TThe housing sector has been at a high level over the past year, with sales surging in the face of skyrocketing demand. The surge in sales came despite rising raw material and labor costs. This is due to the increasing demand as people are willing to shell out more.
This boom is not only helping the housing market, but is also proving to be beneficial for industries such as home furnishings and furnishings.
The domestic market continues to grow
Higher prices for lumber and raw materials and rising labor costs were concerns. However, these have not had much impact on the demand for new housing. Mortgage rates have also gone up this year, but people are still willing to pay more. This has led to skyrocketing sales and an increase in homebuilder confidence.
The Commerce Department said on Oct. 26 that sales of new single-family homes jumped 14% to a seasonally adjusted annual rate of 800,000 units in September. In addition, sales of existing homes rose 7% in September to an eight-month high, according to the National Association of Realtors.
Homebuilder confidence rose 4 points to 80 from 76 in September, according to the National Association of Home Builders / Wells Fargo Housing Market Index.
Home Sales Furniture Sales, Furniture Sales
The increased demand for new housing is not only helping the home construction industry, but also boosting sales of furniture and home furnishings. This made the furniture and furnishings industries the direct beneficiaries of the real estate boom.
Given this scenario, the demand for home furnishings is expected to increase over the coming months. According to the latest report from the National Retail Federation, sales at furniture and home furnishings stores were up 0.2% month-over-month in September and 13.7% on a year-over-year basis. year to year.
Additionally, according to the Census Bureau, retail sales rose 0.7% in September, beating analysts’ expectations of a 0.2% drop. In addition, the approach of the end of the year holidays should stimulate sales of furniture and furnishings.
The culture of working and learning from home due to the pandemic has boosted the furniture and furnishings industries as consumers invest more in home improvement projects. This is also expected to continue in the future with no signs of the pandemic ebbing.
Actions to watch
In such a scenario, we suggest four stocks from the furniture and home furnishings industries that have strong growth potential and have seen strong revisions to earnings estimates over the past 30 days.
Ethan Allen Interiors Inc. ETD is a leading interior design company and manufacturer and retailer of quality home furniture. in the United States and abroad.
The company’s expected profit growth rate for the current year is 30.8%. Zacks’ consensus estimate for current year earnings has improved 16.1% over the past 60 days, with Ethan Allen sporting a Zacks # 1 rank (strong buy). The full list of today’s Zacks # 1 Rank stocks here.
Tempur Sealy International TPX is involved in the development, manufacture and marketing of bedding products primarily in North America and internationally. It provides mattresses, adjustable box springs, pillows. and other sleep and relaxation products.
The company’s expected profit growth rate for the current year is 71.2%. Zacks’ consensus estimate for current year earnings has improved 1.2% in the past 60 days. Tempur Sealy has a Zacks Rank # 2 (Buy).
HR RH is one of the leading luxury retailers in the home furnishings business. The company offers dominant merchandise assortments in a growing number of categories, including furniture, lighting, textiles, bath amenities, home decor, outdoor and garden, tableware and furniture for children and teens. .
The company’s expected profit growth rate for the current year is 45.3%. Zacks’ consensus estimate for current year earnings has improved 14% in the past 60 days. RH wears a Zacks Rank # 1.
LaZBoy LZB is one of the world’s leading manufacturers of residential furniture, marketing furniture for every room in the house. The La-Z-Boy Upholstery segment includes La-Z-Boy and England. The Casegoods segment consists of three brands: American Drew, Hammary and Kincaid.
The company’s expected profit growth rate for the current year is 28.2%. Its shares have gained 7.4% in the past three months. LaZBoy has a Zacks Rank # 3 (Hold).
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Tempur Sealy International, Inc. (TPX): Free Stock Analysis Report
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Ethan Allen Interiors Inc. (ETD): Free Stock Analysis Report
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