Global home furnishings company RH has announced revisions to its outlook for its second quarter and full year for 2022.
RH said it had taken into account the macro-economic conditions and its current business trends, which it predicts will see demand continue to soften during the remainder of the year.
It now expects 2022 net revenue growth in the range of (2%) to (5%), with adjusted operating margin in the range of 21% to 22%, while second quarter net revenue growth to be in the range of (1%) to (3%), with adjusted operating margin in the range of 23% to 23%.
The second quarter outlook remains unchanged versus its prior forecast due to ‘faster backlog relief offsetting lower than expected demand’.
Gary Friedman, Chairman and Chief Executive Officer, commented: “The deteriorating macro-economic 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.
“With mortgage rates double last year’s levels, luxury home sales down 18% in the first quarter, and the Federal Reserve’s forecast for another 175 basis point increase to the Fed Funds Rate by year end, our expectation is that demand will continue to slow throughout the year.
“While we anticipate the next several quarters will pose a short-term challenge as we cycle the extraordinary growth from the COVID-driven spending shift, shed less valuable market share as we continue to raise our quality, and choose not to promote our business while we navigate through the multiple macro headwinds, we continue to believe our long-term investments will enable us to drive industry-leading performance over a longer term horizon.”