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

RH stock falls after retailer lowers outlook for the year

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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 /zigman2/quotes/200286355/composite RH +5.73% 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 /zigman2/quotes/210599714/realtime SPX +2.13% .

/zigman2/quotes/200286355/composite
RH
US : U.S.: NYSE
$ 299.29
+16.23 +5.73%
Volume: 623,741
Aug. 10, 2022 4:00p
P/E Ratio
12.01
Dividend Yield
N/A
Market Cap
$6.99 billion
Rev. per Employee
$593,126
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/zigman2/quotes/210599714/realtime
US : S&P US
4,210.24
+87.77 +2.13%
Volume: 2.22B
Aug. 10, 2022 5:27p
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