Zacks Industry Outlook Highlights Home Depot, Lowe's, Williams-Sonoma and The Lovesac

For Immediate ReleaseChicago, IL – June 16, 2025 – Today, Zacks Equity Research discusses The Home Depot, Inc. HD, Lowe's Companies LOW, Williams-Sonoma, Inc. WSM and The Lovesac Co. LOVE.Industry: Home FurnishingsLink: https://www.zacks.com/commentary/2498017/4-retail-home-furnishing-stocks-to-watch-from-a-prospering-industryThe Zacks Retail-Home Furnishings industry is showing positive momentum in 2025, supported by stable mortgage rates, improved consumer confidence, and a rebound in housing activity. Digital platforms are driving growth with AR shopping tools, AI-powered personalization, and mobile-first strategies that appeal to Gen Z and millennials.Companies likeThe Home Depot, Inc., Lowe's Companies, Williams-Sonoma, Inc. and The Lovesac Co have been leveraging product reinvention, efficient cost management, exclusive collaborations, and innovative marketing strategies to stand out as winners, as they capture market share while enhancing the customer experience. Despite economic headwinds and tariff concerns, the industry's tech-driven evolution signals a favorable long-term outlook. Companies combining digital innovation with strong branding and service integration are well-positioned to outperform in the evolving retail landscape.Industry DescriptionThe Zacks Retail-Home Furnishings industry comprises retailers offering home furnishing products under various categories. The merchandise assortment includes furniture, garden accessories, framed art, lighting, mirrors, candles, tableware, lamps, picture frames, bathware, accent rugs, artificial floral products, and child and teen furnishing. The industry players also develop, manufacture, market and distribute bedding products. The companies provide home and security products for residential home repair, remodeling, new construction and security applications. They are involved in manufacturing, assembling and selling faucets, accessories, kitchen sinks and waste disposal.4 Trends Shaping the Future of the Retail-Home Furnishings IndustryOnline Growth, Tech platforms, Digital Services & Personalization: Continuing acceleration in online furniture shopping, combined with cutting-edge solutions like room visualizers and AR, unlocks strong growth potential. Major platforms, like Wayfair, Amazon and Williams-Sonoma, are investing heavily in AI driven personalization and immersive user experiences. Features like augmented reality (AR) room visualizers, virtual reality showrooms, and mobile first shopping are reshaping the consumer journey. Companies leading innovation in these areas are well positioned to capture share as convenience and digital engagement become critical in buying decisions.Gen Z and millennials value customization. Services such as AI-driven design apps, virtual interior consulting, and bundling (such as packaged room solutions) will help the companies boost margins. For example, Lowe's acquisition of Artison Design (a home furnishing design/install company) signals that offering full-service packages is lucrative. Furniture retailers can similarly offer in-home assembly, design subscription services, or AR "try-before-you-buy" apps to increase attachment rates and customer loyalty.Strong Product Reinvention & Marketing Moves: Product innovation plays a pivotal role in market share gain in this industry. Companies aim to come up with products and collaborate with celebrated brands and designers to maintain exclusivity. Also, customer experience is being enhanced by innovative marketing techniques, with an emphasis on digital marketing, better merchandising, store remodeling and loyalty programs.The companies are also going for strategic omnichannel expansion. Even digitally native retailers are exploring brick-and-mortar formats to enhance brand visibility and customer experience. Wayfair's first large-format store in Illinois exemplifies this hybrid approach. Meanwhile, premium players like RH continue expanding showrooms that blend physical touchpoints with high-end brand storytelling.Improved Consumer Confidence, Stabilizing Mortgage Rates, Housing Market Recovery & Builder Partnerships: Though households continued to worry about tariffs raising prices and hurting the economy, U.S. consumer confidence improved in May 2025 after deteriorating for five straight months. Consumer confidence index increased 12.3 points to 98.0 in May. Consumers' assessments of current business conditions improved in May, along with consumers' outlook for their income prospects, which turned positive.Meanwhile, mortgage rates have moved within a narrow range for the past few months. Freddie Mac reports that 30 year mortgage rates have remained steady for the week that ended June 12, hovering around 6.84%, closely tracking the narrow range seen over the past few months. According to Chief Economist Sam Khater, this environment of rate stability, along with increased housing inventory and slowing house price growth, forms a promising backdrop for prospective homebuyers.Economic Uncertainties: The Federal Reserve (Fed) has lowered its U.S. economic growth forecast amid uncertainty while raising its inflation projection surrounding President Trump's tariff policies in the latest March 2025 meeting. The Fed now expects GDP growth of 1.7% in 2025, down from its previous estimate of 2.1% (predicted in December 2024), and inflation to rise to 2.7%, partly due to tariffs.Interest rates remain unchanged at 4.25%-4.5%, but policymakers signal potential rate cuts later this year. Fed Chair Jerome Powell highlighted "remarkably high" uncertainty, while Trump urged the Fed to cut rates further. Economists warn tariffs could push prices higher, despite Trump's claims that they will benefit the U.S. economy.While mortgage rates have stabilized, affordability remains a key issue, with 30-year rates still being high at 6–7%. This continues to deter buyers despite rising inventory. Home prices remain elevated as financing costs suppress demand. Broader economic uncertainties, ranging from inflation to tariff tensions, further weigh on consumer confidence and cloud the housing market outlook. Also, fierce competition in the home furnishings space is intensifying, with online giants like Amazon and Wayfair, specialty retailers, and direct-to-consumer brands pressuring traditional stores.Zacks Industry Rank Depicts Bright ProspectsThe Zacks Retail-Home Furnishings industry is a 10-stock group within the broader Zacks Retail-Wholesale sector. The industry currently carries a Zacks Industry Rank #81, which places it in the top 33% of more than 250 Zacks industries.The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates notable near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.Before we present a few stocks that you may want to consider for your portfolio, let's take a look at the industry's recent stock-market performance and valuation picture.Industry Lags the Sector & S&P 500The Zacks Retail-Home Furnishings industry has underperformed the broader Zacks Retail-Wholesale sector and the Zacks S&P 500 Composite over the past year.The industry has lost 0.4% against the broader sector's 16.1% growth. The Zacks S&P 500 Composite has gained 10.8% over this period.Industry's Current ValuationOn the basis of the forward 12-month price-to-earnings ratio, which is commonly used for valuing retail home furnishing stocks, the industry is currently trading at 20.44 compared with the S&P 500's 22.02 and the sector's 24.55.Over the last five years, the industry has traded as high as 24.96X and as low as 14.07X, with the median being 20.07X.4 Retail-Home Furnishings Stocks to WatchWe have highlighted four stocks from the industry that are capitalizing on fundamental strengths and have solid growth prospects.Lovesac: Based in Stamford, CT, this company designs, manufactures, and sells furniture. Lovesac's innovation, operational efficiency, and strategic channel optimization have been driving growth. New products like the Recliner and EverCouch expanded their addressable market and enhanced customer engagement, with positive early feedback and solid showroom traction.The company achieved 4.3% revenue growth in first-quarter 2025 despite industry contraction, highlighting market share gains. Operationally, SG&A leverage improved through cost discipline, while repeat purchases rose 20% year over year, supported by a revamped digital experience. Lovesac's strong balance sheet, reduced China exposure, vendor concessions, and selective price increases position it well to manage tariffs and sustain profitable growth through the remainder of 2025.The Lovesac stock — currently carrying a Zacks Rank #1 (Strong Buy) — has dropped 30.7% over the past year. Meanwhile, this company surpassed earnings estimates in all the trailing four quarters, the average being 14.4%. Lovesac's estimated figure for fiscal 2025 indicates 23.2% year-over-year growth. The upside is supported by its solid VGM Score of A, contributed by a Value and Growth Score of A. You can see the complete list of today's Zacks #1 Rank stocks here.Lowe's: Based in Mooresville, NC, Lowe's operates as a home improvement retailer in the United States. The company has been benefiting from a resilient Pro business, improved online engagement, strategic acquisitions, and technological innovation. Steady growth in its Pro segment, driven by improved loyalty offerings and enhanced service capabilities tailored to professional customers, is a major tailwind.The company's strategic acquisition of a leading interior surface provider — Artisan Design Group — is expected to deepen its reach into the home construction and renovation market. Digital strength was another key driver, with increased online traffic and conversions supported by the rollout of a new third-party marketplace.Technological advancements, including the launch of an AI-powered virtual advisor, helped streamline both customer interactions and associate efficiency. Strong momentum in appliances and seasonal categories has also been contributing to overall stability.The Lowe's stock — currently carrying a Zacks Rank #3 (Hold) — has gained 0.1% over the past year. Meanwhile, this company surpassed earnings estimates in all the trailing four quarters, the average being 3.2%. Lowe's has seen an upward estimate revision for fiscal 2025 earnings to $12.29 per share from $12.25 over the past 30 days, depicting analysts' optimism over the company's prospects. The estimated figure for fiscal 2025 indicates a 2.4% year-over-year growth. It carries a VGM Score of A.Home Depot: Based in Atlanta, GA, the world's largest home improvement specialty retailer based on net sales. The company has been navigating the macroeconomic pressures with strong execution. Revenue rose 9.4% year over year in first-quarter 2025, driven by resilient customer engagement, especially in smaller projects and spring events like Spring Black Friday.Pro customer comps outpaced DIY, with strength in core categories such as building materials and concrete. The SRS acquisition continued to exceed expectations, supporting growth in trade credit and complex Pro capabilities. Digital sales are also on the rise, aided by faster delivery and the rollout of AI-powered tools like Magic Apron. Additionally, inventory levels were well-positioned, and customer sentiment remained healthy, supported by rising home equity and job stability.The Home Depot stock — currently carrying a Zacks Rank #3 — has gained 4.7% over the past year. Meanwhile, this company surpassed earnings estimates in three of the trailing four quarters and missed on one occasion, the average being 2.2%. Home Depot has seen an upward estimate revision for 2025 earnings to $15.04 per share from $15.01 over the past 30 days. The estimated figure for 2025 indicates a 1.3% year-over-year decline. It carries a VGM Score of A.Williams-Sonoma: This is a San Francisco, CA-based multi-channel specialty retailer. The company has been benefiting from its focus on digital initiatives, higher e-commerce penetration and product introductions. Williams-Sonoma is capitalizing on its strategic emphasis on broadening its product range and establishing a sustainable operational framework.By adopting a digital-first approach without exclusively relying on digital-only channels, the company has gained a competitive edge. Its strong e-commerce platform and successful Business-to-Business segment position it for substantial expansion, overcoming ongoing consumer spending challenges. The company's portfolio of brands serving a range of categories, aesthetics and life stages is a tailwind.The WSM stock — currently carrying a Zacks Rank #3 — has gained 3.8% over the past year. This company surpassed earnings estimates in all the trailing four quarters, the average being 8.8%. WSM has seen an upward estimate revision for fiscal 2025 earnings to $8.53 per share from $8.49 over the past 30 days. The estimated figure for fiscal 2025 indicates a 3% year-over-year decline. It has a ROE of 52.7%.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance  for information about the performance numbers displayed in this press release.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lowe's Companies, Inc. (LOW): Free Stock Analysis Report The Home Depot, Inc. (HD): Free Stock Analysis Report Williams-Sonoma, Inc. (WSM): Free Stock Analysis Report The Lovesac Company (LOVE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks