Wayfair stock faces pressure as Raymond James warns of tariff impact

Investing.com - Raymond James has issued a cautionary note regarding potential furniture tariffs that could negatively impact Wayfair (NYSE:W) and other furniture retailers, as the sector faces evolving market dynamics.

The investment firm specifically warned that "any incremental tariffs could put some negative pressure on the take rate Wayfair has on what is sold," highlighting the company’s vulnerability despite its marketplace model. As of 2019, approximately 60% of Wayfair’s goods were manufactured in China and 80% in Asia overall, though these percentages may have decreased somewhat since then. For deeper insights into how tariffs might affect furniture retailers, InvestingPro subscribers can access comprehensive analysis and financial health scores for companies in this sector.

Raymond James noted that the U.S. furniture industry remains heavily dependent on global production and sourcing, particularly from Asia and Europe. The analysis emphasized that U.S. furniture infrastructure could not support rapid onshoring of production, given decades of reliance on foreign manufacturing that began accelerating in the early 2000s.

The firm compared Wayfair’s exposure to other furniture retailers, noting varying levels of domestic production. Arhaus (NASDAQ:ARHS), currently trading at a P/E ratio of 22.4 and showing strong YTD returns of 32%, sources approximately 60% from vendors outside North America. According to InvestingPro data, Arhaus maintains a GOOD financial health score and has received upward earnings revisions from 9 analysts for the upcoming period. La-Z-Boy (NYSE:LZB) conducts final assembly mostly in the U.S. but sources casegoods from Asia. RH (NYSE:RH) sourced 72% of its products from Asia in fiscal 2024.

Raymond James expects that any additional tariffs would likely be passed through to consumers, potentially further hindering demand recovery in an already sluggish housing environment with stretched consumer spending trends.

In other recent news, Arhaus Inc reported impressive financial results for the second quarter of 2025, surpassing earnings expectations. The company achieved an earnings per share (EPS) of $0.28, significantly higher than the forecasted $0.15, and reported revenue of $358 million, exceeding the anticipated $333.46 million. Guggenheim responded to these results by raising its price target for Arhaus to $14, maintaining a Buy rating, and noted that the company’s performance overcame a substantial tariff-related headwind. Piper Sandler also increased its price target to $11, citing the positive impact of bringing operations for the Dallas distribution center in-house.

Telsey Advisory Group raised its price target to $12, highlighting Arhaus’s increased brand awareness due to a 30% rise in showroom count over the last three years. The firm also maintained a Market Perform rating, emphasizing the company’s strong product assortment and showroom experience. These recent developments reflect a positive outlook from analysts, with Guggenheim, Piper Sandler, and Telsey Advisory Group all adjusting their price targets upward.

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