Takeaway: Deep dive on Wed 2/15 on Home Retail consumption, likely earnings misses vs Street and ultimately our (mostly short) stock calls.

Home retail names have mostly traded sideways to up since our last deep dive on the space in November.  We’ve been doing incremental research around the spending risk and specifically vetting the theme we’re hearing from some management teams that lower housing turnover will simply result in more home investment for non-movers netting out the spend risk.  The data we are finding suggests that is not the case, and we’ve incorporated some research reports along with PCE and housing data to create a scenario analysis on the industry over the next few years.

We continue to think that there are compounding risks to the home space in 2023 and into 2024 around housing demand, a weakening consumer, and mean reversion in consumption after a couple years of abnormal demand.  The consensus expectations and stocks do not reflect the reset with think we will see in home spending over the coming quarters.

In this presentation we’ll look at the latest housing data points, up to date commentary from home retail and the home supply chain, then we’ll walk through the data sources and assumptions of our home retail scenario analysis model. We’re more focused on home improvement insights with this analysis, but the insights branch into furniture and appliance consumption as well.

Relevant Industry Tickers Include: HD, FND, LOW, WSM, RH, W, BBY, ARHS, ETD, HOFT, KIRK, LOVE, LL, OSTK, TSCO

Call Details
Wednesday, February 15th at 12:30pm ET
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