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June 30, 2022, 8:26 a.m. EDT

RH stock falls after retailer lowers outlook for the year

By Claudia Assis

RH shares were down some 9% before the opening bell on Thursday, continuing an after-hours slump, after the retailer formerly known as Restoration Hardware dialed down its outlook for the year, saying demand has slowed because of a “deteriorating” economy.

RH (NYS:RH) said it expects a revenue decline in fiscal 2022 of between 2% and 5%. The furniture and home-goods retailer in June called for revenue growth between flat and up 2% — itself a lowered expectation — and already sounded worried, seeing “softening demand” amid economic uncertainty.

RH kept unchanged its guidance for a second-quarter revenue decline of between 1% and 3%.

“The deteriorating macroeconomic 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,” Chief Executive Gary Friedman said in a statement.

Demand will continue to slow down throughout the year, thanks to rising mortgage rates, declining home sales and rising interest rates, Friedman said.

See: U.S. pending home sales rebound in May, reversing a six-month decline

MarketWatch Picks: Mortgage rates have dipped slightly, and here are more ways to save on a mortgage right now

The next several quarters will present a “short-term challenge,” the CEO said. RH is expected to report fiscal second-quarter results in early September.

Shares of RH have dropped nearly 39% this year, compared with losses of around 18% for the S&P 500 index (S&P:SPX) .

Link to MarketWatch's Slice.