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

Thematic (Sector/Industry)

<ul><li>Furniture and Furnishing stocks performed well against the major market indices, where the relative calm at the level of the overall indices belied the leadership churn and rotation back into tech following the recent Fed rate cuts (1).</li><li>The Water Tower Research Commercial/Contract Furniture index (+0.5%), Residential Manufacturers &amp; Suppliers (+4.5%), and Home Goods Retailers index (+1.0%) we up all up more than the DJ30 and SP50 (both +0.3%) while the Mass Retailers index (-1.5%) and R2K (-0.2%) were both down.</li><li>In a market where technology stocks are again leading and big caps are outperforming smaller caps, the relative outperformance of the Water Tower Research indices is notable. </li></ul>

Furniture and Furnishing stocks performed well against the major market indices, where the relative calm at the level of the overall indices belied the leadership churn and rotation back into tech following the recent Fed rate cuts (1).The Water Tower Research Commercial/Contract Furniture index (+0.5%), Residential Manufacturers &amp; Suppliers (+4.5%), and Home Goods Retailers index (+1.0%) we up all up more than the DJ30 and SP50 (both +0.3%) while the Mass Retailers index (-1.5%) and R2K (-0.2%) were both down.In a market where technology stocks are again leading and big caps are outperforming smaller caps, the relative outperformance of the Water Tower Research indices is notable. 

Furniture/Furnishings Weekly - F/F Stocks Poised for a Breakout (?)

<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

<ul><li>Stocks had a tough week on growth concerns, worries that Fed rate cuts might be more gradual than previously anticipated.</li><li>The Water Tower Residential Manufacturers &amp; Suppliers Index (-3.9%) and Home Goods Retailers Index (-3.7%) outperformed the Commercial/Contract Furniture Index (-6.7%) and all three major indexes (-4.2% to -5.5%).</li><li>The Mass Retailers Index had the week’s best performance (-2.9%).</li></ul>

Stocks had a tough week on growth concerns, worries that Fed rate cuts might be more gradual than previously anticipated.The Water Tower Residential Manufacturers &amp; Suppliers Index (-3.9%) and Home Goods Retailers Index (-3.7%) outperformed the Commercial/Contract Furniture Index (-6.7%) and all three major indexes (-4.2% to -5.5%).The Mass Retailers Index had the week’s best performance (-2.9%).

Furniture/Furnishings Weekly - Industry Conditions Remain Challenged

<ul><li>Despite the spike in volatility earlier in the week, the markets were relatively calm by the end of the week, with mixed results for furniture/furnishings stocks.</li><li>The Water Tower Research Commercial/Contract Furniture Index (-0.9%), Residential Manufacturers &amp; Suppliers Index (+2.2%), and Home Goods Retailers Index (+1.3%) all lagged the two large-cap market indexes (+3.0%), which outperformed the small-cap R2K index (+2.1%).</li><li>ARHS noted weaker-than-anticipated demand at the high end. CFO Dawn Phillipson said on the 2QFY24 investor call, “We experienced softening demand comps starting in May, and the negative trend accelerated into July”, with comps now expected to be down somewhere in the negative low- to mid-teens in 2HFY24.</li></ul>

Despite the spike in volatility earlier in the week, the markets were relatively calm by the end of the week, with mixed results for furniture/furnishings stocks.The Water Tower Research Commercial/Contract Furniture Index (-0.9%), Residential Manufacturers &amp; Suppliers Index (+2.2%), and Home Goods Retailers Index (+1.3%) all lagged the two large-cap market indexes (+3.0%), which outperformed the small-cap R2K index (+2.1%).ARHS noted weaker-than-anticipated demand at the high end. CFO Dawn Phillipson said on the 2QFY24 investor call, “We experienced softening demand comps starting in May, and the negative trend accelerated into July”, with comps now expected to be down somewhere in the negative low- to mid-teens in 2HFY24.

Furniture/Furnishings Weekly - Aug 12, 2204

<ul><li>Furniture &amp; furnishings stocks retrenched broadly, in line with the broader ‘risk-off’ move that affected all major indexes.</li><li>The Water Tower Research Commercial/Contract Furniture Index declined (-3.1%), the Residential Manufacturers &amp; Suppliers Index fell (-1.6%), and the Home Goods Retailers Index declined (-7.2%).</li><li>The S&amp;P 500 and Dow 30 were both down (-2.1%), while the R2K declined (-5.8%). The Mass Retailers Index declined (-5.6%).</li></ul>

Furniture &amp; furnishings stocks retrenched broadly, in line with the broader ‘risk-off’ move that affected all major indexes.The Water Tower Research Commercial/Contract Furniture Index declined (-3.1%), the Residential Manufacturers &amp; Suppliers Index fell (-1.6%), and the Home Goods Retailers Index declined (-7.2%).The S&amp;P 500 and Dow 30 were both down (-2.1%), while the R2K declined (-5.8%). The Mass Retailers Index declined (-5.6%).

Furniture/Furnishings Weekly - Stocks Down as Market Retrenches

United States

Sleep Number Corporation designs, manufactures, and markets a line of air bed mattresses. The Company provides a variety of beds, bedding, pillows, mattress pads and layers, sheets, duvets, bed skirts, bases, furniture, bed accessories, and kids blankets. Sleep Number serves customers in the United States.

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Select Comfort (SNBR US)

Furniture/Furnishings Weekly - F/F Stocks Poised for a Breakout (?)

In a market where technology stocks are again leading and big caps are outperforming smaller caps, the relative outperformance of the Water Tower...

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

Furniture/Furnishings Weekly - Industry Conditions Remain Challenged

Stocks had a tough week on growth concerns, worries that Fed rate cuts might be more gradual than previously anticipated.

Water Tower Research

Furniture/Furnishings Weekly - Aug 12, 2204

Despite the spike in volatility earlier in the week, the markets were relatively calm by the end of the week, with mixed results for furniture...

Water Tower Research

Furniture/Furnishings Weekly - Stocks Down as Market Retrenches

Furniture & furnishings stocks retrenched broadly, in line with the broader ‘risk-off’ move that affected all major indexes.

Water Tower Research

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