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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.

Equity Research Firm

Thematic (Sector/Industry)

<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, <span style="font-size: var(--content-font-size);">sequentially, demand was weakest in January and improved </span>(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

<ul><li>It was a mixed week in stocks, with most Water Tower Research furniture/furnishings indexes outperforming (with Residential the weak spot following LEG’s dividend cut).</li><li>Our Home Goods Retailers Index (+6.0%) significantly outperformed the broader market (+0.2% to +1.0%) as well as our Mass Retailers Index (+1.8%) and our Commercial/Contract Furniture Index (+1.6%).</li><li>Our Residential Manufacturers &amp; Suppliers Index declined 0.9%, driven in part by Leggett &amp; Platt’s steep 23.9% sell-off following its 1Q24 earnings release and investor call.</li></ul>

It was a mixed week in stocks, with most Water Tower Research furniture/furnishings indexes outperforming (with Residential the weak spot following LEG’s dividend cut).Our Home Goods Retailers Index (+6.0%) significantly outperformed the broader market (+0.2% to +1.0%) as well as our Mass Retailers Index (+1.8%) and our Commercial/Contract Furniture Index (+1.6%).Our Residential Manufacturers &amp; Suppliers Index declined 0.9%, driven in part by Leggett &amp; Platt’s steep 23.9% sell-off following its 1Q24 earnings release and investor call.

Furniture/Furnishings Weekly - May 6, 2024

<ul><li>Residential furniture and home goods retailer issues performed well last week versus the market, while the Commercial/Contract Furniture stocks, by and large, tread water.</li><li>Our Residential Manufacturers &amp; Suppliers index advanced 3.2%, outperforming the broader market indexes (up between 1.6 to 1.8%), while our Home Goods Retailers and Mass Retailers indexes each grew by 0.7%.</li><li>Only our Commercial/Contract Furniture Index lagged, down 0.3%.</li></ul>

Residential furniture and home goods retailer issues performed well last week versus the market, while the Commercial/Contract Furniture stocks, by and large, tread water.Our Residential Manufacturers &amp; Suppliers index advanced 3.2%, outperforming the broader market indexes (up between 1.6 to 1.8%), while our Home Goods Retailers and Mass Retailers indexes each grew by 0.7%.Only our Commercial/Contract Furniture Index lagged, down 0.3%.

Furniture/Furnishings Weekly - Weak Bedding, Furniture Demand

<ul><li>Our Commercial/Contract Furniture Index was up 0.6% for the week, notably outperforming the three market indexes and the Mass Retailers Index (down between 1.4% and 3.2% for the week).</li><li>Our Residential Manufacturers <span style="font-size: var(--content-font-size);">&amp; Suppliers Index (down 3.5%) and Home Goods Retailers Index </span>(down 2.9%) were more in line with the broader market indexes.</li><li>Home goods retailer Beyond sold the Wamsutta brand/IP to Indo Count Global for $10.3 million as the firm focuses on integrating its purchase of Bed, Bath, and Beyond into its portfolio of online properties.</li></ul>

Our Commercial/Contract Furniture Index was up 0.6% for the week, notably outperforming the three market indexes and the Mass Retailers Index (down between 1.4% and 3.2% for the week).Our Residential Manufacturers &amp; Suppliers Index (down 3.5%) and Home Goods Retailers Index (down 2.9%) were more in line with the broader market indexes.Home goods retailer Beyond sold the Wamsutta brand/IP to Indo Count Global for $10.3 million as the firm focuses on integrating its purchase of Bed, Bath, and Beyond into its portfolio of online properties.

Furniture/Furnishings Weekly - April 22, 2024

<ul><li>The Water Tower Research Office Index posted the best relative performance of the week, up 1.6%, compared with the other indexes, which fell between 1% and 2.8%.</li><li>Both the Residential Manufacturers (-4.4%) and Home Goods Retailers (-5.1%) had rough weeks on a relatively quiet news front.</li><li>Bassett reported its 1QFY24 results, missing our revenue and EPS estimates.</li></ul>

The Water Tower Research Office Index posted the best relative performance of the week, up 1.6%, compared with the other indexes, which fell between 1% and 2.8%.Both the Residential Manufacturers (-4.4%) and Home Goods Retailers (-5.1%) had rough weeks on a relatively quiet news front.Bassett reported its 1QFY24 results, missing our revenue and EPS estimates.

Furniture/Furnishings Weekly - Office Index Outperforms

United States

Leggett & Platt, Incorporated manufactures a wide range of engineered products. The Company's products include components for bedding, furniture, and other residential furnishings, as well as office and institutional furnishings components, retail store fixtures, and displays, specialty wire products, and automotive seating suspension and lumbar systems.

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Leggett & Platt (LEG US)

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

Furniture/Furnishings Weekly - May 6, 2024

It was a mixed week in stocks, with most Water Tower Research furniture/furnishings indexes outperforming (with Residential the weak spot following...

Water Tower Research

Furniture/Furnishings Weekly - Weak Bedding, Furniture Demand

Residential furniture and home goods retailer issues performed well last week versus the market, while the Commercial/Contract Furniture stocks, by...

Water Tower Research

Furniture/Furnishings Weekly - April 22, 2024

Our Commercial/Contract Furniture Index was up 0.6% for the week, notably outperforming the three market indexes and the Mass Retailers Index (down...

Water Tower Research

Furniture/Furnishings Weekly - Office Index Outperforms

The Water Tower Research Office Index posted the best relative performance of the week, up 1.6%, compared with the other indexes, which fell...

Water Tower Research

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