Today is February 20th, 2026.

And welcome back to Furniture Industry News.

I'm glad you're here.

If you're in the furniture business, whether you're running stores, managing sourcing, working in product development, or watching the category from the manufacturing side, there's a lot happening right now that's worth paying attention to.

This week we're seeing some clear patterns emerge around retail traffic, brand performance, materials, innovation in case goods, and and what tariffs are still doing to global sourcing.

And then, of course, Wayfair continues to show that the online channel isn't slowing down as much as some people expected.

Let's start with retail traffic, because the store visit data coming out of 2025 paints a pretty interesting picture.

Home goods had a strong year According to Placer AI, HomeGoods saw year over year traffic growth in every quarter of the calendar year.

Visits were up 8.5% in the first quarter, up 11.2% in the second quarter, up 9.1% in the third quarter, and up 6.3% in the fourth quarter.

That's consistent momentum all year long.

But what really stood out was HomeSense, which is HomeGoods sister chain.

HomeSense, posted even stronger traffic growth across the board.

Visits were up 25.4% in the first quarter, up 22.2% in the second quarter, up 19.4% in the third quarter, and up 11.9% in the fourth quarter.

That's not a small difference.

HomeSense outpaced home goods by a wide margin in every quarter.

Placer AI pointed to a reason that probably feels familiar to anyone working in this industry.

They said that even though many consumers may not be financially positioned for major remodels right now, we're five years past the pandemic and a lot of people still spend significant time at home, including those who work from home.

So instead of doing big projects, many are refreshing their spaces.

That could mean a new rug, a new accent chair, a new lamp, or just seasonal decor.

And off price retailers seem to be capturing a lot of that activity now.

Walmart had a different story.

Overall, Walmart visits were basically flat year over year across the entire year.

But what matters is the trend line.

Walmart store traffic softened during the summer months, but starting in October, it began making gains each month.

In the fourth quarter, Walmart traffic rose 2.3% year over year.

October was up 3.1%, November was up 2.4%, and December was up 1.4%.

And then in January, the momentum increased again, with traffic up 4.1% year over year.

Placer AI noted that Walmart's recent performance puts CEO John Furner in a position of strength.

They said traffic and sales gains support his focus on value, digital growth and higher margin revenue streams like advertising.

But they also emphasized that maintaining store performance and margins will be critical as those efforts scale.

Target, on the other hand, is still struggling.

Traffic declined in all but one of the final six months of 2025.

October was the only month with growth and even then it was minimal with store visits rising only 0.8%.

December was worse with traffic falling 4.2%.

Placer AI pointed out that weekends have been a particular problem for Target.

Weekend traffic declines were steeper than weekday declines, and that's important because weekends tend to represent more discretionary shopping trips, more browsing and more non essential purchasing.

If those trips are down more than weekday trips, it likely signals that Target is being hit hardest where it matters most.

They suggested that this traffic pattern helps explain why Target has been focusing so heavily on improving assortment and the in store experience as part of its efforts to rebuild momentum.

Now let's move over to company performance because La Z Boy reported some notable results.

La Z boy posted a 4% increase in delivered sales for the third quarter ended Jan. 24.

The company said it is making significant progress on its strategic initiatives and the retail segment was clearly a bright spot.

Retail written sales were up 11% and delivered sales were also up 11%.

That included four new company owned stores opened during the quarter and 16 new company owned stores added over the past 12 months.

The wholesale segment was more modest with delivered sales up 1%.

But the company also reported that it completed the Western US Phase of its distribution and home delivery transformation project which which is a major operational milestone.

Not everything was positive.

Joybird sales declined 13%, which partially offset some of the gains elsewhere.

Financially, La z Boy generated $89 million in operating cash flow for the quarter, which was a 57% increase compared to the same period last year.

On the strategic side, the company said it successfully integrated its 15 store acquisition in the Southeast, announced a planned closure of a UK manufacturing facility, completed the sale of its Kincaid upholstery business and signed a letter of intent for the sale of its WHO wholesale case goods businesses.

American Drew and Kincaid CEO Melinda Whittington said the quarter's results show the company is strengthening its enterprise and increasing agility even in a challenging consumer environment.

She also highlighted that the company has added a net 29 company owned stores which now represent roughly 60% of the company's total network.

She emphasized that expanding La Z Boy's direct to consumer reach remains a key pillar of the company's Century vision strategy.

She also noted that La Z Boy has now delivered a seventh consecutive quarter of growth in its core North America wholesale business.

One of her more interesting comments was about the company's vertically integrated model.

She said that about 90% of La Z Boy's upholstered products are produced in the United States, and she called that a key competitive advantage, especially in a challenging macro environment.

Looking ahead, La z Boy expects fourth quarter sales to fall between 560 million and $580 million.

The company expects adjusted operating margin to land between 7.5% and 9%.

Their outlook reflects a cautious view of the macro environment, along with short term impacts from adverse weather events now shifting from performance to product development.

There was also a strong update on what's happening in Case Goods materials For years, a lot of the conversation in case goods has centered around solid wood, but suppliers are saying much of the innovation in today's middle market is happening outside of wood.

Advances in engineered materials, hybrid construction and surface technology are allowing suppliers to improve design and durability while protecting margins.

Four trends stood out.

First, melamine and laminates are improving dramatically.

Suppliers say these materials are no longer viewed as strictly entry level because quality has improved so much over the last five to ten years.

Crystal Wynne from Coaster Fine Furniture said paper and melamine construction has come a long way and will continue to become more realistic in look and feel as technology improves.

Paul Comrie from Elements International said manufacturers can achieve better looks now than ever before and that materials innovation has evolved to the point where suppliers can deliver the look for a lot less.

Second, faux stone and hybrid surfaces are being used to create differentiation.

Suppliers are leaning into faux marble, engineered stone looks and mixed material construction.

Comrie said Elements is working with faux marbles, high density three dimensional paper and faux leathers that pass both the eye test and the hand test.

Chris Pittman from Linon Home Decor said the goal is to avoid competing on price alone.

He pointed out that retail floors today are filled with the same basic colors gray, black, brown and white, and that being different helps products stand out.

Third, upholstery is increasingly shaping bedroom case goods.

Meridian Furniture's Moet Rosilio said their bed story is mostly upholstered and that the company has quadrupled its case goods offerings in less than two years.

Wynn added that upholstery and melamine are being used together more often to elevate promotional bedroom offerings.

She said melamine is now being used alongside solid wood to create more dynamic shapes and more statement driven design, and fourth engineered construction is improving scale and function.

Substrates like MDF honeycomb panels and veneer overcore construction are helping suppliers scale up case goods while maintaining shipping efficiency and assembly ease, Rosilio said.

Meridian's case goods category has expanded rapidly, including dresser styles growing from about 5 to 23.

Pitman also noted that no tools assembly and quick, easy assembly is becoming the expectation in ready to assemble furniture and that smaller packaging must still deliver a good consumer experience.

The broader takeaway is that non wood materials are no longer just alternatives, they're becoming essential tools for product development strategies.

Now if you're on the sourcing side of the business, the trade update this week is worth noting.

In 2025, U.S. imports of goods and services rose 4.7% to $4.3 trillion.

Exports climbed 6.2% to 3.4 trillion.

The total trade deficit narrowed slightly to $901 billion, down just slightly from 903 billion in 2024.

But the key point is the deficit in physical goods reached a record high in 2025.

The slight improvement overall was driven entirely by a widening surplus in business services.

The data also highlighted how tariffs have reshaped trade flows.

High tariffs and shifting policy timelines caused companies to stockpile goods ahead of new levies and then pull back once duties took effect.

The trade deficit widened sharply at year's end.

In December alone, The gap jumped 32.6% as imports increased and exports declined.

The goods trade deficit with China fell to $202 billion as sourcing shifted away from China.

But deficits with Vietnam and Mexico grew as companies diversified supply chains.

The deficit with the European Union became larger than the deficit with China.

The report also pointed to transshipment and supply chain rerouting.

Some goods shipped to the United States from other Asian countries may still be produced by Chinese owned companies operating in third countries.

That means some of the shift away from China may be more about rerouting than true reduction in Chinese production influence.

Finally, let's wrap with Wayfair because they are clearly positioning themselves for an aggressive year.

Wayfair ended 2025 with strong fourth quarter performance.

Q4 net revenue rose to $3.3 billion, up 7.8% when excluding the impact of the company's exit from Germany.

For the full year, total net revenue reached $12.5 billion and an increase of $606 million.

Excluding Germany, revenue growth was 6.1%.

Wayfair said it achieved its goal of returning to growth in 2025 and leadership is calling 2026 the year of acceleration.

CEO Neeraj Shah and co Chairman Steve Kahne said the company moved from a 0% growth rate to 7% growth despite a choppy macro environment.

Their 2026 plan focuses on three buckets, improving selection, price availability and speed scaling business initiatives that meaningfully contribute and leveraging technology to support operations, suppliers and customer engagement initiatives include Wayfair Verified, Wayfair Rewards, Physical Stores, Castlegate Logistics, the mobile app and Wayfair Professional.

They also introduced a new delivery program called Wayfair Delivery Plus.

They plan to expand support for kitchen and bath renovation projects and and improve financing options for customers at both the purchase and project level.

AI was a major theme.

Wayfair said staff are using large language models for chatbot applications, developers are using code assistance with the percentage of LLM assisted code increasing and LLMs are being used to improve customer service, product search, product catalogs, advertising and imagery.

Wayfair also said they are moving into agentic AI systems and that can chain actions together and handle more complex reasoning including subjective workflows like assessing damage based on a photo or curating a design project.

They are also building customer design interfaces through AI Designer and Muse and working to reinvent how they work with suppliers and partners by reducing process work.

On the financial side, Wayfair's Q4 US net revenue rose 7.4% to $2.9 billion.

International net revenue rose 3.7% to 395 million.

Gross profit was $1 billion representing 30.3% of net revenue.

Net loss was $116 million while adjusted EBITDA was 224 million.

For the full year, Wayfair posted gross profit of $3.8 billion or 30.2% of net revenue.

Adjusted EBITDA was 743 million.

Customer metrics also improved with last 12 month revenue per active customer reaching $586 up 5.6%.

Orders per customer increased slightly, average order value rose to $301 and mobile shopping represented nearly 65% of orders delivered for the first quarter of 2026.

Wayfair expects mid single digit growth and gross margins between 30 and 31%.

So overall today's news points to a furniture industry that's still adjusting but not standing still.

Retail traffic is shifting toward value and refresh driven shopping.

Manufacturers are leaning into material innovation to keep design strong without losing margin.

Tariffs continue to reshape, sourcing sometimes in complicated ways and major players like La Z Boy and Wayfair are pushing forward with expansion and strategic restructuring, even in an uncertain consumer environment.

That's the update for today.

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