RH shares slide after company lowers its outlook for the year

High-end furniture chain RH on Wednesday slashed its outlook for 2022 revenue, anticipating consumer demand for its products will continue to soften in the back half of the year.

The company 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 3% from prior-year levels.

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

“With mortgage rates double last year’s levels, luxury home sales down 18% in the first quarter, and the Federal Reserve’s forecast for another 175 basis point increase to the Fed Funds Rate by year end, our expectation is that demand will continue to slow throughout the year,” CEO Gary Friedman said in a statement.

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

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