An increased focus on remodeling and decorating living spaces as part of a widespread embrace of remote lifestyles has been driving the furniture industry’s growth. Propelled by the industry tailwinds, the price of RH’s (RH (NYSE:RH)) stock has rallied nearly 160% over the past year. The good news is that we think investors that failed to cash in on RH’s surge could still benefit from the industry tailwinds by betting on Williams-Sonoma (NYSE:WSM), Haverty (NYSE:HVT) Furniture Companies (HVT), and Bassett Furniture Industries (NASDAQ:BSET).These names still have upside to deliver. Read on.The demand for furniture and related home improvement products has increased significantly thanks to the widespread adoption of remote lifestyles amid the COVID-19 pandemic. The furniture industry is expected to continue seeing solid demand throughout the remainder of 2021 because remote lifestyles are expected to continue, at least in part.
One of the largest upscale home furnishings companies, RH (RH), had a solid rally over the past year, capitalizing on the industry tailwinds. The company’s strong financials helped it become one of the industry’s winners. RH’s net revenue increased 78.3% year-over-year to $860.79 million in its fiscal first quarter, ended May 1, while its net income improved 4,167.7% from its year-ago value to $130.66 million. The company’s EPS increased 2564.7% year-over-year to $4.19. Shares of RH have gained 7.6% since the release of its first quarter results on June 9. The stock has gained 47% year-to-date, and 38.4% over the past three months.
While RH may have run too far too fast, we believe there is still upside remaining in furniture stocks Williams-Sonoma, Inc. (WSM), Haverty Furniture Companies, Inc. (HVT), and Bassett Furniture Industries, Incorporated (BSET). These companies have expanded their offerings substantially over the past couple of months and possess strong financials.