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RH Reports Larger-Than-Expected Loss Due to Challenging Housing Market

 


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**RH Posts Bigger-Than-Expected Loss as Tough Housing Market Hurts Demand**


**By BILL MCCOLL**


**Published June 14, 2024**


**KEY TAKEAWAYS**


RH reported a quarterly loss and current-quarter sales guidance that missed estimates as the tight housing market pulled down demand.


The upscale home furnishings retailer said it faced the toughest housing market in three decades, and that Federal Reserve monetary tightening will impact it through 2024 and possibly into next year.


The news sent RH shares to their lowest point since last November.


Shares of RH (RH) dropped on Friday, following the upscale home furnishings retailer's report of a larger-than-expected loss and weak guidance due to the constrained housing market.


The company, previously known as Restoration Hardware, reported an adjusted first-quarter loss of $0.40 per share, which was wider than anticipated. Revenue decreased by 1.7% year-over-year to $727.0 million, although this exceeded expectations.


**RH CEO Calls It 'Most Challenging Housing Market in Three Decades'**


Chief Executive Officer (CEO) Gary Friedman wrote to shareholders, describing the current housing market as "the most challenging in three decades," and predicting that business conditions will remain difficult until interest rates decrease and the housing market starts to recover.


Friedman indicated that this recovery might take time, as the Federal Reserve's inflation control measures are expected to impact the housing market throughout the latter half of 2024 and possibly into 2025. Despite this, Friedman expressed optimism that demand trends will improve over the course of the year.


RH forecasts current-quarter sales growth between 3% and 4%, which falls short of expectations. However, the company reiterated its full-year revenue growth projection of 8% to 10%.


By 10 a.m. ET Friday, RH shares had plummeted more than 16% to $231.34, their lowest level in seven months.


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