Michael Lasser, UBS equity research analyst, joins 'Money Movers' to discuss the impact of tariffs on furniture stocks and names that will do well in this environment.

Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

Global Tariffs

Furniture stocks experienced declines after President Trump threatened tariffs on the sector, affecting companies such as RH, Williams Sonoma, and Wayfair. The potential tariffs add complexity to an industry that has already faced challenges in recent years, leading to increased uncertainty among investors.

Analysts note that companies producing upholstered goods in the United States may be less affected, while those relying on overseas manufacturing for case goods could face more difficulties. Larger players and those with marketplace models, like Wayfair, as well as domestic bedding manufacturers such as Somnigroup, are seen as better positioned to navigate the potential changes.

Tariffs weigh on furniture stocks

Welcome back to money movers on CNBC President Trump's threats of furniture tariffs rattled stocks across the space names like our H Williams Sonoma and Wayfair all falling this morning as investors try to make sense of the potential impact and you can see there I mean our H is off by more than 5% as is Wayfair Our next guest covers the sector joins us now with his outlook. Let's bring in UBS equity research analyst Michael Lasser Michael good to talk to you There had to be some expectation though with as as many Announcements on tariffs that have been coming out of the White House that this was a real possible scenario Morning contest. I I think this was a real scenario But it does add to what is already a very complex circum set of circumstances for an industry That's been experiencing challenge for the last few years This is gonna just make the dynamics a little bit more complicated and a bit more uncertain from here And that's really what the stocks are pricing in this morning. Okay, so so who is most exposed to the tariff impact? Because I know a lot of the manufacturing for furniture has moved to the United States You are absolutely right that a lot of the upholstered products. So any of the goods that have cloth associated with them couches chairs Those similar type of items are already produced in the United States more what they call case goods tables other related Credences though type those types of items are more so produced overseas. So who's gonna win in this situation? Well, this is gonna be another dynamic that Forces some consolidation in the sector believe it or not Furniture and home furnishings retail is still very consolidated Very fragmented in the United States and it's going to push some consolidation as the large players are be able to better navigate through it Do you have a I was gonna say Michael do you have a prepared list of potential acquisition targets? I don't know if it's gonna be M&A Carl as as more so survival of the fittest Two names I would call out as better position Is number one Wayfair while the stock is down around 5% today that we think that's a mystery by the market and represents an opportunity Keep in mind that Wayfair is a marketplace model. It has a wide array of Sellers that it connects to buyers So it simply will enable the consumer to go wherever the most compelling Supply in the marketplace is and it takes a tinkering Based on its model. So it should be better position than many others and then another name We would highlight is Somnigroup Somnigroup Which is led By my partner Dan Silverstein. That's the largest bedding manufacturer and retailer in the United States Most beds mattresses in the United States are produced domestically So this should be another name that is more insulated from the terrorists than others. So those investors should sleep easier

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Tariffs weigh on furniture stocks

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