Core Insights - RH's shares declined after the company reported a significant revenue miss in its second-quarter earnings and reduced its full-year revenue outlook [1][2] - The company is facing an additional $30 million impact on its forecast due to tariffs, despite having maintained its full-year forecast just three months prior [1][2] Revenue Outlook - RH now anticipates full-year revenues to increase by 9% to 11%, down from a previous estimate of 10% to 13% [2] - Adjusted EBITDA margins are now expected to be between 19% to 20%, reduced from earlier estimates of 20% to 21% [2] Financial Performance - The reported revenue for the second quarter was $899 million, which fell short of Wall Street's expectations of $905 million [2] - The introduction of the Fall Interiors Sourcebook has been delayed by approximately two months as the company awaits final pricing based on tariff announcements [2] Revenue Shift - The CEO indicated that approximately $40 million in revenues is expected to shift from Q3 to Q4 and Q1 2026 [3]

Core Viewpoint - RH, a luxury home furnishings retailer, has revised its full-year revenue growth forecast downward and reported disappointing Q2 results, leading to an 8% decline in stock price during after-hours trading [2][4] Revenue Analysis - RH's revenue increased by 8% year-over-year to $3.3 billion, with Q2 revenue also rising 8% to $899 million; however, over the past three years, revenue has experienced an average decline of 5% [5][6] - The company's performance is closely tied to the housing market, and ongoing high mortgage rates and sluggish home sales could lead to a decline in demand for luxury furniture, potentially causing revenues to stagnate or drop back to $3.0 billion [6][8] Margin Pressure - In the last twelve months, RH generated $324 million in operating income, resulting in a 9.9% operating margin, with a net income of $84 million, reflecting a modest 2.6% net margin [7] - Tariffs, inflation, and rising freight costs are exerting pressure on margins, which could decline from around 10% to mid-single digits, potentially halving earnings [7][8] Valuation Concerns - RH currently trades at $228 per share, with a high valuation of 58x earnings based on FY 2024 EPS of $3.92; if revenues plateau and margins decrease, earnings could drop to about $2.00–$3.00 per share [8][9] - A potential valuation adjustment could see the stock price fall to the $100–$120 range, representing a 50% decrease from current levels [8][9] Future Outlook - The transition to lower valuations and earnings may take two to four years to manifest, with upcoming Q3 results being crucial for investor sentiment [9] - Despite challenges, RH has strengths such as an affluent customer base, brand advantages, and potential growth opportunities in international markets and new categories [10]

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]

US equity futures are fractionally lower with small caps lagging as the record-breaking rally in stocks appeared to be running out of steam. At 8:15am ET, S&P 500 futures slid 0.1% after all major US indexes hit all-time highs on Thursday, however Nasdaq 100 futures are still in the green amid an relentless tech bid: Microsoft rose in premarket trading, leading the Mag 7 after it avoided a hefty antitrust penalty from the European Union. Europe’s Stoxx 600 eased as well. Incremental headlines after yesterda ...

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]