Thematic hub | Consumer discretionary | Consumer durables

What are consumer durables stocks?

The consumer durables subsector includes companies selling or manufacturing products that are intended for long-term use, typically at least three years, and which do not fall under a different subsector.

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Consumer durables companies manufacture and sell goods to households and businesses, and are responsible for items such as refrigerators, washing machines, furniture, or consumer electronics. A diverse sector, when defined broadly consumer durables stocks include home improvement retailers, electronics manufacturers, and car manufacturers. Some of these businesses are typically considered as their own sectors or subsectors, but all share investment characteristics in common since they are involved in the trade of non-essential, long-term purchases.

Consumer durables stocks may suffer during economic downturns.

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Investing in consumer durables stocks

Consumer durables companies are cyclical stocks, as they sell items that are non-essential, unlike consumer staples, where purchase decisions can easily be delayed. When economic conditions are strong and employment rises, consumers increase purchases of big-ticket items they may have deferred during uncertain periods. Like other subsectors such as tourism, consumer durables businesses have high growth potential during periods of sustained growth in disposable income. However, the sector’s cyclical nature means these companies often experience significant revenue declines during economic downturns, as consumers postpone major purchases and instead extend the life of existing products. Housing market conditions particularly influence demand for appliances, furniture, and home improvement products, creating performance correlations with property markets and interest rate cycles; when more people move house, furniture and appliance sales increase. Within consumer durables, different companies target the budget and luxury markets, with the latter experiencing more stable demand and often higher valuations.

Sector Highlights

Global market size: Consumer durables is a difficult sector to measure with precision, since some subsectors (notably homebuilders, consumer tech, and automobile stocks) are usually considered in separate sectors. Defined broadly, the global market is worth at least $1.2 trillion. The US consumer durables stock sector has a market capitalisation of $270 billion. .
Top stocks: Apple and major car manufacturers like Tesla are technically durable goods stocks, however the following are single-sector durables goods stocks; RH, Whirlpool, Garmin
Important themes: Disposable income and economic growth, tariffs, consumer behaviour

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Important consumer goods stocks

Pricing and sentiment does not represent ADSS data or market view.

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Market trends impacting consumer durables stocks

The ongoing Trump tariffs have seen immense disruption to the consumer durables market, with white goods such as washing machines and fridges specifically cited as industries the administration would like to see reshored to the USA. Since the 1980s or before, manufacturers of simple household appliances have relied on cheap transport and low overseas wage bills to remain profitable in the US market. The Trump administration is determined to see these industries and associated manufacturing jobs return to the USA, with their chosen tool of blanket and targeted tariffs causing massive disruption to established business models.

Tariffs and passing on costs

Trump’s 2025 tariffs have increased costs for manufacturers with overseas production whilst creating opportunities for domestic producers. The new tariff system ensures favourable treatment for US-based manufacturing plants and assistance to overseas producers who relocate. That means the tariff impact varies considerably across the sector, with premium appliance and electronics brands demonstrating greater pricing power to pass through cost increases compared to cheaper furniture and home goods companies, where price-sensitive consumers readily switch to alternatives or defer purchases entirely. In the long-term, US consumers will have to accept the increase in prices caused by either tariffs or the costs of reshoring, but as the market adjusts to higher prices some consumers may choose to delay expenditure.

Technology

Consumer durables companies make products that were all at one-point new innovations, and which are periodically updated or improved. When significant improvements are made to the design or functionality of household goods there is often a rush to sell the updated product, as consumers replace the now-outdated older models. Some recent examples include the introduction of smart home technology, energy-efficient appliances, and entertainment systems such as televisions. This creates some overlap between the broader sector and tech stocks, though generally speaking consumer durables companies are far less reliant on innovation for their core business and its impact is felt more sporadically. Many durables manufacturers have recurring revenue streams through extended warranties, maintenance contracts, and replacement parts, providing some stability alongside their cyclical core businesses.

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FAQs

What makes consumer durables stocks attractive to investors?

Consumer durables stocks are cyclical, and offer significant growth potential during economic expansion periods, when these companies benefit from increased consumer spending on non-essential, long-lasting goods. The durable goods sector covers a diverse group of industries including home improvement stocks, automotive stocks, and electronics stocks, providing investors with broad exposure to consumer spending trends. When disposable income rises, consumers typically increase purchases of big-ticket items like appliances, furniture, and consumer electronics, driving revenue growth for companies in this sector. Additionally, many consumer durables companies maintain recurring revenue streams through extended warranties and maintenance contracts, offering some stability alongside their cyclical nature. The sector’s sensitivity to economic cycles means investors can potentially capitalise on both growth phases and recovery periods, making consumer durables stocks an attractive option for those seeking exposure to consumer spending patterns.

How do furniture stocks and home furnishing stocks perform compared to other consumer durables?

Furniture stocks and home furnishing stocks within the consumer durables market typically exhibit strong correlation with housing market conditions and demographic trends, often outperforming other durable goods during periods of high new home completions or real estate sales. When people move house, they usually buy new furniture, so the profits of these businesses is directly linked to turnover in residential property. However, furniture stocks tend to be more sensitive to interest rate changes than electronics stocks or automotive stocks, as mortgage rates directly impact housing demand and subsequently furniture purchases. The home furnishing sector also demonstrates varying performance across different market segments, with luxury goods stocks showing more resilience during economic downturns compared to budget-focused retailers. Because furniture, even by the standards of durable goods, is often an extremely long-lasting purchase, these companies may have less ongoing replacement business than other consumer durables stocks.

What impact do tariffs have on the consumer durables market?

The Trump administration’s tariff policies have created significant disruption across the consumer durables market, particularly affecting companies that rely on overseas manufacturing for low-effective production, a practice followed by the majority (especially in the budget segment) of the industry. Consumer electronics stocks and automotive stocks have experienced varying impacts depending on their manufacturing locations and supply chain structures, with companies maintaining US-based production facilities generally benefiting from more favourable treatment. The tariff impact varies considerably across different segments of the consumer durables market, as premium appliance and electronics brands demonstrate greater pricing power to pass through cost increases compared to price-sensitive furniture and home goods companies. Long-term implications suggest that US consumers will face higher prices for durable goods, either through direct tariff costs or increased expenses associated with reshoring manufacturing operations, potentially affecting demand patterns and investment attractiveness in the sector