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>Policy uncertainty has increased investor uncertainty since the election and that overhang continues to weigh on the markets as investors are unclear on how issues like regulatory reform, spending, and tariffs will play out.</li><li>The WTR Commercial/Contract Furniture Index was up 2.5% and the Home Goods Retailers Index was up 1.5%, while the Residential Manufacturers &amp; Suppliers Index dipped 0.4% as the broader market indexes all moved higher.</li><li>Higher volatility is expected.</li></ul>

Policy uncertainty has increased investor uncertainty since the election and that overhang continues to weigh on the markets as investors are unclear on how issues like regulatory reform, spending, and tariffs will play out.The WTR Commercial/Contract Furniture Index was up 2.5% and the Home Goods Retailers Index was up 1.5%, while the Residential Manufacturers &amp; Suppliers Index dipped 0.4% as the broader market indexes all moved higher.Higher volatility is expected.

Furniture/Furnishings Weekly - Work-From-Home Equilibria

<ul><li>Stocks continue to gain, even if only modestly, in much of the furniture and furnishings space, as the markets continue to digest the impact of the new administration’s policies.</li><li>The Water Tower Research Commercial/Contract Furniture Index was up 0.2%, the Residential Manufacturers &amp; Suppliers Index was up 0.2%, and the Home Goods Retailers Index was up 3.1%, while the large-cap indexes were up 1.7% and the R2K gained 1.5%.</li><li>Furniture imports from Mexico and Canada facing potential tariffs as Trump appears to be using tariff threat (for now) to exact concessions and policy changes from USMCA partners.</li></ul>

Stocks continue to gain, even if only modestly, in much of the furniture and furnishings space, as the markets continue to digest the impact of the new administration’s policies.The Water Tower Research Commercial/Contract Furniture Index was up 0.2%, the Residential Manufacturers &amp; Suppliers Index was up 0.2%, and the Home Goods Retailers Index was up 3.1%, while the large-cap indexes were up 1.7% and the R2K gained 1.5%.Furniture imports from Mexico and Canada facing potential tariffs as Trump appears to be using tariff threat (for now) to exact concessions and policy changes from USMCA partners.

Furniture/Furnishings Weekly -  Thinking Through Mexico and Canada Tariff Implications

<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

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 - Work-From-Home Equilibria

The WTR Commercial/Contract Furniture Index was up 2.5% and the Home Goods Retailers Index was up 1.5%, while the Residential Manufacturers &...

Water Tower Research

Furniture/Furnishings Weekly - Thinking Through Mexico and Canada Tariff Implications

Stocks continue to gain, even if only modestly, in much of the furniture and furnishings space, as the markets continue to digest the impact of the...

Water Tower Research

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

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