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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Thematic (Sector/Industry)

<ul><li>Furniture and furnishings stocks moved sharply higher, as a small-cap rotation on top of generally positive sentiments dominated trading, in what is likely an anticipation of economic gains from the new administration’s policies.</li><li>The Water Tower Research Commercial/Contract Furniture Index was up 5.2%, the Residential Manufacturers &amp; Suppliers Index was up 7.2%, and the Home Goods Retailers Index was up 4.0%, while the large- cap indexes gained 2.7% and the R2K was up 3.8%.</li><li><span style="font-size: var(--content-font-size);">ARHS noted (1) its 4Q24 comps sales were up 6%, </span>reversing the “low single-digit declines” seen in October.</li></ul>

Furniture and furnishings stocks moved sharply higher, as a small-cap rotation on top of generally positive sentiments dominated trading, in what is likely an anticipation of economic gains from the new administration’s policies.The Water Tower Research Commercial/Contract Furniture Index was up 5.2%, the Residential Manufacturers &amp; Suppliers Index was up 7.2%, and the Home Goods Retailers Index was up 4.0%, while the large- cap indexes gained 2.7% and the R2K was up 3.8%.ARHS noted (1) its 4Q24 comps sales were up 6%, reversing the “low single-digit declines” seen in October.

Furniture/Furnishings Weekly - ARHS 4Q Comps Up, Time at Home Up

<ul><li>Stocks were down as the Financial Conditions Index (FCI) tightened, indicating tougher financing conditions for both firms and individuals, on elevated inflation concerns and anticipation of a more hawkish Fed.</li><li>The Water Tower Research Commercial/Contract Furniture Index declined 5.0% and the Residential Manufacturers &amp; Suppliers Index fell 2.5%, while the Home Goods Retailers Index improved 0.3%.</li><li>The large- cap indexes fell 1.9%, while the R2K fell 3.4%.</li></ul>

Stocks were down as the Financial Conditions Index (FCI) tightened, indicating tougher financing conditions for both firms and individuals, on elevated inflation concerns and anticipation of a more hawkish Fed.The Water Tower Research Commercial/Contract Furniture Index declined 5.0% and the Residential Manufacturers &amp; Suppliers Index fell 2.5%, while the Home Goods Retailers Index improved 0.3%.The large- cap indexes fell 1.9%, while the R2K fell 3.4%.

Furniture/Furnishings Weekly - Climate Change; Lower Household Formation Rates, Globally

<ul><li>It was a relatively quiet holiday-shortened trading week.</li><li>The Water Tower Research Commercial/Contract Furniture Index was down (-2.5%) and the Residential Manufacturers &amp; Suppliers Index was down (-0.3%), while the Home Goods Retailers Index was up 2.0% in a week where the large-cap indexes modestly declined (-0.5%) and the R2K was up 0.9%.</li><li>SCS posted solid 3QFY25 results (on December 18), noting that while FY25 demand has been a bit weaker than expected at the beginning of the year, recent activity suggests demand (finally) may be inflecting, especially in the Americas segment (~3/4 of revenue).</li></ul>

It was a relatively quiet holiday-shortened trading week.The Water Tower Research Commercial/Contract Furniture Index was down (-2.5%) and the Residential Manufacturers &amp; Suppliers Index was down (-0.3%), while the Home Goods Retailers Index was up 2.0% in a week where the large-cap indexes modestly declined (-0.5%) and the R2K was up 0.9%.SCS posted solid 3QFY25 results (on December 18), noting that while FY25 demand has been a bit weaker than expected at the beginning of the year, recent activity suggests demand (finally) may be inflecting, especially in the Americas segment (~3/4 of revenue).

Furniture/Furnishings Weekly SCS 3QFY25 Earnings; Winner Takes Most in US Retail

<ul><li>It was a mixed week for furniture and furnishings stocks, as earnings results and company-specific factors seemed to dominate trading for several issuers (LOVE, RH, BYON) while the market waits for the Fed’s next move.</li><li>The WTR Commercial/Contract Furniture Index was down 3.7%, the Residential Manufacturers &amp; Suppliers Index was down 4.8%, the Home Goods Retailers Index was up 1.3%, and the Mass Retailers Index was down 0.1% for the week, while the large-cap indexes were flat and the R2K was down 2.0%.</li><li>RH up big after demonstrating market share gains in its latest quarter and accelerating demand trends in the core business. </li></ul>

It was a mixed week for furniture and furnishings stocks, as earnings results and company-specific factors seemed to dominate trading for several issuers (LOVE, RH, BYON) while the market waits for the Fed’s next move.The WTR Commercial/Contract Furniture Index was down 3.7%, the Residential Manufacturers &amp; Suppliers Index was down 4.8%, the Home Goods Retailers Index was up 1.3%, and the Mass Retailers Index was down 0.1% for the week, while the large-cap indexes were flat and the R2K was down 2.0%.RH up big after demonstrating market share gains in its latest quarter and accelerating demand trends in the core business. 

Furniture/Furnishings Weekly - December 16, 2024

<ul><li>The market was of two minds the past week, with big caps outperforming small caps and furniture and furnishings retailers outperforming manufacturers.</li><li>The WTR Commercial/Contract Furniture Index was down 2.6% and the Residential Manufacturers &amp; Suppliers Index was down 0.2%, while the Home Goods Retailers Index was up 2.9% and the Mass Retailers Index was up 5.4%.</li><li>The S&amp;P 500 and DJ30 were both up 0.7%, while the R2K fell 1.2%.</li></ul>

The market was of two minds the past week, with big caps outperforming small caps and furniture and furnishings retailers outperforming manufacturers.The WTR Commercial/Contract Furniture Index was down 2.6% and the Residential Manufacturers &amp; Suppliers Index was down 0.2%, while the Home Goods Retailers Index was up 2.9% and the Mass Retailers Index was up 5.4%.The S&amp;P 500 and DJ30 were both up 0.7%, while the R2K fell 1.2%.

Furniture/Furnishings Weekly Black Friday; Furniture Demand Still Weak

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)

Furniture/Furnishings Weekly - ARHS 4Q Comps Up, Time at Home Up

Furniture and furnishings stocks moved sharply higher, as a small-cap rotation on top of generally positive sentiments dominated trading

Water Tower Research

Furniture/Furnishings Weekly - Climate Change; Lower Household Formation Rates, Globally

Stocks were down as the Financial Conditions Index (FCI) tightened, indicating tougher financing conditions for both firms and individuals

Water Tower Research

Furniture/Furnishings Weekly SCS 3QFY25 Earnings; Winner Takes Most in US Retail

The Water Tower Research Commercial/Contract Furniture Index was down (-2.5%) and the Residential Manufacturers & Suppliers Index was down (-0.3%)

Water Tower Research

Furniture/Furnishings Weekly - December 16, 2024

It was a mixed week for furniture and furnishings stocks, as earnings results and company-specific factors seemed to dominate trading for several...

Water Tower Research

Furniture/Furnishings Weekly Black Friday; Furniture Demand Still Weak

The market was of two minds the past week, with big caps outperforming small caps and furniture and furnishings retailers outperforming manufacturers.

Water Tower Research

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