No Rest For Retailer RH

Home goods retailers have had a rough time in a post-pandemic environment. That’s because consumers’ discretionary spending has moved from goods to experiences, and housing activity has ground to a halt by high prices, high interest rates, and low existing inventory. And that holds true even in the luxury market, where RH operates. 😬

The luxury home goods company reported adjusted EPS of $3.93 on revenues of $800 million. That topped estimates of $2.60 per share on $786 million in revenues. Operating margins of 20.2% also exceeded guidance, primarily due to faster-than-expected deliveries and a shift of $40 million in advertising costs to the next quarter. 🔺

Looking ahead, executives remain cautiously optimistic. “We continue to expect the luxury housing market and the broader economy to remain challenging throughout fiscal 2023 and into next year as mortgage rates continue to trend at 20-year highs and the current outlook is for rates to remain unchanged until the second quarter of 2024.”

Their longer-term strategy of moving beyond curating and selling products to conceptualizing and selling spaces remains an attractive proposition for investors. It would move the company beyond the $170 billion home furnishings market and into the $1.7 trillion North American housing market.

However, the company still has many steps ahead of it to execute that vision successfully. And for now, the growth slowdown and cautious outlook into 2024 remain the focus of investors.

$RH shares fell about 9% on the news, trading roughly 55% below their all-time highs. 📉

More in   Earnings

View All

Cyber Stocks Get Clocked

Palo Alto Networks is getting pounded by sellers after hours, dragging the rest of the sector down with it. Let’s see what happened. 👇

The cybersecurity giant reported adjusted earnings per share of $1.46 on revenues of $1.98 billion. Unfortunately, that’s where the good news ended.

Read It

Lyft’s IR Department Just Whiffed

Investor relations departments are the silent heroes of a public company, receiving little recognition for the critical role they play. When they do receive a lot of attention, it’s generally not for good reason. That’s unfortunately what Lyft’s team is finding out today. 😵‍💫

After the bell, ridesharing company Lyft reported fourth-quarter results that were good, not great. But the stock immediately shot up and notched as high as a 60% gain before anyone realized what happened. Did the company just invent a cure for rare diseases? Are they pivoting to crypto or semiconductors? What was the cause of this?

Read It

Sellers Unleash On Unity

Video game software developer Unity probably wishes it could reload its last saved checkpoint after reporting another quarter of lackluster earnings. 👾

Although revenues of $609 million topped expectations of $451 million, management noted revenue would have been $510 million if its deferred revenues were not released. Meanwhile, the company’s net loss of $0.66 was narrower than last year’s $0.82 but still much higher than analysts’ $0.46 per share expectation. 🔺

Read It