Structure of the Household Durables Industry
The household durables industry is heavily tied to the health of consumer disposable income, new home sales, and housing renovation (replacement demand). The group faces stiff international competition, where labor costs may be cheaper, and pressure from discount retailers that continue to improve the quality of their product offerings. The premium mattress segment continues to enjoy a nice demographic tailwind, as it caters to a growing number of aging, more health-conscious customers willing to pay up for a good night’s rest. Still, all constituents deal with volatile input costs. We’re neutral on the group.
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