US Home furnishings retailers continue to grapple with a sluggish market in the wake of the pandemic, exacerbated by a downturn in home sales and rising mortgage rates. Major players across the spectrum, from upscale brands like RH and Williams-Sonoma to online giants like Wayfair and traditional home improvement stores like Home Depot and Lowe's, have reported declines in first-quarter sales.
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RH, formerly Restoration Hardware, reported a 1.7% drop in net revenue to $727 million, attributing it to what CEO Gary Friedman described as the most challenging housing market in decades. Wayfair reported a 1.6% decrease in net revenue despite cost-cutting measures, while Home Depot's net sales fell by 2.3% annually to $36.4 billion due to reduced demand for larger discretionary projects like kitchen remodels.
Lowe's, the second-largest home improvement chain, reported a 4.4% decline to $21.4 billion in net sales, reflecting decreased spending on DIY and big-ticket items.
CFOs across these companies noted a lack of consumer engagement in home improvement projects, citing affordability challenges and historically low housing turnover rates as contributing factors.
The broader economic backdrop is equally challenging, with furniture and home furnishings sales plummeting by 6.8% year-over-year in May, the sharpest decline among all retail sectors analyzed. Overall, the furniture and home furnishings sector in the U.S. is estimated to have generated $53 billion in sales during the first five months of 2024, marking a 7.9% decline from the previous year.
Source: www.forbes.com