Rh nyse Rh Stock Tumbles on Q1 Earnings Miss Revenue Beats Estimates

RH (NYSE: RH) Stock Tumbles on Q1 Earnings Miss, Revenue Beats Estimates

RH (NYSE: RH) stock plunged during pre-market trading Friday following the release of first-quarter earnings that fell below expectations. However, revenue topped estimates.

The luxury home furnishings retailer reported a loss of 40 cents per share for the first quarter, significantly wider than the analyst consensus estimate of 12 cents per share, representing a 233.33% miss. 

Despite the earnings miss, the quarterly sales of RH were slightly better than expected. The company reported revenue of $726.96 million, beating the analyst consensus estimate of $724.7 million. However, this figure represents a 1.65% decline from sales of $739.16 million reported in the same period last year.

Moreover, the company observed a 3% increase in demand for the quarter, falling slightly short of its guidance. RH attributed this to slowing growth due to interest rates exceeding 7%.

Gary Friedman, CEO of RH, acknowledged the arduous operating environment but remained optimistic about the company’s strategic direction. He stated,

“We are pleased to report that our demand trends inflected positively in the first quarter and continue to build momentum despite operating in the most challenging housing market in three decades.”

Friedman further emphasized RH’s investments in product transformation and platform expansion as pivotal in gaining market share in North America and laying the groundwork for global expansion into regions like the United Kingdom, Europe, Australia, and the Middle East over the coming years.

Q2 and Full FY2024 Outlook

Looking forward, RH provided a positive outlook for the second quarter. The company forecasts demand growth of 9% to 10% and revenue growth between 3% and 4%. For the full fiscal year 2024, RH expects demand growth between 12% and 14% and revenue growth between 8% and 10% year-over-year.

RH also forecasts to end the year with an increased backlog of approximately $110 million to $130 million due to revenue lagging behind demand throughout fiscal year 2024.

RH (NYSE: RH) Stock Price Action

As of 07:41 a.m. (Eastern Time) Friday, RH stock traded at $244.19, marking an 11.86% decrease compared to the previous trading session.