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RH Slashes 2022 Revenue Outlook As Demand Softens

RH Slashes 2022 Revenue Outlook As Demand Softens

RH Slashes 2022 Revenue Outlook As Demand Softens

High-end furniture retailer RH (formerly Restoration Hardware) has cut its outlook for 2022 as it expects consumer demand to soften in the year’s second half.

The company is now projecting annual sales to fall by 2% to 5%, down from its previous sales estimates to be somewhere between flat to up 2%. Meanwhile, it is now expecting its Q2 revenue to be down 1% to 3% compared to the same quarter the year before.

“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.

Friedman expects the ongoing turbulence in the market to continue to pose short-term challenges for the company in the next several quarters, CNBC reported.

The company’s decision to cut its outlook marks a change in its stance from earlier this month when Friedman noted that the company was poised to start a new growth chapter even as the war in Ukraine softened consumer demand.

RH’s revenue for the quarter ending April 30 was $957 million, an improvement from $861 million during the same period the year before.

The company’s stock fell nearly 8% in after-hours trading on Wednesday following the announcement. Overall, the company’s stock has fallen 55% year to date.

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