HR Q1 results beat estimates, but margin cut prospects weigh on
Ivesting.com — HR on Thursday reported first-quarter results that beat Wall Street estimates and upgraded its full-year revenue guidance, but cut its outlook on margins as it looks to increase markdowns to clear inventory.
RH (NYSE:) was down 3% in after-hours trading following the report.
The company, which specializes in furniture and accessories for luxury homes, posted EPS of $2.21 on revenue of $739.9 million, beating analyst estimates for EPS of $2.12 on revenue of $732 million.
The pace on the top and bottom lines comes despite the decline in the overall macroeconomic environment, especially for home-related businesses.
Looking ahead, HR raised its fiscal 2023 revenue outlook to a range of $3 billion to $3.1 billion, but lowered its adjusted operating margin outlook to a range of 14.5% to 15.5%, in costs related to growing your global business. expansion. That compared with previous estimates for fiscal 2023 revenue in the range of $2.9 to $3.10 billion and adjusted operating margin in the range of 15% to 17%.
“[W]We are now forecasting further downgrades to liquidate discontinued inventory required to support our product transformation in the coming quarters,” the company said, adding that it expects the “luxury home market and broader economy to remain challenging over the next few quarters.” fiscal year 2023 and into next year. “
For the second quarter, revenue was targeted in the range of $765 to $775 million and adjusted operating margin in the range of 14% to 14.5%.