Furniture Makers, Sellers Fall on Weakened Stanley Furniture Outlook
NEW YORK (AP) — Shares of furniture makers and retailers fell on Thursday, a day after Stanley Furniture Co. cut its profit and revenue forecasts for the third quarter and full year, due to sluggish retail sales.
Shares of Stanley Furniture slid $1.78, or 7.7 percent, to $20.99 on the Nasdaq. On the New York Stock Exchange, Ethan Allen Interiors Inc. shares fell 96 cents, or 2.7 percent, to $35.15; Steelcase Inc. shares shed 26 cents to $14.67, and Furniture Brands International Inc. shares fell 77 cents, or 3.9 percent, to $18.85.
After Wednesday’s close, Stanley Furniture said its third quarter sales to date have been weaker than expected, which it blamed on overall industry conditions. The Stanleytown, Va., company makes wood furniture aimed at the upper-medium price range.
Furniture companies’ shares have been pressured in recent weeks by the slowing housing market and higher energy prices, which have hurt demand for big-ticket items.
Last Wednesday, St. Louis-based Furniture Brands, whose brands include Lane, Thomasville and Broyhill, also cut its third-quarter forecast, citing softer business trends.
Stanley’s worsened outlook was unsurprising, given the current environment for home furniture makers, Raymond James said in a client note.
“Management previously commented that its tone of business began to slow late last year. The slowdown exacerbated in early summer, widely affecting companies in the industry,” analyst Budd Bugatch wrote in the note. “Although Labor Day was good for industry participants, Stanley management noted that there had not been a significant change, and this prompted its warnings.”
Stanley on Wednesday forecast third-quarter profit between 27 cents to 29 cents per share, down from a previous range of 38 cents to 41 cents, on an expected sales decline between 8 percent to 10 percent. It also cut its full-year estimate.
Raymond James also cut its rating on Haverty Furniture Cos., Atlanta, to “Market Perform” from “Outperform,” saying the stock has reached its $17 price target. Haverty Furniture shares fell $1.60, or 9.4 percent, to $15.50 on the NYSE.
