RH Shares Lower After Challenging Q3

By Adriano Marchese

RH shares experienced a decline in premarket trading on Friday morning after the company announced that it would be revising its full-year guidance following a challenging third quarter. The company reported a net loss of $2 million, or 12 cents per share, compared to earnings of $99 million, or $3.78 per share, during the same period last year.

On an adjusted basis, RH reported a loss of 42 cents per share, falling short of analysts' expectations of 94 cents per share. Net revenue also decreased to $751 million from $869 million, slightly below the anticipated decline.

RH attributes these disappointing results to interest-rate related headwinds that increased in early October, which subsequently slowed down the housing market. Furthermore, the home furnishings market has become more promotional, leading to increased pressure on gross margins.

As a result, RH has adjusted its full-year guidance. The company now expects revenue to be between $3.06 billion and $3.08 billion, with an adjusted operating margin ranging from 13.6% to 14.0%. This is a slight alteration from the previous guidance of revenue between $3.04 billion and $3.1 billion.