Furniture retailer RH is experiencing significant challenges amidst a difficult housing market, which remains at Covid lows. The company reported a miss in its Q1 demand comp guide and has now set a target for 9-10% growth in Q2, which appears ambitious given the current economic conditions. Despite the adverse environment, RH is maintaining its annual demand guide. The company's CEO, Gary Friedman, noted that this is the most challenging housing market in three decades. In response to the tough market, RH plans to distribute new catalogs extensively. The broader housing sector is also under pressure, with primary housing construction ETFs such as $XHB and $ITB down by 2.3% and 1.9% respectively. RH's stock has dropped 17%, which the company attributes to soft demand for high-end products and hawkish Fed commentary throughout April. Additionally, Arhaus reported a slight increase of 0.1%, and April demand accelerated from Q1.
RH down 17%. Blames soft demand for rental jets, $2,500/night hotels and over-priced furniture on "hawkish Fed commentary throughout April". Really. And that's the least-weird part of the letter. Good Friday read, if you like surrealist stuff. $RH @StreetBeatsPros… https://t.co/Hd2uPcvzc9 https://t.co/cA7MUCSGLm
RH down 17%. Blames soft demand for rental jets, $2,500/night hotels and over-priced furniture on "hawkish Fed commentary throughout April". Really. And that's the least-weird part of the letter. Good Friday read, if you like surrealist stuff. $RH @StreetBeatsPros https://t.co/CyLzaRi9gv https://t.co/cA7MUCSGLm
Heard on the Street: Furniture seller RH is facing a steep climb https://t.co/uj3LO1tYxz
$RH CEO says "this is the most challenging housing market in three decades". In the meantime, $ARHS is saying - hold my beer. https://t.co/lzlumGmhF9
Not just $RH that should be weighing on higher end furniture such as $ARHS - investors are taking housing to the woodshed today: Primary housing construction ETFs: $XHB -2.3% $ITB -1.9% https://t.co/iMpbjuAOol
Is Arhaus $ARHS a play here off of $RH? $ARHS +0.1%. https://t.co/54xCj5PMFh https://t.co/VLfzktv1o5
$RH missed quarterly demand comp guide despite giving it in late March, two thirds of way through this Q. Now Friedman is holding annual demand guide despite it being earlier & despite his 'more' negative macro views. https://t.co/0hmCB6iRzk
Gary ‘the seer’ Friedman’s customers are the keenest Fed watchers around as they have been through whole period that $RH has underperformed peers. Remember $ARHS told us April demand accelerated from Q1. https://t.co/N2IDkYAQE2
After a miss in Q1 & a guide to +9-10% growth in Q2, that goal for demand comp of 12-14% became a much bigger hockey stick. No wonder $RH now plans to send out new catalogs left right & centre… $RH $WSM $ARHS
Housing turnover - which is the primary driver of furniture buying - remains at Covid lows. Fortunately for $RH, CPI/PPI/Fed posture this week all support a lower rate path, which will allow investors to look past even an abysmal quarter https://t.co/3yIbZOQLcV https://t.co/O8cIUIeWBZ