Q1 2026 INDUSTRY REPORT

Q1 2026 Report | Home & Kitchen

Revenue is up. Margins are down. What's really happening in Home & Kitchen?

Get Q1 2026 benchmarks on pricing, conversion, media efficiency and supply chain for Home & Kitchen brands:

March margins fell below 5%. See what's driving the squeeze. Download the report.

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Key takeaways

Revenue growth is masking a margin collapse: Ordered revenue rose ~5% YoY while gross margin per unit fell six to eight points, with March falling below 5%. This volume comes at a steep cost to per unit profitability.

Pricing discipline is holding at the shelf: ASPs firmed ~2% YoY and discounts eased ~1pp, an outlier in a quarter where most categories saw structural ASP erosion from mix shift toward lower priced items.

Conversion is offsetting a shrinking top of funnel: Glance views fell ~10% YoY while CVR surged ~14%, keeping ordered units up ~3% YoY. The traffic to conversion divergence points to higher intent visitors, but sustained view declines limit future unit growth.

Media efficiency hit a two year high on reduced spend: Ad spend dropped ~17% YoY (Sponsored Brands down ~45%, Sponsored Products down ~8%), CPC edged down ~5% and March ROAS approached 10x.

Supply chain is the clearest bright spot: On hand inventory up 36% YoY, PO fill rate at ~85% in March (up ~2pp YoY), Rep OOS rates nearly halved and OOS revenue loss fell ~1pp YoY.

Q2 mandate is profitability protection: Address the unit margin collapse before it compounds and reinvest selectively in traffic acquisition to keep the top of funnel from narrowing further.