Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Equity Bottom-Up

<div><div><div><div><ul style="list-style-type: disc;"><li><p>Ahead of the HNI’s 2QFY23 earnings report on Tuesday, August 8, we are only adjusting our estimates for 2QFY23.</p></li><li><p>HNI completed its acquisition of Kimball International on June 1.</p></li><li><p>Our revised 2QFY23 estimate relies on our in-place HNI estimate plus an interpolation of our KBAL estimates for the time owned by HNI (the closing occurred after two months had passed).</p></li></ul></div></div></div></div>

Ahead of the HNI’s 2QFY23 earnings report on Tuesday, August 8, we are only adjusting our estimates for 2QFY23.HNI completed its acquisition of Kimball International on June 1.Our revised 2QFY23 estimate relies on our in-place HNI estimate plus an interpolation of our KBAL estimates for the time owned by HNI (the closing occurred after two months had passed).

HNI Corporation - 2Q Preview: Adjusting 2QFY23 Estimate for Kimball Closing

Thematic (Sector/Industry)

<ul><li>Residential furniture stocks had a tough week over concerns about demand, though commercial furniture stocks fared better.</li><li>The Water Tower Research Commercial/Contract Furniture Index declined 0.5%, the Residential Manufacturers &amp; Suppliers Index fell 3.2%, and Home Goods Retailers declined 5.7%.</li><li>All three trailed the broader indexes (+0.2 to +0.5%) and the Mass Retailers Index (+1.7%). </li></ul>

Residential furniture stocks had a tough week over concerns about demand, though commercial furniture stocks fared better.The Water Tower Research Commercial/Contract Furniture Index declined 0.5%, the Residential Manufacturers &amp; Suppliers Index fell 3.2%, and Home Goods Retailers declined 5.7%.All three trailed the broader indexes (+0.2 to +0.5%) and the Mass Retailers Index (+1.7%). 

Furniture/Furnishings Weekly - July 1, 2024

<ul><li>SCS and LZB both reported strong earnings. Steelcase gained 7.2% for the week after posting strong orders and margins in 1QFY25 with adjusted EPS of $0.16, beating consensus of $0.10 and our estimate of $0.11. LZB surged 12.4% after posting adjusted 4QFY24 EPS of $0.95 versus consensus of $0.70.</li><li>It was a mixed week for the Water Tower Research Furniture/Furnishings indexes.</li><li>The Commercial/Contract Furniture Index was up 3.3% for the week, while the Residential Manufacturers &amp; Suppliers Index was down 1.1% and the Home Goods Retailers Index was down 1.2%. </li></ul>

SCS and LZB both reported strong earnings. Steelcase gained 7.2% for the week after posting strong orders and margins in 1QFY25 with adjusted EPS of $0.16, beating consensus of $0.10 and our estimate of $0.11. LZB surged 12.4% after posting adjusted 4QFY24 EPS of $0.95 versus consensus of $0.70.It was a mixed week for the Water Tower Research Furniture/Furnishings indexes.The Commercial/Contract Furniture Index was up 3.3% for the week, while the Residential Manufacturers &amp; Suppliers Index was down 1.1% and the Home Goods Retailers Index was down 1.2%. 

Furniture/Furnishings Weekly - June 24, 2024

<ul><li>The DJ30 closed above 40,000 for the first time ever.</li><li>Our Commercial/Contract Furniture Index (+2.3%) outperformed the broader market indexes (all three up +1.6%) and our Mass Retailers Index (+0.6%) last week.</li><li>Residential Manufacturers &amp; Suppliers (-3.8%) and Home Goods Retailers (-2.8%) trailed.</li></ul>

The DJ30 closed above 40,000 for the first time ever.Our Commercial/Contract Furniture Index (+2.3%) outperformed the broader market indexes (all three up +1.6%) and our Mass Retailers Index (+0.6%) last week.Residential Manufacturers &amp; Suppliers (-3.8%) and Home Goods Retailers (-2.8%) trailed.

Furniture/Furnishings Weekly - May 20, 2024

<ul><li>Furniture and furnishing stocks performed well last week. All three of the WTR indexes outperformed the broader market, led by Residential Manufacturers &amp; Suppliers (+3.3%), Commercial/Contract Furniture (+3.2%) and Home Goods Retailers (+2.7%), which outperformed the broader markets (- 0.1% to +0.8%) and the Mass Retailers Index (+0.1%).</li><li>Mattress demand remains weak. Tempur Sealy International (TPX) CEO Scott Thompson noted in his 1Q24 remarks, “You’d have to say the bedding industry is in a depression and has been in one for a number of quarters” , with demand down an estimated 15% industry-wide in the first three months of the year.</li><li>For TPX, <span style="font-size: var(--content-font-size);">sequentially, demand was weakest in January and improved </span>(though erratically) through April, where it was ‘flattish’. Higher- end price points were a bright spot.</li></ul>

Furniture and furnishing stocks performed well last week. All three of the WTR indexes outperformed the broader market, led by Residential Manufacturers &amp; Suppliers (+3.3%), Commercial/Contract Furniture (+3.2%) and Home Goods Retailers (+2.7%), which outperformed the broader markets (- 0.1% to +0.8%) and the Mass Retailers Index (+0.1%).Mattress demand remains weak. Tempur Sealy International (TPX) CEO Scott Thompson noted in his 1Q24 remarks, “You’d have to say the bedding industry is in a depression and has been in one for a number of quarters” , with demand down an estimated 15% industry-wide in the first three months of the year.For TPX, sequentially, demand was weakest in January and improved (though erratically) through April, where it was ‘flattish’. Higher- end price points were a bright spot.

Furniture/Furnishings Weekly - May 13, 2024

United States

HNI Corporation manufactures and markets office furniture as well as hearth products. The Company's products are sold primarily through dealers, wholesalers, and retail superstores. HNI has operations in the United States and Canada.

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HNI Corp (HNI US)

HNI Corporation - 2Q Preview: Adjusting 2QFY23 Estimate for Kimball Closing

Ahead of the HNI’s 2QFY23 earnings report on Tuesday, August 8, we are only adjusting our estimates for 2QFY23. HNI completed its acquisition of...

Water Tower Research

Furniture/Furnishings Weekly - July 1, 2024

Residential furniture stocks had a tough week over concerns about demand, though commercial furniture stocks fared better.

Water Tower Research

Furniture/Furnishings Weekly - June 24, 2024

SCS and LZB both reported strong earnings. Steelcase gained 7.2% for the week after posting strong orders and margins in 1QFY25 with adjusted EPS...

Water Tower Research

Furniture/Furnishings Weekly - May 20, 2024

Our Commercial/Contract Furniture Index (+2.3%) outperformed the broader market indexes (all three up +1.6%) and our Mass Retailers Index (+0.6%)...

Water Tower Research

Furniture/Furnishings Weekly - May 13, 2024

Furniture and furnishing stocks performed well last week. All three of the WTR indexes outperformed the broader market, led by Residential...

Water Tower Research

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