Motley Furniture News

The furniture industry is starting to take on the look of a college dorm room. Earnings reports and earnings warnings are crammed in from every angle, but without a whole lot of feng shui. Here's a quick rundown of the last few days' worth of news -- in chronological order, so that there will be at least some order.
Bed Bath & BeyondLast week, home furnishings star Bed Bath & Beyond (Nasdaq: BBBY) issued its first-ever earnings warning. Deflating the Street's expectations of $0.39 per share, management warned that it will earn at most $0.38 this quarter -- missing by the proverbial penny. Bed Bath believes its same-store sales will grow just 1.6% -- less than half the minimum growth that Wall Street was expecting.
Haverty FurnitureThe same day as Bed Bath issued its earnings warning, furniture retailer Haverty (NYSE: HVT) advised that its own May sales were down 14%, and comps down 15.5%.
Hooker FurnitureAs I described on Monday, Hooker Furniture's (Nasdaq: HOFT) fiscal Q1 2008 report was a mess. Sales down 15%. Profits down 33%.
NatuzziOn Tuesday, Santeramo-based sofa-maker Natuzzi (NYSE: NTZ) reported not a disaster, but measures being taken to ward one off. Citing "challenging business conditions" and "adverse currency trend that are depressing the order flow," Natuzzi slashed the length of work shifts on its Italian production lines by 38%, to five hours per shift.
Furniture Brands InternationalIn contrast, Furniture Brands (NYSE: FBN) investors got a rare bit of good news last night, as the company released a sales update suggesting that things aren't quite as bad as they were looking last month. While FBI CEO Mickey Holliman cautioned that the furniture biz remains "challenging," he now believes sales for this quarter will decline only 12% year over year, and not the 15% previously predicted. Even better, he doesn't expect to lose more than $0.07 per share, a penny better than consensus estimates. How likely is it that Holliman is right? Pretty likely, I'd say -- the quarter he's talking about ends in just two weeks.
What does it all mean?But does the fact that the most recent news is the most optimistic mean that the furniture industry has finally turned the corner? The continued housing slump says otherwise. And of course, a 12% sales decline is still a decline. No, I'm afraid all we saw yesterday was a variation on the sage old advice: "Hope for the best, but prepare for the worst." One month ago, FBI prepared us for the worst. Yesterday, it gave us a little hope that the worst, at least, may be avoided.
Viewed in the context of the 5% haircut that Bed Bath shares received in the wake of its earnings warning, and the 15% hit that Hooker took after reporting its earnings news, FBI appears to have made the right decision -- at least from a PR perspective -- and saw its shares rise about 3% in after-market trading in reward. But we're not out of the woods yet.

Exclusive Research: Sales up 6.6% for Top 100 in 2006

HIGH POINT — The nation's largest furniture stores posted a 6.6% increase in sales last year, bettering all furniture stores as a whole during the toughest business climate in years.
Click here to order an electronic copy of F/T's Top 100 U.S. Furniture Stores U.S. furniture, bedding and accessories sales for FurnitureToday’s 27th annual Top 100 grew to $31.5 billion from nearly $29.5 billion for the same companies last year. The growth rate topped that of all furniture stores, which posted a 6% gain to $63.9 billion, but the performance wasn’t nearly as blistering as the 8.3% sales increase for the previous year’s Top 100 companies. That beat the 4.1% gain for all furniture stores in 2005 by a wide margin.


This year’s Top 100 has a new No. 1 in Ashley Furniture HomeStores, the dedicated store network that’s on a torrid growth path with a 32.8% increase in sales to $2.1 billion — the first chain to top $2 billion — at nearly 300 stores by the end of the year. It supplanted No. 2 Rooms To Go, which had held the top spot for five consecutive years and grew a more-than-respectable 10% this year to $1.76 billion.
The Top 100 as a whole didn’t gain any market share, holding steady at 55% — while last year’s group of Top 100 stores added two percentage points to grab a 56% market share from 54% the previous year. This year’s holding pattern came despite opening more stores (a net 297 units) than last year’s group.
The results support a number of industry trends, including continuing consolidation, with the largest players getting even stronger, general tough economic times for industry with few signs of a letup and the relentless march of alternative distribution channels — the Costcos and Wal-Marts of the world who must be snatching volume lost by smaller independents and not accounted for by big furniture stores.