From Home Furnishing Business
RH Stock Tumbles on Outlook
Shares of lifestyle retailer Restoration Hardware (NYSE: RH) took a tumble on a released update and preliminary earnings Wednesday afternoon.
The retailer reported that it sees fourth quarter adjusted earnings of 99 cents per share on $647 million in revenue, below analysts’ expectations. Shares fell as steeply as 25 percent in after-hours trading.
Gary Friedman, chairman and CEO, said the company’s lower than expected earnings were due to volatility in the market.
"Our sense is the increased volatility in the U.S. stock markets, especially the extreme conditions in January, which is historically our biggest month of the quarter for furniture sales, contributed to our performance," Friedman said. “Historically, our business has a correlation to large movements in stock prices as we believe asset valuations influence our customers’ buying patterns.”
Friedman said response to its recently introduced RH Modern had been strong, however, shipping delays have impacted the launch. Some vendors, he said, have stuggled to “ramp up production.”
The retailer has been underperforming in Canada, Texas and Mexico, Friedman said.