Luxury homeware retailer RH (RH) reported fourth-quarter results that missed analyst estimates on both the top and bottom lines. However, the company provided upbeat full-year revenue guidance, which likely contributed to a pop in the stock in after-hours trading.
Yahoo Finance's Dani Romero analyzes headwinds the company faced that contributed to it's results.
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Editor's note: This article was written by Angel Smith
Video Transcript
- RH, the homeware retailer, are also reporting its fourth-quarter results. The stock is rising despite missing on both its top and bottom lines. It delivers upbeat guidance on its full-year forecast, 8% to 10% revenue growth. Our reporter Dani Romero has been following this one. Dani.
DANI ROMERO: RH did not fully satisfy the key debates among Wall Street analysts. Like we said, the luxury retailer reported a miss on adjusted earnings per share and revenue for the fourth quarter. But in their shareholder letter, they said that the fourth quarter was actually impacted by bad weather in January and shipping delays related to the ongoing conflict in the Red Sea.
The company, though we have to remember that this is a company that has been in the process of revamping its brand over the last 18 months. They launched their new RH Outdoor Sourcebook, which was released in mid-February. And consumers have been responding really well.
Will that be enough for this company? That is really debatable. If we look at the guidance, the company expects revenue in the first quarter to be in the low single digits, even though they say it will be up about 8% to 9%.
On the positive side, this company has been able to, you know, clear out some of their excess inventory, also deliver some new gallery reopenings, which should help profitability. Bottom line, the headwind for this company is the stagnant housing market, the higher for longer interest rates. And some analysts do worry that-- how will RH do some of their pricing strategy? How will that evolve throughout this year? And that could affect gross margin rates at the end of the day.
- Yeah, most of the street is still on the sidelines here. It looks like, at least right now. Thank you so much. Appreciate it.
