RH (NYSE:RH) stock rose 16.36% (As on March 28, 11:10:03 AM UTC-4, Source: Google Finance) though the company reported fourth-quarter results that missed Wall Street estimates, as adverse weather and shipping delays weighed on performance during the quarter, though the home furnishing company talked up “exceptional” demand for its new catalogue of products.
RH in the fourth quarter of FY 23 has reported the adjusted earnings per share of 72 cents, missing the analysts’ estimates for the adjusted earnings per share of $1.69. The company had reported the adjusted revenue of $738 million in the fourth quarter of FY 23, missing the analysts’ estimates for revenue of $778 million. Revenue was hurt by a $40 million hit in the fourth quarter due to “the severe January weather and shipping delays related to the ongoing conflict in the Red Sea. Adjusted operating margin was 9.1% and 13%, and adjusted EBITDA margin was 15.3% and 18.2% for the fourth quarter and the full year, respectively, reflecting deleverage from lower revenues, increased markdowns to support the product transformation, and investments in international expansion.
Looking ahead to fiscal 2024, the company is forecasting demand growth of 12% to 14% and revenue growth of 8% to 10%. For Q1, demand growth was seen in the positive mid-single digits and revenues in the negative low-single digits. Q1 adjusted operating margin is expected to be in the range of 6% to 7% and adjusted EBITDA margin in the range of 12% to 13%.
Still, the company touted optimism, saying initial demand for its new luxury outdoor furniture RH Outdoor Sourcebook, which arrived in homes late February through mid-March with 14 new collections, “has been exceptional,” and is expected to lead to “significant” market share in fiscal 2024.
The company’s product transformation plans for 2024 include the launch of our new RH Outdoor Sourcebook, the most dominant and disruptive collection of luxury outdoor furniture in the market arrived in homes late February through mid-March with 14 new collections. The unveiling of the new RH Modern Sourcebook is scheduled to be in-home late April through early May with 30 new collections across living, dining, bedroom, and bathroom including original designs from the Harvey Probber estate, one of the most influential modern designers of the past century. The company expects the launch of RH Modern will further accelerate the demand trends in the second quarter and throughout the second half of 2024.