As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the home furnishing and improvement retail industry, including Lowe's (NYSE: LOW) and its peers.

Home furnishing and improvement retailers understand that ‘home is where the heart is’ but that a home is only right when it’s in livable condition and furnished just right. These stores therefore focus on providing what is needed for both the upkeep of a house as well as what is desired for the aesthetics of a home. Decades ago, it was thought that furniture and home improvement would resist e-commerce because of the logistical challenges of shipping a sofa or lawn mower, but now you can buy both online; so just like other retailers, these stores need to adapt to new realities and consumer behaviors.

The 7 home furnishing and improvement retail stocks we track reported a slower Q3. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.

Luckily, home furnishing and improvement retail stocks have performed well with share prices up 12.3% on average since the latest earnings results.

Best Q3: Lowe's (NYSE: LOW)

Founded in North Carolina as Lowe's North Wilkesboro Hardware, the company is a home improvement retailer that sells everything from paint to tools to building materials.

Lowe's reported revenues of $20.81 billion, up 3.2% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with full-year revenue guidance exceeding analysts’ expectations and a decent beat of analysts’ gross margin estimates.

"The company delivered another quarter of positive comp sales, and we're pleased to start November with positive comps as well, despite headwinds related to hurricane activity in the prior year. With the closing of the FBM acquisition last month, we look forward to enhancing our offering to Pro customers and creating more sustainable, long-term sales and profit expansion for the company," said Marvin R. Ellison, Lowe's chairman, president and CEO.

Lowe's delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 12.3% since reporting and currently trades at $246.47.

Is now the time to buy Lowe's? Access our full analysis of the earnings results here, it’s free for active Edge members.

Williams-Sonoma (NYSE: WSM)

Started in 1956 as a store specializing in French cookware, Williams-Sonoma (NYSE: WSM) is a specialty retailer of higher-end kitchenware, home goods, and furniture.

Williams-Sonoma reported revenues of $1.88 billion, up 4.6% year on year, outperforming analysts’ expectations by 0.6%. The business had a strong quarter with a solid beat of analysts’ gross margin estimates and a decent beat of analysts’ EBITDA estimates.

The market seems content with the results as the stock is up 2.7% since reporting. It currently trades at $185.58.

Is now the time to buy Williams-Sonoma? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Sleep Number (NASDAQ: SNBR)

Known for mattresses that can be adjusted with regards to firmness, Sleep Number (NASDAQ: SNBR) manufactures and sells its own brand of bedding products such as mattresses, bed frames, and pillows.

Sleep Number reported revenues of $342.9 million, down 19.6% year on year, falling short of analysts’ expectations by 5.4%. It was a disappointing quarter as it posted full-year EBITDA guidance missing analysts’ expectations and a significant miss of analysts’ revenue estimates.

Sleep Number delivered the highest full-year guidance raise but had the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 54.5% since the results and currently trades at $8.50.

Read our full analysis of Sleep Number’s results here.

RH (NYSE: RH)

Formerly known as Restoration Hardware, RH (NYSE: RH) is a specialty retailer that exclusively sells its own brand of high-end furniture and home decor.

RH reported revenues of $883.8 million, up 8.9% year on year. This print was in line with analysts’ expectations. However, it was a softer quarter as it recorded a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.

RH delivered the fastest revenue growth among its peers. The stock is up 9.2% since reporting and currently trades at $166.79.

Read our full, actionable report on RH here, it’s free for active Edge members.

Floor And Decor (NYSE: FND)

Operating large, warehouse-style stores, Floor & Decor (NYSE: FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.

Floor And Decor reported revenues of $1.18 billion, up 5.5% year on year. This result met analysts’ expectations. More broadly, it was a satisfactory quarter as it also recorded a beat of analysts’ EPS estimates but full-year revenue guidance meeting analysts’ expectations.

The stock is down 6.2% since reporting and currently trades at $61.00.

Read our full, actionable report on Floor And Decor here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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