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.

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Thematic (Sector/Industry)

<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/furnishings stocks trailed the broader market.</li><li>The Water Tower Research Commercial/Contract Index (-1.7%), Residential Manufacturers &amp; Suppliers Index (-2.0%), and Home Goods Retailers Index (-2.0%) trailed the broader market indexes and the Mass Retailers Index (-1.3% to +1.3%) last week.</li><li>LOVE 1Q25 paints a picture of continued weakness in residential furniture even as the company appears to be continuing to gain share. </li></ul>

Furniture/furnishings stocks trailed the broader market.The Water Tower Research Commercial/Contract Index (-1.7%), Residential Manufacturers &amp; Suppliers Index (-2.0%), and Home Goods Retailers Index (-2.0%) trailed the broader market indexes and the Mass Retailers Index (-1.3% to +1.3%) last week.LOVE 1Q25 paints a picture of continued weakness in residential furniture even as the company appears to be continuing to gain share. 

INDUSTRY REPORT - Furniture/Furnishings Weekly

<ul><li>A rough week for smaller-cap stocks without AI exposure.</li><li>The WTR Commercial/Contract Furniture Index (-6.9%), Residential Manufacturers &amp; Suppliers Index (-1.4%), and Home Goods Retailers Index (-1.3%) underperformed the Dow (+1.2%), S&amp;P 500 (+1.2%), and Mass Retailers Index (+1.9%), all of which benefited from the growing AI hype this week.</li><li>This performance seems to be partly due to the overall weakness of small caps, with the Russell 2000 clocking in (-1.7%).</li></ul>

A rough week for smaller-cap stocks without AI exposure.The WTR Commercial/Contract Furniture Index (-6.9%), Residential Manufacturers &amp; Suppliers Index (-1.4%), and Home Goods Retailers Index (-1.3%) underperformed the Dow (+1.2%), S&amp;P 500 (+1.2%), and Mass Retailers Index (+1.9%), all of which benefited from the growing AI hype this week.This performance seems to be partly due to the overall weakness of small caps, with the Russell 2000 clocking in (-1.7%).

Furniture/Furnishings Weekly - June 10, 2024

<ul><li>A good week for furniture and furnishings stocks. The Water Tower Research Commercial/Contract Index (+3.5%) and Home Goods Retailers Index (+2.5%) posted strong returns relative to the market (-0.5% to +0.1%) and the Mass Retailers Index (-0.6%).</li><li>Our Residential Manufacturers &amp; Suppliers Index (-0.5%) was in line with the broader market.</li><li>The China price is now the highest in Asia. According to Science Is Strategic (citing Haver Analytics), unit labor rates in China are now ~2.5x to 4x higher than other Asian countries (see Figure 1). </li></ul>

A good week for furniture and furnishings stocks. The Water Tower Research Commercial/Contract Index (+3.5%) and Home Goods Retailers Index (+2.5%) posted strong returns relative to the market (-0.5% to +0.1%) and the Mass Retailers Index (-0.6%).Our Residential Manufacturers &amp; Suppliers Index (-0.5%) was in line with the broader market.The China price is now the highest in Asia. According to Science Is Strategic (citing Haver Analytics), unit labor rates in China are now ~2.5x to 4x higher than other Asian countries (see Figure 1). 

Furniture/Furnishings Weekly - June 3, 2024

<ul><li>Residential furniture and home goods retailer issues performed well last week versus the market, while the Commercial/Contract Furniture stocks, by and large, tread water.</li><li>Our Residential Manufacturers &amp; Suppliers index advanced 3.2%, outperforming the broader market indexes (up between 1.6 to 1.8%), while our Home Goods Retailers and Mass Retailers indexes each grew by 0.7%.</li><li>Only our Commercial/Contract Furniture Index lagged, down 0.3%.</li></ul>

Residential furniture and home goods retailer issues performed well last week versus the market, while the Commercial/Contract Furniture stocks, by and large, tread water.Our Residential Manufacturers &amp; Suppliers index advanced 3.2%, outperforming the broader market indexes (up between 1.6 to 1.8%), while our Home Goods Retailers and Mass Retailers indexes each grew by 0.7%.Only our Commercial/Contract Furniture Index lagged, down 0.3%.

Furniture/Furnishings Weekly - Weak Bedding, Furniture Demand

United States

Sleep Number Corporation designs, manufactures, and markets a line of air bed mattresses. The Company provides a variety of beds, bedding, pillows, mattress pads and layers, sheets, duvets, bed skirts, bases, furniture, bed accessories, and kids blankets. Sleep Number serves customers in the United States.

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Select Comfort (SNBR US)

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

INDUSTRY REPORT - Furniture/Furnishings Weekly

The Water Tower Research Commercial/Contract Index (-1.7%), Residential Manufacturers & Suppliers Index (-2.0%), and Home Goods Retailers Index (...

Water Tower Research

Furniture/Furnishings Weekly - June 10, 2024

The WTR Commercial/Contract Furniture Index (-6.9%), Residential Manufacturers & Suppliers Index (-1.4%), and Home Goods Retailers Index (-1.3%)...

Water Tower Research

Furniture/Furnishings Weekly - June 3, 2024

The Water Tower Research Commercial/Contract Index (+3.5%) and Home Goods Retailers Index (+2.5%) posted strong returns relative to the market (...

Water Tower Research

Furniture/Furnishings Weekly - Weak Bedding, Furniture Demand

Residential furniture and home goods retailer issues performed well last week versus the market, while the Commercial/Contract Furniture stocks, by...

Water Tower Research

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