Shares of furniture retailers with significant exposure to US imports rose in premarket trading after President Donald Trump delayed planned tariff increases on several key home goods categories, offering temporary relief to a sector grappling with weak consumer demand and cost pressures.
Late on Wednesday, Trump signed a proclamation postponing higher tariffs on upholstered furniture, kitchen cabinets and vanities for one year, pushing the increase to 2027.
The move keeps existing tariffs at 25% for now, rather than allowing them to rise sharply next year as previously scheduled.
In September, Trump had ordered new tariffs of 25% on kitchen cabinets and upholstered furniture, which took effect in October.
Under the original plan, rates were due to climb to 50% and 30% respectively by 2026, raising concerns across the furniture industry about higher prices, squeezed margins and softer demand.
Following the announcement, shares of online furniture retailer Wayfair rose about 4% before the opening bell.
Wayfair relies heavily on imports from China and Vietnam, two of the largest suppliers of furniture to the US.
Williams-Sonoma, owner of brands including Pottery Barn and West Elm, gained over 2%, while luxury furniture retailer RH climbed around 5.5% in premarket trading.
Both RH and Williams-Sonoma have been working in recent years to diversify their supply chains to reduce reliance on any single country.
Tariffs tied to import surge concerns
The tariffs were originally justified by the administration as a response to what it described as large-scale flooding of imported furniture and cabinetry into the US market, particularly from China and Vietnam.
“The United States continues to engage in productive negotiations with trade partners to address trade reciprocity and national security concerns with respect to imports of wood products,” the White House said in the New Year’s Eve proclamation announcing the delay.
Analysts at Mizuho said the decision would provide near-term breathing room for furniture retailers, especially Wayfair.
“The company’s marketplace model has absorbed pricing well to date, flexing product sourcing where appropriate and avoiding direct margin pressure,” analysts David Bellinger and Declan Kelley said in a note.
They added that structural changes in Wayfair’s business were helping it gain market share, with tariffs potentially favouring larger players that have more flexibility in sourcing and pricing.
Valuation concerns linger for Wayfair
Not all analysts are convinced that the tariff delay materially improves the longer-term outlook.
Jefferies downgraded Wayfair to Hold last month, arguing that the stock’s valuation has expanded well beyond peers despite signs of weakening demand.
Wayfair trades at close to a 40% premium to comparable consumer internet companies, Jefferies said, warning that further multiple expansion would be difficult without stronger earnings growth.
The firm expects about 12% EBITDA growth in 2026, below the market’s expectations of around 16%.
Jefferies also flagged softer web traffic and survey data.
SimilarWeb data showed US site visits slowing in November, while Morning Consult surveys indicated buying intent turning negative as middle-income consumers faced growing labour market pressures.
Williams-Sonoma seen as steadier play
Williams-Sonoma, by contrast, has been viewed more favourably by analysts after delivering a solid third-quarter performance despite macroeconomic headwinds.
The company reported revenue of $1.88 billion, up 4.4% year on year and ahead of market expectations, with strength across its brands.
Analysts point to Williams-Sonoma’s balance sheet, cash flow generation and capital returns as key strengths.
The company pays out roughly 30% of earnings as dividends and targets mid- to high-teens operating margins, which it has consistently delivered in recent years.
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