Furniture Manufacturers See Booming Business During Pandemic

Friday, April 2, 2021 | Kate Stalter
Furniture Manufacturers See Booming Business During PandemicFurniture retailers Wayfair (NYSE: W), Natuzzi (NYSE: NTZ) and Bassett (NASDAQ: BSET) are among stocks benefiting as Americans relocate during the pandemic. 

But if you need some furniture for that new home, you might have to wait a while. That’s because the new-home trend is colliding with the online ordering trend, resulting in shipping backups.  

Even before the Ever Given got stuck in the Suez Canal in March, congestion at U.S. ports was causing delivery delays. For companies in the furniture business, backlogged orders may cause headaches, but it bodes well for the top- and bottom lines, as well as stock prices. 

Wayfair shares are trending in a sideways fashion, as shares are trying to overcome price resistance at $369. Despite trading essentially sideways for the past seven months, the stock is nonetheless up 39.39% year-to-date, ending Thursday’s session at $338.

Although some pandemic winners, such as Zoom (NASDAQ: ZM) and Peloton (NASDAQ: PTON) are pulling back among vaccine rollouts and optimism about an economic recovery, Wayfair may benefit from the continuation of the new-home trend. 

Wayfair shares returned 488.98% over the past year, thanks to big gains in April through August of 2020. 

The Boston-based company sells furniture and home decor items through its catalog of Web sites, including Wayfair, Birch Lane and All Modern.

The company flipped the switch to profitability in 2020, earning $5.04 per share last year on revenue of $14 billion, a 55% year-over-year improvement. Revenue has grown at double-digit rates for the past nine years. 

On March 31, DA Davidson boosted its price target on the stock from $325 to $450. 
Furniture Manufacturers See Booming Business During Pandemic

Natuzzi, an Italian maker of leather and fabric sofas and chairs, slipped -3.35% year-to-date. That’s a little deceptive, however as the stock is up 2.62% in the past month. 

October 2020 brought a gain of 262.35%, as factories and stores reopened in Italy, which was hit extremely hard in the early months of the pandemic. 

Like Wayfair, Natuzzi is etching a sideways base along both its 10-day and 50-day lines, which converged in mid-February and are still clinging to each other. This kind of tight trade is often a precursor to further gains, as it indicates that institutional investors are holding shares at a particular price level.

In February, Natuzzi closed a sale of its flexible polyurethane foam division to The Vita Group, based in the U.K., for $7.18 million. 

Natuzzi is slated to report fourth-quarter and full-year 2020 results on April 6. In the most recent quarter, the company reported a loss of $0.47 per share on revenue of $98.9 million, up 3% from the prior year. 
Furniture Manufacturers See Booming Business During Pandemic
Bassett, a Virginia-based maker of home furnishings and accessories, reported first-quarter earnings of $0.40 per share, trouncing analyst estimates of $0.24 per share. The company beat Wall Street views in each of the past four quarters.

Revenue was $113.7 million, missing views by a razor-thin margin of 0.47%. 

The stock initially gapped higher on the news, but finished the session down 0.37%, or $0.09, to $24.18. 

The stock has been posting strong price gains, advancing 472.07% over the past year. In its earnings press release, the company said, “Incoming orders continued at a torrid pace during the first quarter of fiscal 2021. All sales channels recorded written business increases, resulting in a 44% year-over-year spike in net orders.”

The company operates using a “sell then make” model, whereby customers order furniture, which is then manufactured and shipped. Bassett is opening an additional upholstery manufacturing facility in Newton, North Carolina, with construction beginning June 1.

Bassett’s broke out of a cup-shaped base in above-average volume on March 12. It pulled back after that, and is currently trading above its 10-day and 50-day moving average. The current formation is in a cup shape, but it’s too soon to say whether it may go on to form a handle or perhaps decline again into a double-bottom pattern. 
Furniture Manufacturers See Booming Business During Pandemic

Featured Article: FinTech



7 Low-Priced Dividend Stocks Under $10

The recent trading activity surrounding low-priced stocks like GameStop (NYSE:GME) is a reminder to investors of the high-risk nature involved with these stocks. Often when a stock trades for under $10 (also termed a penny stock), it is trading that low for a reason. The company may not be profitable, or in the case of GameStop, it finds itself with a business model that no longer fits with consumer trends.

But that’s not always the case. It is possible to find low-priced stocks, even penny stocks, that offer great value. This is particularly true if the stock offers investors a dividend. Dividend-earning stocks are a diversification source for a consumer’s portfolio, particularly if the dividend gets reinvested. It’s literally like paying yourself for owning the stock.

And the stocks in this presentation look ready also to deliver some additional stock price growth that can increase your total return.

View the "7 Low-Priced Dividend Stocks Under $10".


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Wayfair (W)1.5$325.94+1.5%N/A-46.70Hold$317.43
Bassett Furniture Industries (BSET)1.5$33.82-1.0%1.48%-15.30Buy$25.50
Natuzzi (NTZ)0.6$15.52-3.0%N/A-5.58N/AN/A
Compare These Stocks  Add These Stocks to My Watchlist 

MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research. As a bonus to opt-ing into our email newsletters, you will also get a free subscription to the Liberty Through Wealth e-newsletter. You can opt out at any time.