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>A good week for furniture and furnishings stocks. The Water Tower Research Commercial/Contract Index (+3.5%) and Home Goods Retailers Index (+2.5%) posted strong returns relative to the market (-0.5% to +0.1%) and the Mass Retailers Index (-0.6%).</li><li>Our Residential Manufacturers &amp; Suppliers Index (-0.5%) was in line with the broader market.</li><li>The China price is now the highest in Asia. According to Science Is Strategic (citing Haver Analytics), unit labor rates in China are now ~2.5x to 4x higher than other Asian countries (see Figure 1). </li></ul>

A good week for furniture and furnishings stocks. The Water Tower Research Commercial/Contract Index (+3.5%) and Home Goods Retailers Index (+2.5%) posted strong returns relative to the market (-0.5% to +0.1%) and the Mass Retailers Index (-0.6%).Our Residential Manufacturers &amp; Suppliers Index (-0.5%) was in line with the broader market.The China price is now the highest in Asia. According to Science Is Strategic (citing Haver Analytics), unit labor rates in China are now ~2.5x to 4x higher than other Asian countries (see Figure 1). 

Furniture/Furnishings Weekly - June 3, 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 &amp; Suppliers Index (down 3.5%) and Home Goods Retailers Index (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

<ul><li>Earnings from Culp, Arhaus, and Techtronic Industries led the sector news last week.</li><li>Culp reported $60.4 million in revenue and a $1.74 million loss on the operating line.</li><li>The revenue number was in line with our expectations and up 15% Y/Y. </li></ul>

Earnings from Culp, Arhaus, and Techtronic Industries led the sector news last week.Culp reported $60.4 million in revenue and a $1.74 million loss on the operating line.The revenue number was in line with our expectations and up 15% Y/Y. 

Furniture/Furnishings Weekly - Earnings Beat Expectations, but Mostly Lower Than Last Year

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 - June 3, 2024

The Water Tower Research Commercial/Contract Index (+3.5%) and Home Goods Retailers Index (+2.5%) posted strong returns relative to the market (...

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

Furniture/Furnishings Weekly - Earnings Beat Expectations, but Mostly Lower Than Last Year

Earnings from Culp, Arhaus, and Techtronic Industries led the sector news last week. Culp reported $60.4 million in revenue and a $1.74 million...

Water Tower Research

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