Unpacking Q3 Earnings: Purple (NASDAQ:PRPL) In The Context Of Other Home Furnishings Stocks

Looking back on home furnishings stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Purple (NASDAQ:PRPL) and its peers.

A healthy housing market is good for furniture demand as more consumers are buying, renting, moving, and renovating. On the other hand, periods of economic weakness or high interest rates discourage home sales and can squelch demand. In addition, home furnishing companies must contend with shifting consumer preferences such as the growing propensity to buy goods online, including big things like mattresses and sofas that were once thought to be immune from e-commerce competition.

The 6 home furnishings stocks we track reported a mixed Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.8% above.

Luckily, home furnishings stocks have performed well with share prices up 13.3% on average since the latest earnings results.

Purple (NASDAQ:PRPL)

Founded by two brothers, Purple (NASDAQ:PRPL) creates sleep and home comfort products such as mattresses, pillows, and bedding accessories.

Purple reported revenues of $118.8 million, flat year on year. This print fell short of analysts’ expectations by 3.6%, but it was still a strong quarter for the company with an impressive beat of analysts’ EBITDA and EPS estimates.

"Our third quarter results reflect the continued progress we're making in strengthening Purple's foundation and positioning the company for sustainable, profitable growth," said Rob DeMartini, CEO of Purple Innovation.

Purple achieved the highest full-year guidance raise but had the weakest performance against analyst estimates of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 2.1% since reporting and currently trades at $0.80.

Is now the time to buy Purple? Access our full analysis of the earnings results here, it’s free.

Best Q3: La-Z-Boy (NYSE:LZB)

The prized possession of every mancave, La-Z-Boy (NYSE:LZB) is a furniture company specializing in recliners, sofas, and seats.

La-Z-Boy reported revenues of $522.5 million, flat year on year, outperforming analysts’ expectations by 1.2%. The business had an exceptional quarter with a beat of analysts’ EPS and adjusted operating income estimates.

The market seems happy with the results as the stock is up 28% since reporting. It currently trades at $37.96.

Is now the time to buy La-Z-Boy? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Lovesac (NASDAQ:LOVE)

Known for its oversized, premium beanbags, Lovesac (NASDAQ:LOVE) is a specialty furniture brand selling modular furniture.

Lovesac reported revenues of $150.2 million, flat year on year, falling short of analysts’ expectations by 2.5%. It was a softer quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly and full-year revenue guidance missing analysts’ expectations.

Interestingly, the stock is up 11.2% since the results and currently trades at $15.27.

Read our full analysis of Lovesac’s results here.

Leggett & Platt (NYSE:LEG)

Founded in 1883, Leggett & Platt (NYSE:LEG) is a diversified manufacturer of products and components for various industries.

Leggett & Platt reported revenues of $1.04 billion, down 5.9% year on year. This result surpassed analysts’ expectations by 1.1%. Aside from that, it was a mixed quarter as it also produced a decent beat of analysts’ adjusted operating income estimates but a miss of analysts’ Bedding revenue estimates.

Leggett & Platt had the slowest revenue growth and weakest full-year guidance update among its peers. The stock is up 34.9% since reporting and currently trades at $12.39.

Read our full, actionable report on Leggett & Platt here, it’s free.

Somnigroup (NYSE:SGI)

Established through the merger of Tempur-Pedic and Sealy in 2012, Somnigroup (NYSE:SGI) is a bedding manufacturer known for its innovative memory foam mattresses and sleep products

Somnigroup reported revenues of $2.12 billion, up 63.3% year on year. This print topped analysts’ expectations by 3%. It was a strong quarter as it also put up a solid beat of analysts’ Direct revenue estimates and full-year EPS guidance topping analysts’ expectations.

Somnigroup achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 15.1% since reporting and currently trades at $91.58.

Read our full, actionable report on Somnigroup here, it’s free.

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