Share this with your network:
RH Stock Rockets as Demand Surges
Published:
September 14, 2024
Designwal News
But, What’s the Real Story?
Published:
Saturday, September 14, 2024
RH (formerly Restoration Hardware) just reminded Wall Street why it's a heavyweight in the luxury home furnishings game. On Friday, the stock surged more than 20%, leaving investors buzzing. But the real question? Why now, and what does this mean for the future?
Let’s break it down. In their latest shareholder letter, RH dropped a bombshell: demand is up 7% year-over-year for their fiscal second quarter. But wait, isn’t the housing market supposed to be sluggish right now? With high mortgage rates and homeowners sitting on the sidelines, who’s buying? That’s where RH thrives. They're not your average retailer, and their ultra-luxe customers are still pulling the trigger on high-end renovations and new furniture pieces, despite the broader market’s slowdown.
Gary Friedman, RH’s charismatic CEO, had a lot to say on the company’s Q2 earnings call: “We expect demand trends to accelerate throughout 2024 and into 2025.” Bold move, right? But Friedman’s betting on one thing—a looming Fed rate cut. With inflation cooling down, mortgage rates have started to drift lower, giving potential buyers a bit of breathing room. And guess who’s ready to swoop in? RH.
Sure, they did lower their full-year forecast for both demand and revenue growth, but here’s the kicker: the market didn’t flinch. Why? Analysts like Seth Basham from Wedbush were expecting a bigger hit to their numbers, and the updated guidance actually signals growth in the back half of 2024 and into 2025. Investors were also hyped about RH’s merchandise margins turning positive in August. Translation? New products are boosting, not dragging down, their profits.
So, what does this all mean for RH’s stock? Well, they just posted earnings per share of $1.69, beating Wall Street’s expectations, and their revenue hit $829.7 million, above the projected $825.1 million. That’s not just luck; it’s strategy. RH’s stock is now up 8% year-to-date, and after Friday’s surge, it closed at a cool $321.90.
Are we witnessing the start of RH’s comeback tour? The signs are all there. With a possible Fed rate cut and a loyal, high-spending customer base, RH seems poised to dominate in the luxury market for the foreseeable future. So, are you ready to bet on RH’s next act?
#RHStock #HomeFurnishings #MarketSurge #LuxuryRetail #DesignWalNews #GaryFriedman
Share this with your network:
Paid Ads
