RH - Why RH Stock Cratered Today
2024-06-14 13:24:06 ET
Shares of luxury furniture company RH (NYSE: RH) cratered on Friday after the company reported financial results for its fiscal first quarter of 2024. Management says it's "investing aggressively" in the business during "the worst housing market in 30 years," which is a tough way to inspire investors. As of 11:50 a.m. ET, RH stock was down 18%.
RH's Q1 ended on May 4. During the quarter, the company generated net revenues of $727 million. That was down by less than 2% year over year, which wasn't bad, considering the headwinds in the furniture space right now. But its profit margins disappointed.
RH's Q1 cost of goods sold was up compared to the prior-year quarter, even though its revenue was down. Its operating expenses were also up year over year, leading to an operating margin of just 7.5% compared with 13.4% in the same quarter of last year. This resulted in a lower profit than investors expected for RH, which is why the stock is dropping so sharply today.
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Why RH Stock Cratered Today