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.

Equity Research Firm

Equity Bottom-Up

<div><ul><li>MLKN reported 2QFY26 ongoing EPS of $0.43 versus $0.55 in 2QFY25, down 21.8%, but above FactSet consensus of $0.41, which was also our estimate.</li><li>Sales handily beat expectations once again, coming in at $955.2MM versus $970.4MM in 2QFY25, down 1.2%, but above our estimate of $941.5MM and the FactSet range of $941-947MM, although within management’s wide range of $926-966MM given last quarter.</li><li>North America contract sales declined 3.1% to $508MM, above our $498.5MM estimate, while Global Retail increased 4.7% to $275.8MM, above our $269.9MM estimate.</li></ul></div>

MLKN reported 2QFY26 ongoing EPS of $0.43 versus $0.55 in 2QFY25, down 21.8%, but above FactSet consensus of $0.41, which was also our estimate.Sales handily beat expectations once again, coming in at $955.2MM versus $970.4MM in 2QFY25, down 1.2%, but above our estimate of $941.5MM and the FactSet range of $941-947MM, although within management’s wide range of $926-966MM given last quarter.North America contract sales declined 3.1% to $508MM, above our $498.5MM estimate, while Global Retail increased 4.7% to $275.8MM, above our $269.9MM estimate.

MLKN: Another Top-Line-Driven Beat; Raising Estimates

Thematic (Sector/Industry)

<ul><li>Last week, the administration announced that it was delaying the planned January 6, 2026, tariff increases on upholstered furniture, cabinets, and vanities, while keeping the current 25% duties in place.</li><li>Tariff “relief,” not tariff “removal”. The administration’s decision to postpone the scheduled January 2026 increase in furniture-related tariffs by one year (to January 2027) avoids a near-term step-up in duties but leaves the current 25% tariff regime fully intact.</li><li>For the furniture industry, this is a timing benefit rather than a structural change in cost pressure.</li></ul>

Last week, the administration announced that it was delaying the planned January 6, 2026, tariff increases on upholstered furniture, cabinets, and vanities, while keeping the current 25% duties in place.Tariff “relief,” not tariff “removal”. The administration’s decision to postpone the scheduled January 2026 increase in furniture-related tariffs by one year (to January 2027) avoids a near-term step-up in duties but leaves the current 25% tariff regime fully intact.For the furniture industry, this is a timing benefit rather than a structural change in cost pressure.

Consumer Hardlines : Tariff Delays a Modest Positive; No Changes to Estimates

Market Intelligence, ORTEX

ORTEX Market Intel

Market Intelligence

Global Financial Data and Analytics Platform

ORTEX

ORTEX is a global financial data and analytics platform providing real-time securities lending and short interest data, index rebalance data, holdings and insider transactions, trading signals, corporate actions and news,  stock machine learning and factor scores and other analytics. The majority of the data are downloadable and accessible through APIs.

Equity Derivatives

<ul><li>Bullish call positioning defined the week of September 21.</li><li>Extreme low put-call ratios hit several names across autos, utilities, and financials.</li><li>Yet bearish hedging surged in equal measure elsewhere - earnings-linked put buying and sector-level stress signals kept the week far from one-directional.</li></ul>

Bullish call positioning defined the week of September 21.Extreme low put-call ratios hit several names across autos, utilities, and financials.Yet bearish hedging surged in equal measure elsewhere - earnings-linked put buying and sector-level stress signals kept the week far from one-directional.

Options Weekly: Calls Dominate, but Pockets of Fear Emerge

<div><ul><li>We spoke with CEO Iv Culp from Culp, Inc. (CULP) and Tiffany Hinkle, AVP IR with Haverty Furniture (HVT), two companies with excellent insight into the US home furnishings market.</li><li>The home furnishings sector is exhibiting cautious optimism after three to four years of defensive positioning.</li><li>Following pandemic-driven demand spikes and subsequent pull-forward effects, companies experienced an unusually severe downcycle requiring extensive cost restructuring.</li></ul></div>

We spoke with CEO Iv Culp from Culp, Inc. (CULP) and Tiffany Hinkle, AVP IR with Haverty Furniture (HVT), two companies with excellent insight into the US home furnishings market.The home furnishings sector is exhibiting cautious optimism after three to four years of defensive positioning.Following pandemic-driven demand spikes and subsequent pull-forward effects, companies experienced an unusually severe downcycle requiring extensive cost restructuring.

Beyond Tariffs - How Leading Furniture Companies Are Positioning for the Next Upcycle

<ul><li>As smaller-cap stocks outperformed, the Water Tower Furniture and Furnishings indexes posted strong gains.</li><li>The Water Tower Research Commercial/Contract Manufacturers Index (+3.5%), Residential Manufacturers &amp; Suppliers Index (+3.8%), Home Goods Retailers Index (+10%), and Mass Retailers Index (+5.3%) outperformed the S&amp;P 500 and DJ30 (both +2.8%). The R2K was up (+4.0%).</li><li>RH and LOVE earnings calls shine additional light on tough industry conditions.</li></ul>

As smaller-cap stocks outperformed, the Water Tower Furniture and Furnishings indexes posted strong gains.The Water Tower Research Commercial/Contract Manufacturers Index (+3.5%), Residential Manufacturers &amp; Suppliers Index (+3.8%), Home Goods Retailers Index (+10%), and Mass Retailers Index (+5.3%) outperformed the S&amp;P 500 and DJ30 (both +2.8%). The R2K was up (+4.0%).RH and LOVE earnings calls shine additional light on tough industry conditions.

Furniture/Furnishings Weekly  - September 16, 2024

United States

MillerKnoll, Inc. researches, designs, manufactures, and distributes interior office furnishings, furniture systems, products, and services. The Company markets its products to companies, organizations, and individuals worldwide.

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MillerKnoll (MLKN US)

MLKN: Another Top-Line-Driven Beat; Raising Estimates

MLKN reported 2QFY26 ongoing EPS of $0.43 versus $0.55 in 2QFY25, down 21.8%, but above FactSet consensus of $0.41, which was also our estimate

Water Tower Research

Consumer Hardlines : Tariff Delays a Modest Positive; No Changes to Estimates

Last week, the administration announced that it was delaying the planned January 6, 2026, tariff increases on upholstered furniture, cabinets, and...

Water Tower Research

Options Weekly: Calls Dominate, but Pockets of Fear Emerge

Bullish call positioning defined the week of September 21. Extreme low put-call ratios hit several names across autos, utilities, and...

ORTEX Market Intel

Beyond Tariffs - How Leading Furniture Companies Are Positioning for the Next Upcycle

We spoke with CEO Iv Culp from Culp, Inc. (CULP) and Tiffany Hinkle, AVP IR with Haverty Furniture (HVT), two companies with excellent insight into...

Water Tower Research

Furniture/Furnishings Weekly - September 16, 2024

RH’s upcoming push into the European fashion capitals of Milan, Paris, and London, and continued reimaging of its US retail footprint, could be the...

Water Tower Research

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