RH (NYSE: RH) (Restoration Hardware) released its Q1 earnings report yesterday, and are feeling the backlash to lowering earnings guidance.
Though the report had indicated a positive outlook for the company in terms of overturning their net loss of $2.1 million last year into net income of $1.8 million this year, in addition to reducing their net loss to $3.4 million from their previous $13.5 million and increasing net revenue by 23%, RH has dropped 26%.
The CEO, Gary Friedman, had outlined aggressive proposals for improvement, and the company is expecting revenues to increase as can be seen by the revenue guidance increase from $2.4 billion to $2.45 billion for fiscal 2017. This however translated to a negative impact on eaernings, from the previously assessed $65 - $80 million to the new $60 - $70 million assessment for the net income guidance.
“We believe when you step back and consider we are - one, building a brand with no peer; two, creating a customer experience that cannot be replicated online; and three, have total control of our content from concept to customer - you realize what we are building is extremely rare in contrast to today's retail landscape” underlined Mr. Friedman in the report, however it is yet to be seen if the market will agree.