Shares of RH (RH) sank Friday, a day after the upscale home furnishings retailer posted a bigger-than-expected loss and gave soft guidance as the tight housing market squeezed demand.
The company formerly known as Restoration Hardware reported an adjusted first-quarter loss of $0.40 per share, wider than estimates. Revenue fell 1.7% year-over-year to $727.0 million, although that beat expectations.
Chief Executive Officer (CEO) Gary Friedman wrote in a letter to shareholders that the company faced “the most challenging housing market in three decades,” and that it anticipates “business conditions to remain challenging until interest rates ease and the housing market begins to rebound.”
He explained that may take some time, since the Federal Reserve’s efforts to fight inflation “will continue to weigh on the housing market through the second half of 2024 and possibly into 2025.”
However, Friedman said that RH believes demand trends will accelerate throughout this year.
The company predicts current-quarter sales growth in a range of 3% to 4%, short of forecasts. It reiterated its outlook of full-year revenue to increase by 8% to 10%.
RH shares tumbled more than 16% as of 10 a.m. ET Friday to $231.34, their lowest level in seven months.
Tags :
Earnings, RH
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