Morgan Stanley Finds Amazon (AMZN) on Top Following Home Furnishing Survey - (WMT) (BBBY) (HOME) (TCS) (PIR)

According to Morgan Stanley's AlphaWise Home Furnishings survey, spending over the last 3 months increased to $149 per shopper, +15% YoY and was 12% above the average over the life of our survey. Wave 18 points to the most bullish
home furnishings spending picture in over 3 years. However, an increased proportion of the spending has moved to online sales. Amazon.com, Inc. (NASDAQ: AMZN) jumped Wal-Mart Stores, Inc. (NYSE: WMT) as market share leader with 17.2%.

Morgan Stanley analyst Simeon Gutman commented, "AMZN picked up an incremental 20 bps of market share to 17.2%, jumping WMT which slipped 60 bps to 16.8%, while TGT (9.8%) and BBBY (9.7%) remain well behind. 14% more customers shopped AMZN at least 1x/month vs. a year ago, the biggest spike among all retailers, while visits per year were up 20% from ~11 to ~13. As the % of consumers shopping online has increased (68% vs. 56% a year ago), AMZN has clearly benefitted more than traditional brick & mortar retailers. For context, home furnishings include cookware, kitchen appliances, towels, bath mats, pillows, blankets, etc."

As for other home furnishing stocks, Morgan Stanley remains cautious or on the sidelines. Williams-Sonoma (NYSE: WSM), At Home Group (NASDAQ: HOME) and The Container Store Group (NYSE: TCS) remains at an Equal Weight rating. An Under Weight rating as been reiterated for Bed Bath & Beyond (NASDAQ: BBBY), and Pier 1 Imports (NYSE: PIR), as the deflationary presence of Wayfair, rising payroll and fulfillment expenses, increasing sales diffusion across competitors, and an ongoing channel shift to e-commerce limit earnings growth for traditional brick and mortar home furnishing retailers.

Gutman's key conclusion for the AlphaWise Home Furnishings survey was "A solid spending backdrop for home furnishings over the past 3 months, rising spending intentions over the next 3 months, with greater sales shifting online (in particular, to AMZN)."

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