RH Q4 Earnings: Revenue Miss, EPS Miss, Upbeat Guidance On Accelerating Demand Trends And More

RH RH reported fourth-quarter financial results after the market close on Wednesday. Here’s a look at the key metrics from the quarter.

Q4 Earnings: RH reported fourth-quarter revenue of $738.26 million, which missed the consensus estimate of $777.48 million, according to Benzinga Pro. The luxury retailer reported quarterly adjusted earnings of 72 cents per share, which missed analyst estimates of $1.67 per share.

RH said its revenues were negatively impacted by $40 million in the fourth quarter due to the severe January weather and shipping delays related to the ongoing conflict in the Red Sea. 

GAAP operating margin was 8.7%, while adjusted operating margin came in at 9.1%. Adjusted EBITDA margin was 15.3% in the fourth quarter.

“Fiscal 2023 was a year of adversity, innovation, and investment for team RH as we faced the most challenging housing market in three decades while investing in the most compelling product transformation and platform expansion in our history,” the company said in a letter to shareholders.

“We have positioned the RH brand to gain significant market share in 2024 and beyond while building the foundation for our global expansion across the United Kingdom, Europe, Australia and the Middle East over the next several years.”

Outlook: RH said its forecasting first-quarter demand growth to be in the mid-single digit range, while revenues are expected to be down in the low-single digits. Adjusted operating margin is expected to be in the range of 6% to 7% and adjusted EBITDA margin is expected to be in the range of 12% to 13%. 

RH sees full-year 2024 demand growth of 12% to 14% and revenue growth of 8% to 10% on a year-over-year basis. Full-year adjusted operating margin is expected to be in the range of 13% to 14% and adjusted EBITDA margin is expected to be in the range of 18% to 19%. 

“While we expect business conditions to remain challenging until interest rates ease and the housing market begins to rebound, we expect our demand trends to accelerate throughout fiscal 2024,” the company said.

Management will hold a conference call to discuss these results at 5 p.m. ET.

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RH Price Action: RH shares initially fell on the report, but the stock was up 3.16% after hours at $306.25 at the time of publication, according to Benzinga Pro.

Photo: chien than from Pixabay.