Dj Rh: Stefan Duban, Chief Gallery & Customer Officer, Departs Company

Wrapping up Q3 earnings, we look at the numbers and key takeaways for the home furniture retailer stocks, including Sleep Number and its peers.

Furniture retailers understand that ‘home is where the heart is’ but that no home is complete without that comfy sofa to kick back on or a dreamy bed to rest in. These stores focus on providing not only what is practically needed in a house but also aesthetics, style, and charm in the form of tables, lamps, and mirrors. Decades ago, it was thought that furniture would resist e-commerce because of the logistical challenges of shipping large furniture, but now you can buy a mattress online and get it in a box a few days later; so just like other retailers, furniture stores need to adapt to new realities and consumer behaviors.

The 4 home furniture retailer stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was in line.

Luckily, home furniture retailer stocks have performed well with share prices up 49% on average since the latest earnings results.

Weakest Q3: Sleep Number

Known for mattresses that can be adjusted with regards to firmness, Sleep Number manufactures and sells its own brand of bedding products such as mattresses, bed frames, and pillows.

Sleep Number reported revenues of $342.9 million, down 19.6% year on year. This print fell short of analysts’ expectations by 5.4%. Overall, it was a disappointing quarter for the company with full-year EBITDA guidance missing analysts’ expectations significantly and a significant miss of analysts’ revenue estimates.

Linda Findley, President and CEO, commented, “We have successfully executed an amendment and extension of our bank agreement through 2027, giving us greater flexibility to further our turnaround plans. With this new agreement, combined with meaningful fixed cost reductions achieved in 2025, we will invest in growth in 2026. To drive consumer demand, we are making strategic shifts in three key areas: product, brand positioning and distribution.”

Sleep Number achieved the highest full-year guidance raise but had the weakest performance against analyst estimates and weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is up 116% since reporting and currently trades at $11.87.

Read our full report on Sleep Number here, it’s free.

Best Q3: Williams-Sonoma

Started in 1956 as a store specializing in French cookware, Williams-Sonoma is a specialty retailer of higher-end kitchenware, home goods, and furniture.

Williams-Sonoma reported revenues of $1.88 billion, up 4.6% year on year, outperforming analysts’ expectations by 0.6%. The business had a strong quarter with an impressive beat of analysts’ gross margin estimates and a decent beat of analysts’ EBITDA estimates.

The market seems happy with the results as the stock is up 17% since reporting. It currently trades at $211.52.

RH

Formerly known as Restoration Hardware, RH is a specialty retailer that exclusively sells its own brand of high-end furniture and home decor.

RH reported revenues of $883.8 million, up 8.9% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.

Interestingly, the stock is up 52.2% since the results and currently trades at $232.50.

Read our full analysis of RH’s results here.

Arhaus

With an aesthetic that features natural materials such as reclaimed wood, Arhaus is a high-end furniture retailer that sells everything from sofas to rugs to bookcases.

Arhaus reported revenues of $344.6 million, up 8% year on year. This number beat analysts’ expectations by 2%. More broadly, it was a satisfactory quarter as it also produced a solid beat of analysts’ EBITDA estimates but EBITDA guidance for next quarter missing analysts’ expectations significantly.

Arhaus achieved the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is up 10.8% since reporting and currently trades at $10.81.

Read our full, actionable report on Arhaus here, it’s free.

What Happened?

Shares of luxury furniture retailer RH jumped 3.6% in the afternoon session after an analyst at Morgan Stanley raised the price target for the company's shares to $275 from $250, while keeping an "Overweight" rating. This adjustment represented a 10% increase in the price target, signaling a positive outlook on the stock's value.

The shares closed the day at $232.90, up 4.2% from previous close.

What Is The Market Telling Us

RH’s shares are extremely volatile and have had 41 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 11 days ago when the stock gained 5.3% on the news that the White House announced a one-year delay on planned tariff hikes for many home goods, including furniture and cabinets. 

The decision kept the current 25% tariff rate in place, averting a scheduled increase to as high as 50% for items like kitchen cabinets and bathroom vanities that was set to take effect on New Year's Day. This move provided significant relief for retailers, as higher tariffs typically lead to increased costs. Companies would have faced the difficult choice of absorbing the extra expense, which hurts profitability, or passing it on to customers through higher prices, which could reduce sales. The news was met with investor optimism, sparking a rally in the sector.

RH is up 20.4% since the beginning of the year, but at $232.90 per share, it is still trading 48.8% below its 52-week high of $454.52 from January 2025. Investors who bought $1,000 worth of RH’s shares 5 years ago would now be looking at an investment worth $464.88.