Investors suddenly became bullish on the company’s rather specific retail segment.
On the last trading day of the week, it was good to be a furniture and home furnishings retailer.
Largely on the news that a prominent peer in the sector had a smashing second quarter, Wayfair (W 5.74%) stock rose in sympathy on Friday. The company’s share price zoomed nearly 6% higher, easily beating the 0.5% rise of the bellwether S&P 500 index.
A peer outperforms
The rival with the solid quarterly figures was RH (RH 25.49%), which unveiled its latest set of numbers after market hours on Thursday. The company’s revenue and net income figures both topped the average analyst estimates, and management expects demand for its wares to “accelerate” through this year into next.
Wayfair is not RH, of course. Its customer demographic is broader, and until very recently it was purely an online retailer (that changed in May 2024, when it opened the doors of a brick-and-mortar outlet in Illinois).
Yet furniture and home furnishings is a fairly narrow and specific retail category, so all things being equal, a good showing by one large company in the business indicates a favorable environment for others.
Better results ahead, pundits believe
Neither Wayfair nor RH stock will move on the former’s financial results anytime soon. That’s because it’s currently on track to publish third-quarter figures in November, and the preceding period’s details were laid out at the beginning of August. Regardless, analysts are expecting a decent showing by Wayfair in terms of the bottom line — collectively they’re modeling a flip into the black with a net income of $0.14 per share against third-quarter 2023’s $0.13 loss. Revenue, though, is expected to sag by 3% to $2.89 billion.