Is the Consumer Really Coming Back?

Originally published July 7, 2026. This version was rebuilt from primary sources for the FIN archive, and the facts are as of that date.

The comeback people kept waiting for showed up in pieces in the spring of 2026. Sheets, towels and decor started moving again at the big chains. Sofas, dining sets and new houses did not.

The short version

• Target's home furnishings and decor sales grew a little in the first quarter after a long run of declines.
• Macy's raised its full-year outlook, and Kohl's posted a smaller decline than it had in a while.
• Bed Bath & Beyond Inc. is betting that services like mortgages and installation can sit alongside its stores.
• Builder confidence stayed stuck near levels last seen during the foreclosure crisis.
• A new sleep study gives mattress salespeople a better opening question.

Soft home moved first

Target's own sales breakdown shows home furnishings and decor at $3.24 billion for the quarter, a hair above the same quarter of 2025. On its earnings call, management said it would swap out most of its decorative accessories in the second quarter and add Threshold shop-in-shops to about 200 stores.

Macy's raised its full-year outlook after another quarter of comparable sales gains, with Bloomingdale's posting a record first quarter. Kohl's sales were still down, but its comparable sales decline was small and it kept its outlook for the year.

None of that is furniture. Textiles and decor are cheap enough to buy on a whim. A sofa is a planned purchase, and planned purchases wait on confidence and housing. Furniture stores should expect to be later in line than the department store headlines suggested.

A home retailer that wants to sell the house too

Bed Bath & Beyond Inc., which also owns Overstock and Kirkland's Home and had a deal pending for The Container Store, reported its first real revenue growth in 19 quarters. In its shareholder letter the company described adding services around owning a home, from brokerage, mortgage and title to installation and renovation. Most of its money still came from retail.

It's an unproven idea. It is also a big competitor trying to show up long before a customer walks into a furniture store, at the moment they get the keys.

Builders were still gloomy

The NAHB and Wells Fargo builder index fell to 35 in June, the 14th month in a row below 40. NAHB said a streak like that hadn't happened since 2011 and 2012. More builders were cutting prices and most were using incentives to close sales.

Moves drive the biggest furniture tickets. With new construction this stuck, the move-in buyer stayed scarce, and the shopper replacing a worn sofa mattered more than ever. We came back to that idea in Move-In Furniture Tickets Are Drying Up.

A better question on the mattress floor

The National Sleep Foundation and Tempur-Pedic released a study that combined a national survey with Sleeptracker-AI data. Most adults said they sleep less than the recommended amount, and most said staying asleep is the hard part. Stress, discomfort, heat, noise, light and snoring were the main things waking people up.

That points mattress sales away from "how many hours do you get" and toward "what wakes you up." A shopper who sleeps hot needs a different bed than one with a sore shoulder, and asking the question is how you earn the higher ticket.

Where things stood in early July

Retail's recovery was real but uneven. Soft home was ahead, furniture was behind, and housing wasn't going to help soon. Stores that sold to the replacement buyer and trained their people to diagnose problems had the best shot at the second half.

Related on FIN

• Move-In Furniture Tickets Are Drying Up
• New Home Sales Jumped in August. Mortgage Rates Crossed 7%.

Sources

• Target Corporation, Disaggregation of net sales, Q1 2026
• Target Corporation, Q1 2026 earnings call transcript, May 20, 2026
• Macy's, Inc., First quarter 2026 results release
• Kohl's Corporation, First quarter fiscal 2026 results release
• Bed Bath & Beyond, Inc., First quarter 2026 results release
• Bed Bath & Beyond, Inc., Q1 2026 shareholder letter
• National Association of Home Builders, June 2026 Housing Market Index release
• National Sleep Foundation and Tempur-Pedic, Two Views of the Night release, June 30, 2026