp; Suppliers (+3.3%), Commercial/Contract Furniture (+3.2%) and Home Goods Retailers (+2.7%), which outperformed the broader markets (- 0.1% to +0.8%) and the Mass Retailers Index (+0.1%).</li><li>Mattress demand remains weak. Tempur Sealy International (TPX) CEO Scott Thompson noted in his 1Q24 remarks, “You’d have to say the bedding industry is in a depression and has been in one for a number of quarters” , with demand down an estimated 15% industry-wide in the first three months of the year.</li><li>For TPX, sequentially, demand was weakest in January and improved (though erratically) through April, where it was ‘flattish’. Higher- end price points were a bright spot.</li></ul>

Furniture and furnishing stocks performed well last week. All three of the WTR indexes outperformed the broader market, led by Residential Manufacturers &amp; Suppliers (+3.3%), Commercial/Contract Furniture (+3.2%) and Home Goods Retailers (+2.7%), which outperformed the broader markets (- 0.1% to +0.8%) and the Mass Retailers Index (+0.1%).Mattress demand remains weak. Tempur Sealy International (TPX) CEO Scott Thompson noted in his 1Q24 remarks, “You’d have to say the bedding industry is in a depression and has been in one for a number of quarters” , with demand down an estimated 15% industry-wide in the first three months of the year.For TPX, sequentially, demand was weakest in January and improved (though erratically) through April, where it was ‘flattish’. Higher- end price points were a bright spot.

Furniture/Furnishings Weekly - May 13, 2024

United States

Ethan Allen Interiors Inc. designs, manufactures, sources, sells, and distributes a range of home furnishings and accessories. The Company offers a variety of products including case goods items, such as beds, dressers, tables, chairs, buffets, entertainment units, home office furniture, and wooden accents. Ethan Allen Interiors serves clients worldwide.

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Ethan Allen Interiors (ETD US)

INDUSTRY REPORT - Furniture/Furnishings Weekly

The Water Tower Research Commercial/Contract Index (-1.7%), Residential Manufacturers & Suppliers Index (-2.0%), and Home Goods Retailers Index (...

Water Tower Research

Furniture/Furnishings Weekly - June 10, 2024

The WTR Commercial/Contract Furniture Index (-6.9%), Residential Manufacturers & Suppliers Index (-1.4%), and Home Goods Retailers Index (-1.3%)...

Water Tower Research

Furniture/Furnishings Weekly - June 3, 2024

The Water Tower Research Commercial/Contract Index (+3.5%) and Home Goods Retailers Index (+2.5%) posted strong returns relative to the market (...

Water Tower Research

Furniture/Furnishings Weekly - May 28, 2024

It was a down week in the market for Water Tower Research’s Residential Manufacturers & Suppliers Index (-6.4%) and Home Goods Retailers Index (-...

Water Tower Research

Furniture/Furnishings Weekly - May 13, 2024

Furniture and furnishing stocks performed well last week. All three of the WTR indexes outperformed the broader market, led by Residential...

Water Tower Research

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