Bob's Discount Furniture is expected to report in-line Q1 results, but channel checks point to softer category demand and rising costs, which could pressure the stock in the near-term, especially with two quarters of tough comparisons ahead, RBC Capital Markets said in a note emailed Monday.

For Q1, the firm models comparable sales growth of 1.3%, implying decent market share gains versus the category, which declined by low-single-digits during the quarter, according to the note.

Transaction data supports management's view that relative Q1 weakness was isolated to January and February due to winter storms and improved later. RBC said its channel work suggests that the overall category slowed in April.

The brokerage thinks Bob's might benefit from higher tax refunds year-over-year and notes that management attributes comp outperformance in the past year partially to improved conversion thanks to a new retail operating system launched in 2024's Q4.

The company will report Q1 results before the market opens on Thursday.

RBC maintained an outperform rating on Bob's Discount Furniture and lowered the price target to $18 from $25.

Price: 10.41, Change: -0.66, Percent Change: -5.96