ORTE MADERA, Calif. -- RH (NYSE:RH) today announced revisions to its outlook for fiscal 2022.
Gary Friedman, chairman and chief executive officer, commented, “The deteriorating macro-economic 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.”
Taking into account the macro-economic conditions and our current business trends, we are providing the following outlook for the second quarter and full year, which assumes demand will continue to soften during the remainder of fiscal 2022:
Fiscal 2022 net revenue growth in the range of (2%) to (5%), with adjusted operating margin in the range of 21.0% to 22.0%.
Second quarter net revenue growth in the range of (1%) to (3%), with adjusted operating margin in the range of 23.0% to 23.5%. The second quarter outlook remains unchanged versus our prior forecast due to faster backlog relief offsetting lower than expected demand.
Mr. Friedman continued, “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.”
Friedman concluded, “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.”
The company also noted that it has not repurchased any shares since announcing the expansion of its common stock repurchase authorization on June 2, 2022.