CORTE MADERA, Calif. — Top 100 retailer RH announced that it adjusted its fiscal 2022 outlook downward based on macroeconomic trends.
The Corte Madera, Calif.-based retailer projects fiscal 2022 net revenue to be down 2% to 5% with adjusted operating margin in the range of 21.0% to 22.0% with second quarter net revenue down 1% to 3% with adjusted operating margin in the range of 23.0% to 23.5%.
“The deteriorating macroeconomic environment has resulted in lower-than-expected demand since our prior forecast, and we are updating our outlook, particularly for the second half of the year,” said Gary Friedman, RH’s chairman and CEO. “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.”
In RH’s most recent earnings report released earlier this month, Friedman forecasted fiscal 2022 net revenue growth in the range of 0% to 2%, with net revenue in the second quarter down in the range of 1% to 3%. He noted the second quarter outlook remains unchanged versus the prior forecast due to faster backlog relief offsetting lower than expected demand.
“While we anticipate the next several quarters will pose a short-term challenge as we cycle the extraordinary growth from the COVID-driven spending shift, shed less valuable market share as we continue to raise our quality, and choose not to promote our business while we navigate through the multiple macro headwinds, we continue to believe our long-term investments will enable us to drive industry-leading performance over a longer-term horizon,” Friedman said.
The company also noted that it has not repurchased any shares since announcing the expansion of its common stock repurchase authorization on June 2.
Thomas Lester is Retail Editor for Furniture Today and Digital/Managing Editor for Home Accents Today. A graduate of Emory & Henry College’s Mass Communications program, Lester spent a dozen years working for newspapers in Virginia and North Carolina covering an array of subjects, ranging from community news, government, education, ACC sports, professional baseball and more before joining Furniture Today in 2013. Reach out to me with your story ideas, tips and more at firstname.lastname@example.org.