RH - RH: Pandemic-Time Earnings Are Now Behind
2024-06-04 13:11:01 ET
Summary
- RH has grown revenues well in the luxury furnishings industry through continuous organic expansion.
- The FY21-FY22 earnings were boosted by Covid, and have now turned into weak earnings as a weak housing market has deteriorated demand for furniture.
- The company expects a gradual recovery in FY24, but I believe that investors should take the current financial outlook with caution.
- The current valuation seems to price in pandemic-time earnings that are unlikely to repeat, making the stock a weak risk-to-reward investment in my eyes.
RH ( RH ) retails furnishings under RH Galleries and RH brands. In addition, the company operates showrooms under the Waterworks name. The company has international operations, as it operates in the United States, the Middle East, Australia, the United Kingdom, and other parts of Europe, among other places. RH focuses on the luxury segment in the furnishings industry, selling high price-point items....
RH: Pandemic-Time Earnings Are Now Behind