The affordable furniture industry hasn’t yet buckled under the weight of soaring gas prices and waning consumer confidence.
Bob’s Furniture CEO Bill Barton told Yahoo Finance’s Opening Bid on Wednesday that the company has seen increased store traffic this month. He added that the initial influx of tax refund checks is proving to be a boost for his business and that customers are trading up to higher-priced offerings.
“The business is doing very well, very strong,” Barton said. “There’s not really any tailwinds going on in the furniture industry. It’s been pretty flat for a while. So the growth that you’re seeing from us is really intentional.”
Barton says Bob’s is capturing a higher-income consumer pulling in at least $150,000 a year. The company released its latest quarterly earnings on Wednesday morning.
Net sales for the fourth quarter hit $648.8 million, an 8.2% increase year over year. The company significantly outperformed Wall Street’s expectations for profitability, posting EPS of $0.35 against analyst estimates for $0.11.
The wildcard for Bob’s: surging transportation costs. Barton says it has yearlong contracts with ocean freight carriers, even as the Iran war has closed down the Strait of Hormuz.
“We have contracts with our delivery partners. So we’re relatively protected on that level,” he added. “We’ve seen a few fuel surcharges come through already, but it’s pretty muted. But we have a playbook to deal with this … We know how to deal with it and maintain our value proposition.”
Read more: How oil price shocks ripple through your wallet, from gas to groceries
Bob’s Discount Furniture went public on the New York Stock Exchange on Feb. 5. The initial public offering was priced at $17 a share and raised $331 million for the company.
The core of Bob’s success is a model that defies traditional furniture retail tropes. While competitors often rely on “70% off” blowouts and high-pressure sales tactics, Bob’s operates on a strictly transparent philosophy. That includes such retail hallmarks as everyday low prices. The model removes the need for consumers to haggle or wait for sales.
The company also offers a highly curated assortment and sells only its own brand in its stores.
It operates its own distribution centers and was early to move production out of China before the onset of Trump tariffs. The long-term goal is to reach 500 Bob’s stores in the US, up from about 205 today. It’s currently making a big expansion push into North Carolina.