Guotai Haitong: American furniture wholesaler passive destocking, head companies' excess profits come from segmentation industry positioning, etc.

Guotai Haitong released a research report stating that American furniture retailers are actively replenishing their inventory, and wholesalers are entering a passive destocking cycle by September 2025. If the United States continues to lower interest rates, real estate, which is highly correlated with interest rates, is expected to continue to recover, retail sales are expected to continue to improve year-on-year, and with inventory-to-sales ratios at historical lows, there is potential for restocking to be initiated, directly driving up furniture import amounts and reviving midstream manufacturing orders. The extra profits of leading companies in the export chain often come from precise industry segmentation, accumulated cost control know-how, and the ability to differentiate products and operate channels. Guotai Haitong's main points are as follows: Position of the furniture inventory cycle in the United States: Retailers actively replenishing inventory, wholesalers passively destocking 1) Retailers: From April 2025 to July 25, sales growth exceeded inventory growth, placing them in an overall destocking cycle. In addition, as the inventory amount increased year-on-year but could not keep up with the growth in sales, they are in a passive destocking cycle. In August-September 2025, inventory growth exceeded sales growth year-on-year and was positive, entering an active restocking cycle. 2) Wholesalers: from October 2024 to August 25, inventory growth exceeded revenue, placing them in an overall restocking cycle. In addition, as the inventory amount increased year-on-year, and higher than the growth in sales, they are in an active restocking cycle. In September 2025, revenue growth exceeded inventory growth, with inventory increasing in real terms, entering a passive destocking cycle. Performance of furniture brands and channel retailers' inventory confirms trends in retail and wholesale data Looking at the latest financial reports of furniture brands and channels, the inventory-to-sales ratios of home brand retailers are generally at historical lows, which align with the trend of retailers destocking more than restocking since May 2023. The performance of furniture and building material channel retailers' inventory varies, but overall the inventory levels are higher than brand retailers, which is consistent with the trend of wholesalers restocking more than destocking since September 2024. In addition, Home Depot's latest inventory-to-sales ratio has returned to historical normal levels, suggesting a further willingness to restock but still suppressed by demand. In Q3 2025, inventory growth exceeded revenue, and the inventory-to-sales ratio increased compared to the previous quarter, indicating a restocking cycle for the company. The inventory-to-sales ratio in Q3 2025 is close to the levels in Q3 2023, higher than in Q4 2024, essentially returning to historical normal levels. Improvement path for home demand Real estate leads the way, accelerating retail sales, and initiating restocking. If the United States continues to lower interest rates, real estate, which is highly correlated with interest rates, is expected to continue to recover, retail sales are expected to continue to improve year-on-year, and with inventory-to-sales ratios at historical lows, there is potential for restocking to be initiated, directly driving up furniture import amounts and reviving midstream manufacturing orders. Risk warning: Significant fluctuations in raw material prices, changes in international trade formats, etc.