RH stock tumbles on Thursday: here’s why
- Furniture maker RH shares are down nearly 10% on Thursday.
- The company has revised its revenue estimates for the FY from 0%-2% to between -2%and -5%.
- RH shares are down nearly 60% year-to-date.
RH shares fell sharply on Thursday after the furniture maker announced revisions to its 2022 revenue outlook.
The company, formerly known as Restoration Hardware, had its shares trading around 10% lower after it slashed its revenue forecast amid expectations of reduced customer demand for its luxury furnishings.
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RH’s move to revise its revenue projections lower comes just weeks after its earnings report. Just over four weeks ago, the company put its FY revenue estimates at 0% to +2%.
However, with the sales to customers expected to fall in the second half of the year, the furniture chain has released a revision of the estimates to now have a growth forecast of -2% to -5%.
RH not buying back its stock
The company also initiated a $2 billion share repurchase program during its earnings reports earlier this month. But in the announcement made overnight Wednesday, it emerged RH had not bought back any shares. More importantly, and perhaps disappointingly, it now says it won’t be buying back any shares just yet.
This appears to have spooked investors, who see a buyback as a signal from the company regarding their outlook of the stock’s value. With yesterday’s communication suggesting otherwise, downside pressure was more than likely.
The stock is down 19% in the past five days and 60% year-to-date.