The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how home furnishing and improvement retail stocks fared in Q2, starting with Lowe's (NYSE: LOW).

Home furnishing and improvement retailers understand that ‘home is where the heart is’ but that a home is only right when it’s in livable condition and furnished just right. These stores therefore focus on providing what is needed for both the upkeep of a house as well as what is desired for the aesthetics of a home. Decades ago, it was thought that furniture and home improvement would resist e-commerce because of the logistical challenges of shipping a sofa or lawn mower, but now you can buy both online; so just like other retailers, these stores need to adapt to new realities and consumer behaviors.

The 7 home furnishing and improvement retail stocks we track reported a mixed Q2. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 12.7% since the latest earnings results.

Lowe's (NYSE: LOW)

Founded in North Carolina as Lowe's North Wilkesboro Hardware, the company is a home improvement retailer that sells everything from paint to tools to building materials.

Lowe's reported revenues of $23.96 billion, up 1.6% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a narrow beat of analysts’ gross margin estimates but revenue in line with analysts’ estimates.

"This quarter, the company delivered positive comp sales driven by solid performance in both Pro and DIY. Despite challenging weather early in the quarter, our teams drove both sales growth and improved profitability. I'd also like to thank our front-line associates for their outstanding service which led to another increase in customer satisfaction scores." said Marvin R. Ellison, Lowe's chairman, president and CEO.

Unsurprisingly, the stock is down 8.7% since reporting and currently trades at $234.20.

Is now the time to buy Lowe's? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q2: Arhaus (NASDAQ: ARHS)

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

Arhaus reported revenues of $358.4 million, up 15.7% year on year, outperforming analysts’ expectations by 7.4%. The business had an exceptional quarter with EBITDA guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

Arhaus delivered the biggest analyst estimates beat and fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $9.79.

Is now the time to buy Arhaus? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q2: Sleep Number (NASDAQ: SNBR)

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

Sleep Number reported revenues of $327.9 million, down 19.7% year on year, falling short of analysts’ expectations by 8.3%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue EPS estimates.

Sleep Number delivered the highest full-year guidance raise but had the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 27.7% since the results and currently trades at $5.90.

Read our full analysis of Sleep Number’s results here.

Floor And Decor (NYSE: FND)

Operating large, warehouse-style stores, Floor & Decor (NYSE: FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.

Floor And Decor reported revenues of $1.21 billion, up 7.1% year on year. This number met analysts’ expectations. Zooming out, it was a satisfactory quarter as it also logged a solid beat of analysts’ gross margin estimates but full-year revenue guidance meeting analysts’ expectations.

The stock is down 14% since reporting and currently trades at $66.

Read our full, actionable report on Floor And Decor here, it’s free for active Edge members.

Home Depot (NYSE: HD)

Founded and headquartered in Atlanta, Georgia, Home Depot (NYSE: HD) is a home improvement retailer that sells everything from tools to building materials to appliances.

Home Depot reported revenues of $45.28 billion, up 4.9% year on year. This print was in line with analysts’ expectations. Zooming out, it was a slower quarter as it logged a miss of analysts’ EBITDA estimates and EPS in line with analysts’ estimates.

The stock is down 4.7% since reporting and currently trades at $375.99.

Read our full, actionable report on Home Depot here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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