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 -2.95% 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.
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 -1.47% .