The Big 3 ASX Furniture Stocks have all gained over 60% in 12 months! Here’s why

ASX Furniture Stocks have been amongst the dark horses in the last 12 months. They all had an unexpected boom during the pandemic as locked down consumers spiced up their homes and home offices.

But while electronics need to be replaced very often, furniture does not. Nonetheless, the trio we would deem ‘The Big 3 ASX Furniture Stocks’ comprising of Nick Scali (ASX:NCK), Harvey Norman (ASX:HVN) and Temple & Webster (ASX:TPW) are all sitting on gains of over 60% in a year.

Now, if just one or two of these stocks recorded gains, you could put it down to individual company factors. But this is not the case – they are all recording gains and ironically, not all of them have recorded that spectacular sales growth that the share price growth would imply. Let’s take a look at why.

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ASX Furniture Stocks have had a boom! Why?

For all these companies, they posted very strong FY25 results, showing positive 12 month periods.

HVN made a $518m profit, up 47%, from $9.35bn revenue. It should noted that the value of its property portfolio (freehold retail real estate) was re-valued upward (~A$4.53 billion portfolio) which boosted reported profits. Nonetheless, same-store sales growth was 6.1%.

TPW recorded 21% higher revenue and a 532% higher profit, up from $1.8m to $11.3m. Moreover, this does not account for EOFY sales that will be recognised in FY26, but sales were 28% higher than the year before.

Now, NCK did not quite record as solid revenue growth with just 5.8%, and this was driven solely by UK sales growing from A$8m to $41.8m, ANZ sales fell 1.4%. Moreover, the company saw a 13% decline in its profit, and 13% in its Australian profit specifically. All these companies noted weak environments but spending continued. One thing we’d credit is the Stage 3 tax cuts which would have given more money to spend on furniture, not to mention falling interest rates.

Will the run last?

But let’s turn our attention to the companies’ futures? Are investors ignoring the future, or does it look bright?

Some of these companies have expansion plans. NCK is trying to expand into the UK and also has expansion plans in Australia. NCK identified 86 stores in the long-term (up from 64 right now) and 90-100 Plush stores. Investors may appreciate that these can impact the bottom line in the short-term but can pay off. And with NCK having achieved such stellar returns in the last 20 years, can you blame investors for trusting it so much?

Perhaps investors also like the high amount of revenue achieved per customer. Consider that TPW made $456 in revenue per active customer. Many companies hardly make any money from their customers – we’re going to single out fast food stocks here!

Another factor helping these companies is the structural shift to online retailing. This gives some companies more growth runway and investor excitement. eCommerce is in all honesty a tough business to be in unless you are Amazon given delivery costs.

But furniture is unique because it is an underpenetrated category, which is to say that a very low proportion of sales are done online. And while shipping is difficult, it is a cost cusotmers have been paying for a long time – even in stores, you would almost always pay for delivery of the products to your home.

The challenge

All this said, the slower growth of Adairs (ASX:ADH) would serve as a cautionary tale. It fell over 25% in 12 months, most of which has been in the aftermath of its results. The company’s profit fell 19% and trading figures in the first 4 months meant the company had to cut its guidance. Investors were not persuaded by messages that the upcoming November/December sales would help matters.

Now Adairs is a smaller player so you could just say the big ASX furniture stocks are in a different basket altogether. Nonetheless, we would also raise concerns that there is no guarantee there’ll be more interest rate cuts, and forthcoming tax cuts will be paltry at best.

We write this article to note the fascinating growth in the biggest ASX furniture stocks; but also highlight that investors who aren’t already in should be cautious for the reasons above.