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RH shares slide after company lowers its outlook for the yr

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High-end furniture chain RH on Wednesday slashed its outlook for 2022 revenue, anticipating consumer demand for its products will proceed to melt within the back half of the yr.

The corporate now sees annual sales down between 2% and 5%, compared with prior expectations that saw sales flat to up 2%. It said it still anticipates revenue in its fiscal second quarter to be down between 1% and three% from prior-year levels.

RH shares fell nearly 8% in after-hours trading following the discharge. The stock had already fallen almost 3% during regular trading, closing at $237.32.

“With mortgage rates double last yr’s levels, luxury home sales down 18% in the primary quarter, and the Federal Reserve’s forecast for one more 175 basis point increase to the Fed Funds Rate by yr end, our expectation is that demand will proceed to slow all year long,” CEO Gary Friedman said in a press release.

He added that the subsequent several quarters will pose a short-term challenge for the corporate, as RH laps a period of heightened demand in the sooner days of the Covid pandemic.

The corporate warned in early June that it was seeing softening demand pegged to the Russian invasion of Ukraine. Still, Friedman said on the time that 2022 was poised to mark the start of a latest growth chapter for the business.

RH’s revenue within the three-month period ended April 30 totaled $957 million, up from $861 million within the prior-year period.

RH also said Wednesday that it has not repurchased any stock since announcing on June 2 the expansion of its common stock repurchase plan.

The retailer’s shares have fallen 55% yr thus far, as of Wednesday’s market close.

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