Group 1 - RH reported weaker-than-expected second-quarter results with earnings of $2.93 per share, below the analyst estimate of $3.20, and revenue of $899.15 million, missing the Street estimate of $904.64 million [1] - Despite challenges, RH experienced industry-leading growth with a revenue increase of 8.4% and demand growth of 13.7% in the second quarter [2] - RH lowered its fiscal 2025 revenue outlook from a range of $3.49 billion to $3.59 billion to a new range of $3.46 billion to $3.53 billion, compared to the previous estimate of $3.52 billion [2] Group 2 - Following the earnings announcement, analysts adjusted their price targets for RH, with Telsey Advisory Group downgrading from Outperform to Market Perform and lowering the price target from $255 to $220 [8] - Barclays maintained an Overweight rating but reduced the price target from $436 to $385 [8] - Guggenheim reiterated a Buy rating and maintained a price target of $300 [8]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Core Insights - RH's shares fell 7% in premarket trading following weaker-than-expected results and lowered guidance due to tariff uncertainties [1][6] Financial Performance - For the second quarter, RH reported adjusted earnings per share of $2.93 and revenue of $899.2 million, which is an 8% year-over-year increase. However, these figures missed analyst expectations of $3.22 EPS and $904.6 million in revenue [2][6] - The company cited the "polarizing impact of tariff uncertainty" and the worst housing market in nearly 50 years as factors negatively affecting performance [2][3] Guidance and Outlook - RH revised its full-year adjusted EBITDA margin forecast to 19% to 20%, down from the previous estimate of 20% to 21%. Revenue growth is now anticipated to be between 9% to 11%, compared to the earlier estimate of 10% to 13% [3] - The company is taking steps to mitigate tariff costs, including moving production out of China and increasing operations at its North Carolina plant [3][6] Market Context - Year-to-date, RH shares have lost 42% of their value, reflecting broader market challenges and specific company issues [4]

Market Overview - US equity futures are slightly lower, with small caps lagging as the stock rally appears to be losing momentum, while major indexes reached all-time highs [1] - The S&P 500 futures fell by 0.1%, while Nasdaq 100 futures remained positive due to strong tech performance, particularly from Microsoft [1] - European stocks showed subdued performance as investors await the Federal Reserve meeting next week, with the Stoxx Europe 600 Index little changed [7] Company Performance - Microsoft shares rose by 1% in premarket trading after avoiding a significant antitrust penalty from the EU, leading the Magnificent 7 stocks [3] - Adobe's stock increased by approximately 3% following a strong quarterly revenue outlook, indicating positive returns from AI investments [4] - Alaska Air gained 2% after receiving a buy rating upgrade from UBS, achieving a clean sweep of buy ratings among analysts [4] - Array Technologies saw a decline of 5% after being downgraded to underperform by BofA due to tariff impacts [4] - RH's shares fell by 8% after the company reduced its full-year sales outlook, citing new US tariffs affecting its seasonal catalog [4] - Super Micro Computer's stock rose by 5% after announcing the availability of its Nvidia Blackwell Ultra solutions [4] - Warner Bros. Discovery shares increased by 6%, continuing a significant rally after news of a potential bid from Paramount Skydance [4] Economic Indicators - Analysts expect small caps to outperform larger indices over the next twelve months, with a potential 20% advance in the Russell 2000 compared to an 11% increase in the S&P 500 [6] - The market anticipates between two to three quarter-point rate cuts by the Federal Reserve by year-end, with some traders betting on a half-point cut next week [3][5] Commodity and Currency Movements - Commodities showed mixed results, with oil and base metals prices rising, while precious metals experienced declines [1][12] - The dollar rebounded from previous losses, with the yen lagging behind G-10 currency peers [10] Geopolitical and Trade Developments - US Treasury Secretary Scott Bessent is set to meet with Chinese Vice Premier He Lifeng next week to discuss trade and economic issues [21] - The US is pressuring G7 countries to impose higher tariffs on India and China regarding Russian oil purchases, which may impact market sentiment [17][37]

Group 1 - U.S. stock futures showed mixed results, with Dow futures declining approximately 100 points [1] - RH reported second-quarter earnings of $2.93 per share, missing the analyst estimate of $3.20, and quarterly revenue of $899.15 million, which fell short of the expected $904.64 million [1] - RH shares dropped 11.5% to $201.98 in pre-market trading following the earnings report [2] Group 2 - Rent the Runway, Inc. saw a significant decline of 27.1% to $5.75 in pre-market trading after reporting disappointing second-quarter EPS results [4] - Frequency Electronics Inc experienced an 11% drop to $30.56 in pre-market trading due to downbeat financial results for its first quarter [4] - Zhengye Biotechnology Holding Ltd fell 9.3% to $8.35 in pre-market trading after a decline of 11% on the previous day [4] - Inventiva S.A. dipped 8.5% to $5.28 in pre-market trading after a 4% gain on Thursday [4] - Kindly MD, Inc. declined 7.7% to $3.64 in pre-market trading [4] - Tronox Holdings plc fell 5.7% to $4.71 in pre-market trading, with Mizuho analyst John Roberts downgrading the stock from Neutral to Underperform and setting a $4 price target [4] - ABIVAX Société Anonyme decreased by 4.7% to $81.94 in pre-market trading [4] - Certara, Inc. fell 4.3% to $10.45 in pre-market trading [4]

Core Viewpoint - The home furnishing retailer anticipates that tariffs will increase its costs in the upcoming year [1] Group 1 - The company is facing additional financial pressure due to tariffs [1]

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - Vestand Inc. (VSTD) is up 96% at $2.53 - GlucoTrack, Inc. (GCTK) is up 86% at $9.09 - HCW Biologics Inc. (HCWB) is up 71% at $5.68 - Millennium Group International Holdings Limited (MGIH) is up 31% at $2.87 - IBEX Limited (IBEX) is up 27% at $38.74 - BGSF, Inc. (BGSF) is up 27% at $8.19 - Apimeds Pharmaceuticals US, Inc (APUS) is up 23% at $2.40 - Asset Entities Inc. (ASST) is up 16% at $10.39 - HUB Cyber Security Ltd. (HUBC) is up 10% at $2.71 - BioNexus Gene Lab Corp. (BGLC) is up 9% at $4.70 [3] Premarket Losers - Rent the Runway, Inc. (RENT) is down 21% at $6.17 - XTI Aerospace, Inc. (XTIA) is down 19% at $1.64 - RH (RH) is down 9% at $206.00 - Frequency Electronics, Inc. (FEIM) is down 9% at $30.96 - Global Mofy AI Limited (GMM) is down 9% at $1.99 - Jeffs' Brands Ltd (JFBR) is down 8% at $4.33 - Kindly MD, Inc. (NAKA) is down 8% at $3.60 - Empro Group Inc. (EMPG) is down 7% at $12.38 - Rezolve AI PLC (RZLV) is down 6% at $6.32 - NLS Pharmaceutics AG (NLSP) is down 5% at $2.03 [4]

Group 1 - President Trump's legal team is seeking a federal appeals court ruling to allow his attempt to remove Fed Governor Lisa Cook before the upcoming rate-setting meeting [1] - Treasury Secretary Scott Bessant has met with several candidates for the next Fed chair, including former Fed officials Larry Lindseay, Kevin Worsh, and James Bullard [2][3] - Adobe's earnings and revenue guidance exceeded estimates, indicating strong performance in the company [4] - RH (Restoration Hardware) is facing pressure as its revenue fell short of expectations, leading to a cut in full-year guidance due to ongoing tariff uncertainties [4][5] - Super Micro has begun volume shipments of its Nvidia Blackwell Ultra products to customers globally, reflecting growth in the AI technology sector [5]

Group 1 - Chinese concept stocks showed strength in pre-market trading, with Baidu rising over 4% and Bilibili and Global Data increasing by more than 3% [1] - Luxury furniture company RH experienced a significant decline, dropping by 9% [1]

Core Viewpoint - Stock futures experienced a slight decline on Friday morning following new highs on Wall Street, driven by cooling jobs data and mild inflation, which bolstered confidence in a potential interest rate cut by the Federal Reserve at the upcoming meeting [2] Group 1 - Wall Street reached fresh highs, indicating a strong market performance [2] - Cooling jobs data suggests a slowdown in employment growth, which may influence monetary policy [2] - Mild inflation levels are contributing to the expectation of interest rate cuts by the Federal Reserve [2]