The CEO blames his dismal numbers on the election and a catalog delay.
Blaming everything from election-induced consumer angst to being unable to get its catalogs to homes on time, Restoration Hardware rh gave a weak fourth-quarter forecast that sent share tumbling 20% in after-hours trading on Thursday.
The upscale, though not quite luxury, furniture retailer said its per-share earnings would range from 60 cents to 70 cents per share in the current quarter, which ends in late January. But that was well below the $1.08 analysts were expecting. And the once-highflying company said it expects revenue in the range of $562 million to $592 million for the fiscal fourth quarter, falling short of analysts projections for $639.2 million.
“Our business in November was below our expectations, which we largely attribute to consumer softness related to the U.S. election and our Fall 2016 Source Books getting in homes later than planned,” Chief Executive Gary Friedman said in a press release. He also said RH’s Holiday Collection sales are below expectations so far, and that the company is having to be more aggressive about clearing seasonal merchandise, taking deeper markdowns and hurting profit margins.
Other retailers have blamed anxiety around the U.S. election for weak results, but on the whole, consumer spending has been healthy in recent months, casting doubt on that as a factor that would explain a retailer’s problems.
Restoration Hardware shares, which had fallen by almost half this year before its third quarter results were released, were trading at $32.22 after the results were posted.
The company has been trying to renew itself and go further upscale. In the fall, it opened new, promising large-format design galleries in Seattle, Austin, Las Vegas and Leawood, Kansas.
But that will take time to kick in, and RH’s issues predate the height of the presidential election campaign: early this year, RH blamed problems from a strong U.S. dollar to a slowdown in the luxury market for its problems. And it had problems with shipping and product delays filling orders at its promising RH Modern brand.
Ultimately, while it might be easy to blame election angst for poor sales, Restoration Hardware’s problems are largely self-inflicted.