RH stock falls after company lowers full-year outlook

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Luxury furniture chain RH on Wednesday cut revenue forecast for 2022anticipating that consumer demand for its products will continue to decline in the second half of the year.

The company currently sees a decline in annual sales of 2-5% compared to previous expectations, according to which sales have not changed and increased by 2%. The company said it still expects fiscal second quarter revenue to be down 1-3% year-over-year.

RH shares fell nearly 8% during after-hours after the release. The stock has already fallen nearly 3% during normal trading, closing at $237.32.

“With mortgage rates doubling from last year, luxury home sales fell 18% in the first quarter, and the Federal Reserve predicts another 175 basis points increase in the federal funds rate by the end of the year, we expect demand will continue to slow throughout the year. this year,” CEO Gary Friedman said in a statement.

He added that the next few quarters will be a short-term issue for the company as RH goes through a period of high demand in the early days of the Covid pandemic.

In early June, the company warned that it was seeing a decline in demand linked to Russia’s invasion of Ukraine. However, Friedman said at the time that 2022 would be the start of a new chapter of business growth.

RH’s revenue for the three-month period ending April 30 was $957 million, up from $861 million the previous year.

RH also said on Wednesday that it has not repurchased any shares since the June 2 announcement of an expansion of its common share repurchase plan.

The retailer’s shares are down 55% year-to-date as of Wednesday’s market close.

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