Shares of RH (NYSE: RH) fell about 40% in early morning trade today after the company reported fourth-quarter results that missed Wall Street expectations as ongoing macroeconomic pressures weighed on performance.
The company reported Q4 earnings per share of $1.58, missing the consensus estimate of $1.89. Revenue came in at $812.4 million, falling short of the $828.2 million analysts had projected.
Despite the weaker-than-expected results, RH issued full-year fiscal 2025 guidance that pointed to revenue growth of 10% to 13% and an adjusted operating margin of 14% to 15%. For the first quarter, the company estimates revenue growth of 12.5% to 13.5%.
RH has faced sustained headwinds in the high-end housing and luxury goods market as elevated interest rates and softer consumer sentiment dampen demand. Still, the company reaffirmed its commitment to long-term expansion and brand positioning within the luxury lifestyle sector.
Following the earnings release, Citi downgraded RH (NYSE: RH) from Buy to Neutral, slashing its price target from $437 to $200. The firm cited growing challenges in the external environment, including potential tariff impacts and a more cautious consumer backdrop. Additionally, RH’s leveraged balance sheet was flagged as a concern, leaving less room for error in execution.
While Citi acknowledged RH’s unique position at the intersection of high-end furnishings, experiential retail, and luxury branding, the analysts described the near-term risk/reward as balanced, given the uncertainty surrounding the company’s growth outlook.
David Kirakosyan is a seasoned financial journalist with nearly a decade of hands-on experience in covering the U.S. stock markets. Since 2016, he has written thousands of equity news articles, detailed market analyses, and investment insights for trusted platforms like Benzinga, Investing.com, and StreetInsider. David holds a Master of Science in Finance and is a Level 2 CFA® candidate, reflecting his deep commitment to financial expertise and ethical standards. His reporting combines real-world market experience with a strong academic foundation, helping readers make informed decisions backed by reliable information. Read Full Bio
