US Furniture Industry Faces Tariffs and Soft Demand
The US home furnishings sector is confronting significant headwinds from trade policy and a cooling housing market. Tariffs have risen from 2% to nearly 10% since 2024, adding an estimated $1,000 in annual costs per household. This pressure is compounded by a 9.3% month-over-month drop in pending home sales, a key driver of furniture demand, leading companies like Leggett & Platt to report sales declines and implement cost controls.
- Tariffs on upholstered wooden furniture and kitchen cabinets/vanities were set at 25% in October 2025; planned increases to 30% and 50% respectively have been postponed until January 1, 2027. - In response to trade policy, some firms like HBF have added temporary surcharges of 3.5% to furniture items rather than permanently raising base prices. - The slowdown is not uniform across categories, as the high-end upholstery market, often domestically made and sold to less price-sensitive consumers, has performed well. - Leggett & Platt's Bedding Products segment, its largest division, saw a 10% organic sales decline in the fourth quarter of 2025, attributed partly to changes in retailer merchandising. - Despite an 11% drop in Q4 2025 sales, Leggett & Platt improved its balance sheet, reducing its net debt to adjusted EBITDA ratio from 3.76x to 2.36x over the year. - Shifting consumer habits show a preference for smaller, multi-functional, and modular furniture due to smaller living spaces and the high cost of housing. - While furniture sales have slowed, spending on lower-cost home décor is on the rise as consumers still seek to update their living spaces. - Gen X households contribute a higher share of total furniture spending compared to their share of households, indicating greater average spending per household than other generations.
