Q1 2022 HFA/Piper Sandler Furniture Retailer Survey

Q1 2022 HFA-Piper Sandler Furniture Retailer Survey_5-2022

The Q1 Furniture Retailer survey completed by Piper Sandler in partnership with the Home Furnishings Association (HFA) shows sales were flat to down for Q1. Sales were +1%/-5% on a mean/median basis. Transactions during Q1 declined -12% to -15%, while ASP was up mid-teens %. Online sales for retailers lagged overall sales. For Q2, retailers expect sales to be roughly flattish – with higher ASP retailers calling for stronger growth. While not covered in our survey, we are hearing that inventory levels have improved dramatically in recent months (despite some ongoing out-of-stocks), which may lead to increased promotions during Q2 – and a big focus on major selling events such as Memorial Day.

  • Q1 Sales Growth was up 1% on a mean basis and down -5% on a median basis, representing 2-yr growth of ~27%. Responses ranged from -11% to +27%, with 71% of retailers reporting a decline in sales y/y.
  • Monthly Trends Rocky, Comeback in March. On a mean/median basis, January sales were -4% and -11%, February sales were +12% and +8%, and March sales were +1% and flat. Notably, inventory levels look to be catching up at retailers.
  • ASP Flattish Y/Y, Moderates vs. Prior Quarter. ASP was up 15% y/y, decelerating from 19%-20% in Q4, which could represent pushback from consumers on price increases.
  • Q2 Sales Expected to be Flat to Up. Forecasts for Q2 sales growth are fairly wide but overall call for an increase of +1% to flat on a mean/median basis. Generally, higher-end positioned furniture retailers (>$2,000 ASP) are calling for Q2 sales growth, while others (<$2,000 ASP) generally expect sales to decline -5% to -10%.
  • 2022 Sales Outlook Ticks Down, But Still Decent. Retailers expect 2022 sales growth of flat to +3% y/y, down slightly from prior expectations in January of +1%-5% y/y. Further, this compares to growth of 20-24% in 2021.
  • Supply Chain Outlook — Expectations Pushed Out. The majority of retailers now expect supply chain delays won’t be fully resolved until 2023, vs. in Q4 ’21 and Q1 ’22 when the majority were calling for 2H ’22.
  • Online Sales Step Down. Online sales came down -4%/-9% on a mean/median basis in Q1, generally worse than the overall sales trend as retailers lapped ~140% growth in Q1 ’21, and the shift back to brick and mortar stores continues. Online mix was 6% of total sales, in line with prior quarters.
  • Survey Background: Our survey consists of input from 7-8 privately held furniture retailers around the country representing 350-400 stores.
  • Stock Call-outs: For stock call-outs in the space, we are most favorable on ARHS given its high-end positioning. For W & OSTK, we are still doing supplier checks but expect online platforms have been more challenged in 2022 versus brick and mortar. We preview both names in a separate note today (here). For BIG, we expect sales trends were quite challenged during March and will continue into April, as a result of its lower-end positioning and lapping 2 years of stimulus.

 

Download the full Furniture Retailer Survey report here.

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