Ivesting.com -- RH reported Thursday first-quarter results that topped Wall Street estimates, and lifted its annual revenue guidance but trimmed its outlook on margins as it looks to ramp up markdowns to clear inventory.
RH (NYSE:RH) was down 3% in after-hours trading following the report.
The company, which specializes in furnishings and fittings for luxury homes, reported adjusted EPS of $2.21 on revenue of $739.9 million, topping analyst estimates for EPS of $2.12 on revenue of $732M.
The beat on the top and bottom lines come despite the decline of the overall macro environment, especially for home-related businesses.
Looking ahead, RH lifted its revenue outlook for fiscal 2023 to a range of $3.00B to $3.10B, but lowered its outlook for adjusted operating margin to a range of 14.5% to 15.5%, on costs related to the ramp-up of its global expansion. That compared to prior estimates for fiscal 2023 revenues in the range of $2.9 to $3.10 billion and adjusted operating margin in the range of 15% to 17%.
"[W]e are now forecasting increased markdowns to clear discontinued inventory required to support our product transformation over the next several quarters," the company said, adding that its expects the "luxury housing market and broader economy to remain challenging throughout fiscal 2023 and into next year."
For Q2, revenue was guided in a range of of $765 to $775M and adjusted operating margin in the range of 14% to 14.5%.