On Tuesday, a leading investment firm reported a positive outlook for several mattress and furniture retailers following the Black Friday sales weekend. Preliminary checks indicated that sales for these items experienced a mid-single-digit (MSD) year-over-year growth.
Among the key players, Wayfair Inc . (NYSE:W), with its substantial $6 billion market capitalization, has shown strong momentum with a 6.14% gain in the past week, according to InvestingPro data. The firm's webinar with mattress retailers on Monday supported these findings, showing high-single-digit (HSD) percentage increases, although offline feedback suggested that sales at some larger retailers were roughly flat compared to the previous year.
The firm's analysis concluded with a mid-single-digit percentage increase in sales for the Black Friday weekend. Notably, this trend extended to furniture sales, which also saw a similar growth rate. Retailers expressed that November, following the election, marked a significant improvement from previous months. They are anticipating this positive trajectory to carry into December and January.
The investment firm now holds an upside bias to fourth-quarter estimates for Tempur Sealy International (NYSE:NYSE:TPX), Wayfair Inc. (NYSE:W), and Arhaus, Inc. (NASDAQ:ARHS). These companies, all rated overweight, are expected to take more market share, despite having previously guided for weak trends to continue into the fourth quarter.
InvestingPro analysis reveals that Wayfair's analyst consensus remains cautiously optimistic, with price targets ranging from $40 to $100, though 26 analysts have recently revised their earnings expectations downward. The company maintains a Fair financial health score, supported by $11.84 billion in trailing twelve-month revenue.
Retailers highlighted strong performances from Tempur Sealy International's Tempur Adapt line and Serta Simmons Bedding's Serta Perfect Sleeper and Simmons Beautyrest Black. Additionally, an improved product offering from Serta Simmons Bedding, particularly the Serta iComfort and other mentioned lines, was acknowledged during the firm's webinar.
Looking ahead, with Tempur Sealy International planning to relaunch its Sealy brand in 2025, retailers are keen to observe how the competition for retail floor space will unfold between Tempur Sealy and Serta Simmons Bedding in the coming year. For investors seeking deeper insights, InvestingPro offers comprehensive analysis through its Pro Research Report, available for Wayfair and 1,400+ other US stocks, providing essential metrics and expert analysis for informed investment decisions.
In other recent news, Wayfair has seen a series of adjustments from financial analysts following its third-quarter earnings report. The company reported a 2% year-over-year decrease in net revenue and a 6.1% drop in orders, offset by a 4.4% increase in average order value. Wayfair ended the quarter with $1.3 billion in cash and equivalents, and an adjusted EBITDA of $119 million.
KeyBanc Capital Markets maintained its Sector Weight rating on Wayfair, acknowledging the company's ability to improve EBITDA and capture market share even as the industry faces headwinds. Mizuho (NYSE:MFG), Citi, and Deutsche Bank (ETR:DBKGn) all reduced their price targets for Wayfair, citing mixed guidance for the fourth quarter and potential drops in adjusted EBITDA.
On the retail front, KeyBanc analysts reported mixed spending trends following Black Friday. The analysis highlighted a 3.3% decline in the All Retail category for the week ending November 24, marking a deceleration from the previous week's 0.5% decline.
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