Now that Labor Day Weekend has concluded, Minneapolis-based bank and financial services company Piper Sandler has released its post-holiday report with an outlook on the state of the industry. According to the company, it was “the strongest holiday weekend since early 2022,” with Friday and Monday being the two strongest days of the long weekend. Interest-free offers to customers were popular and likely helped “drive up the average ticket.” However, retailers noted that “interest-free terms will get shorter in the coming weeks outside of major selling periods.”
While furniture, on average, outperformed bedding, the company notes that “most retailers we connected with saw sales growth with many outperforming their own internal expectations,” Piper Sandler says. In the bedding category, units were “flattish to slightly down year over year, with average selling price at +HSD%.” One company with standout results was Tempur Sealy International Inc. Sales of the Lexington, Kentucky-based company’ were up mid-teens, bolstered by the success of its Tempur-Breeze line which recently relaunched in the second quarter of 2023.
Piper Sandler expects that the bedding industry will return to growth in the second quarter of 2024, based on answers from retailers and suppliers, and noted that many industry-wide discussions now have a more positive focus related to “when growth will return, instead of when the industry will bottom.” The report also outlines some of the overarching risks facing the industry today, including macroeconomic factors, freight and commodity costs and retailer-supplier relationships.
“For margins — particularly for furniture retailers and suppliers where lead times are longer vis-a-vis mattresses — industry participants noted a better outlook over the coming months/quarters as higher cost inventory (from freight) is sold off,” Piper Sandler adds.