Restoration Hardware (RH) is set to report Q4 (Jan) results today after the close, with a call to follow at 5:00pm ET.
The S&P CapitalIQ consensus is for adjusted earnings of $5.59 per share and revenue growth of 15% yr/yr to $931.50 mln.
RH guided FY22 revs of $3.76-3.79 bln in the prior quarter, taking a conservative view of Q4 revenue growth due to Omicron and ongoing supply chain constraints.
RH has not missed estimates for five years, despite supply chain disruptions driving up input costs. That said their CEO described the supply chain disruptions as a “mess” and the worst they’d ever seen so it will be important to monitor that situation.
The timing of its openings overseas will be crucial as well. The company expected RH England to open in late May to early June. Omicron may have pushed the timing of its RH England opening into a later month, which may throw off its plan to open during nice weather, possibly impacting future sales.
RH could be affected by luxury homebuilders like Toll Brothers (TOL) limiting sales and focusing on production. The logic here is that if consumers can’t move into their new luxury home, they likely will put off purchasing premium interior decorations from RH.
TECHS:
The stock has suffered its share of struggles, falling nearly 30% YTD.
The current valuation of 15x forward earnings is not unreasonable. That said, the tight housing market could be driving the recent sell-off; RH's YTD declines are similar to TOL. This could mean that potentially bad news from Q4 is already priced in.
Heading into the report, RH has bounced off critical support and stalled out at the 50D.
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