The Zacks Furniture industry is laying the groundwork for long-term growth through innovation, digital expansion and product evolution. Companies are increasingly leveraging e-commerce, AI-driven personalization, and augmented reality (AR)/virtual reality (VR) tools to enhance customer engagement, while demand for multifunctional furniture—especially from millennials and Gen Z—is supporting new product development. Strategic acquisitions, partnerships and selective opportunities in the public sector further add to the industry’s growth optionality. Players such as La-Z-Boy Incorporated (LZB Quick QuoteLZB - Free Report) , MillerKnoll, Inc. (MLKN Quick QuoteMLKN - Free Report) and Bassett Furniture Industries, Incorporated (BSET Quick QuoteBSET - Free Report) are actively strengthening their portfolios and market reach.

That said, near-term headwinds persist. Cautious consumer spending and weak housing activity continue to weigh on demand for big-ticket furniture. Elevated labor, occupancy and marketing costs, along with competitive pricing and supply-chain inefficiencies, are pressuring margins despite temporary tariff relief.

Industry Description

The Zacks Furniture industry comprises manufacturers, designers and marketers of residential and commercial furnishing solutions. Some companies provide kitchen and bath cabinets as well as various engineered components and products in the United States, along with international markets. A few industry players also offer specialty rental services, such as modular and portable storage solutions, as well as modular space and portable storage solutions. They are involved in designing and producing a wide variety of engineered components and products for homes, offices and automobiles. The industry players cater to different sectors, namely construction, energy, healthcare, security, government, retail, commercial, education and transportation.

4 Trends Shaping the Furniture Industry's Future

Growth in E-commerce and Digital Transformation: The furniture sector is increasingly embracing digital platforms, with significant investments in e-commerce and technology to enhance customer experiences. Companies are integrating AR and virtual reality (VR) to allow customers to visualize furniture in their spaces before purchasing. Additionally, AI is being utilized for personalized recommendations and inventory management, streamlining operations and improving customer satisfaction. Moreover, as urban living spaces become more compact, there is a growing demand for multifunctional furniture that maximizes utility without compromising on style. Products like convertible sofas, foldable tables and storage-integrated seating are gaining popularity, especially among millennials and Gen Z consumers.

Innovation, Digital Marketing, Acquisitions & Focus on Public Sector: Product innovation plays a decisive factor in gaining market share in this industry. Players are investing in new products to improve the product mix in a competitive landscape and drive top-line growth. Also, millennials represent the largest consumer cohort in the furniture market. More money in the hands of this largest and most active generation of homebuyers should keep demand elevated. Customer experience is getting enhanced by innovative marketing techniques, emphasizing digital marketing, better merchandising, store remodeling and loyalty programs. These companies are utilizing advanced technology to enhance the overall customer experience, optimize their operations and provide innovative solutions. Companies that make strategic investments in digital innovation are poised to navigate challenges successfully and emerge as industry leaders.

The industry players are pursuing acquisitions to broaden their product portfolios and expand their geographic footprint and market share. They are also prioritizing the diversification of their business portfolios, expanding their global footprint and strengthening their positions in resilient sectors such as healthcare and the public sector. The companies are expected to benefit from strong global trends in infrastructure modernization. Focusing on public sector infrastructure modernization initiatives across educational, healthcare, and administrative environments will provide stability and long-term growth opportunities for furniture manufacturers, positioning them favorably in an evolving market landscape.

Economic Uncertainties: The U.S. furniture industry continues to face headwinds despite the Federal Reserve’s recent 25-basis-point rate cut and expectations for another in 2026. President Donald Trump’s decision to delay planned tariff hikes on upholstered furniture, kitchen cabinets, and vanities for one year offers some near-term relief, keeping the existing 25% duty in place while postponing steeper increases amid ongoing trade talks. This move helps limit immediate pricing pressure but underscores the volatility of U.S. trade policy. Still, weak housing activity remains the industry’s biggest challenge. A sustained rebound in furniture demand is unlikely until home sales improve meaningfully. Although mortgage rates have eased slightly, consumers remain cautious, often postponing big-ticket furniture purchases rather than canceling them altogether.

Higher Expenses: The industry players are engaged in active competition to enlarge their market share. In pursuit of this goal, industry players are intensifying their digital presence and refining shipping capabilities, leading to heightened investments. Also, the furniture industry is highly competitive, with home furnishing retailers, department stores and antique dealers having a hard time. The companies need to make incremental investments to address an expanding omnichannel environment, as shoppers tend to look for online options. Growth in online sales may continue to dent traditional furniture retailers’ market share as brands such as Etsy, Things Remembered, Costco and Amazon are finding their way into the market. Alongside these challenges, rising SG&A rates, increased labor and occupancy costs, and elevated expenses related to marketing and stores could place a strain on profit margins. The labor market has struggled with the limited availability of labor, which is pushing up labor costs.

The industry players believe that future profitability will depend less on volume recovery and more on operating leverage from leaner cost structures. This reflects a broader industry recognition that pre-pandemic demand levels may not return quickly, if at all, reinforcing the need for resilient business models.

Zacks Industry Rank Indicates Bright Prospects

The Zacks Furniture industry is a seven-stock group within the broader Zacks Consumer Discretionary sector. The industry currently carries a Zacks Industry Rank #79, which places it in the top 32% 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 impressive 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 Sector & S&P 500

The Zacks Furniture industry has underperformed the broader Zacks Consumer Discretionary sector and the Zacks S&P 500 Composite over the past year.

Over the past year, the industry has declined 20.4% against the broader sector’s 2.8% rise. The Zacks S&P 500 Composite has risen 18.2% in the same time frame.

One-Year Price Performance

Furniture Industry's Current Valuation

On the basis of the forward 12-month price-to-earnings (P/E), which is commonly used for valuing furniture stocks, the industry is currently trading at 10.12X compared with the S&P 500’s 23.11X and the sector’s 18.24X.

Over the past five years, the industry has traded as high as 15.03X and as low as 8.14X, with the median being 10.48X, as the chart below shows.

Industry’s P/E Ratio (Forward 12-Month) Versus S&P 500

Industry’s P/E Ratio (Forward 12-Month) Versus Sector

3 Furniture Stocks to Keep an Eye On

We have selected three stocks from the Zacks universe of furniture stocks that have impressive growth prospects amid volatility.

La-Z-Boy: Based in Monroe, MI, this company makes and sells upholstery furniture worldwide. La-Z-Boy’s growth is being driven by a combination of disciplined retail expansion, portfolio optimization and supply-chain transformation. The company continues to expand its company-owned retail footprint through new store openings and acquisitions, including a 15-store deal in the Southeast that adds scale in attractive markets and delivers immediate sales and profit accretion. Growth is also supported by improving written sales trends, stronger wholesale performance, and expanded distribution partnerships that increase brand reach. At the same time, La-Z-Boy is sharpening its focus on its core North American upholstery business by exiting non-core operations, which should lift margins. Ongoing investments in a streamlined distribution and home-delivery network further enhance efficiency, customer reach and long-term profitability.

La-Z-Boy— a Zacks Rank #1 (Strong Buy) stock — has lost 12.8% in the past year. Nonetheless, estimates for LZB’s fiscal 2026 earnings have increased to $2.65 from $2.46 per share over the past 60 days, depicting analysts’ optimism about the company’s prospects. Also, LZB’s earnings topped the consensus mark in two of the last four quarters and missed on the other two occasions, with the average surprise being 6.4%. The company’s trailing 12-month ROE is 11.2%, higher than the industry’s 4.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Price and Consensus: LZB

Bassett: Based in Bassett, VA, Bassett designs, manufactures and sells home furnishings across the United States. The company is benefiting from continued innovation across its product portfolio, including refreshed whole-home collections, expanded custom upholstery offerings, and growing traction in outdoor furniture. Strong execution at company-owned retail stores, aided by refined marketing initiatives and an improved omnichannel customer experience, is also contributing. The expansion of the Bassett Custom Studio concept is deepening customer engagement and reinforcing the brand’s custom-design positioning. Additionally, a largely domestic manufacturing base provides supply-chain flexibility, while disciplined cost control, operational efficiencies and selective pricing actions are helping translate demand into improved profitability despite a challenging housing environment.

Bassett — a Zacks Rank #3 (Hold) stock — has gained 17.9% in the past year. Earnings estimates for 2026 have remained unchanged at $1.09 per share over the past 60 days. The Zacks Consensus Estimate for the 2026 EPS indicates an improvement of 34.6% from the year-ago level. Also, Bassett’s earnings topped the consensus mark in two of the last four quarters, with the average surprise being 332.2%. The company’s three-to-five year expected EPS growth rate is 16%.

Price and Consensus: BSET

MillerKnoll: Based in Zeeland, MI, this company designs, manufactures and sells interior furnishings worldwide. A combination of strategic retail expansion, product innovation and improving demand across its contract businesses has been encouraging for MillerKnoll. The company is expanding its physical store footprint and strengthening brand awareness, supported by a broader product assortment and accelerating e-commerce engagement. In contract markets, momentum is benefiting from the return-to-office trend, increased workspace refresh activity, and strength in resilient end markets such as healthcare. Ongoing investment in new product launches is generating strong interest from the architecture and design community, while international growth is supported by showroom expansion and deeper dealer partnerships. Together, these initiatives are enhancing customer engagement, expanding market reach, and supporting sustainable long-term growth.

MillerKnoll— a Zacks Rank #3 stock — has lost 16.3% in the past year. Earnings estimates for fiscal 2026 have increased to $1.93 from $1.87 per share over the past 30 days. Also, MillerKnoll’s earnings topped the consensus mark in three of the last four quarters and met on one occasion, with the average surprise being 25.6%. The company’s three-to-five year expected EPS growth rate is 12%. It has a VGM Score of A.

Price and Consensus: MLKN