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High-end furniture chain RH lowered its sales forecast for 2022 on Wednesday and expects consumer demand for its products to continue to slack in the second half of the year.
The company now expects full-year sales to fall between 2% and 5%, compared to previous expectations that saw sales rise flat at 2%. The company continues to expect revenue for the fiscal second quarter to be between 1% and 3% down year-over-year.
RH shares fell nearly 8% in after-hours trading following the release. The stock was already down nearly 3% during regular trading to close at $237.32.
“With mortgage rates doubling year over year, luxury home sales down 18% in the first quarter, and the Federal Reserve forecasting another 175 basis point hike in the fed funds rate by the end of the year, we expect the rate to slow down.” demand will continue to slow throughout the year,” CEO Gary Friedman said in a statement.
He added that the next few quarters will present a near-term challenge for the company as RH goes through a period of increased demand in the early days of the Covid pandemic.
The company warned in early June that it saw slowing demand related to the Russian invasion of Ukraine. Still, Friedman said at the time that 2022 was poised to mark the beginning of a new growth chapter for the company.
RH revenue for the three months ended April 30 totaled $957 million, compared to $861 million for the same period last year.
RH also said Wednesday that it has not repurchased any shares since announcing the expansion of its common stock repurchase plan on June 2.
Shares of the retailer are down 55% since the close on Wednesday.