RH CEO: 'continued weakness' in core upscale home decor business in 2019
Corte Madera-based home furnishings company RH (NYSE: RH) saw a big drop in share prices Friday, after it posted fourth-quarter results showing revenues had fallen short of projections and warned of headwinds to sales in 2019.
RH after the Thursday stock market session reported revenues were about $670.9 million in the period ending Feb. 2, only slightly up from approximately $670.3 million during the same period last year and short of previous estimates of $686.3 million.
CEO Gary Friedman in the earnings announcement said the company would continue to focus on more costly physical stores however in lieu of turning to online sales.
“While most in our industry are closing or downsizing stores, we remain committed to our quest of revolutionizing physical retailing. We have proven our ability to double the retail sales in our markets with legacy stores while more than doubling our profitability,” Friedman said.
The company’s stock fell from almost $130 a share at the close of the Thursday session to just over $100 a share Friday morning, a drop of over 20 percent. The price at the end of Friday's session was $103.17, down 21.8 percent from Thursday.
Friedman also said the company was moderation its projections for fiscal year 2019.
“Due to the continued weakness in our core business post the fourth quarter market volatility, the negative trends in the high end housing market, and our continued efforts to edit unprofitable and non-strategic businesses, we are moderating our fiscal 2019 net revenue outlook to $2.585 billion to $2.635,” Friedman said.
The company changed its name from Restoration Hardware to RH in 2017.