RH's "Deteriorating" Outlook

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RH's "Deteriorating" Outlook

Shares of RH (NYSE: RH) dropped 4.85% in after-hours trading on Wednesday after the home-furnishings company updated its fiscal outlook.

Numbers: RH cut its fiscal 2022 projections, dropping net revenue growth between 2% to 5% and having an adjusted operating margin between 21% to 22%. It also sees quarterly net revenue growth in the range of 1% to 3% with an adjusted operating margin between 23% to 23.5%.

Problems: The company lowered its projections due to a “deteriorating macro-economic environment” that has resulted in lower than expected demand. RH cites higher mortgage rates and a decline in luxury home sales as problems.

Quote: “We anticipate the next several quarters will pose a short-term challenge as we cycle the extraordinary growth from the COVID-driven spending shift, shed less valuable market share as we continue to raise our quality, and choose not to promote our business while we navigate through the multiple macro headwinds…” - Gary Friedman, Chairman and CEO of RH.

Background: The declining fiscal outlook comes just a few weeks after RH reported its financial earnings and said it has “experienced softening demand trends.”

Bigger Picture: RH’s declining outlook seems to have a broader impact. Shares of Williams-Sonoma (NYSE: WSM), another high-end home-furnishings company, dropped 3.80% in after-hours trading.

Final Thoughts: This is bigger than just RH’s problem. This fiscal update shows that even high-end consumers are spending less money.

Notables

Notable Earnings Today: Micron Technology (Nasdaq: MU), Walgreens Boots Alliance (Nasdaq: WBA), Constellation Brands (NYSE: STZ), Accolade (Nasdaq: ACCD), Acuity Brands (NYSE: AYI), Simply Good Foods (Nasdaq; SMPL), Lindsay (NYSE: LNN), Renalytix (Nasdaq: RNLX).

Notable IPOs Today: Investcorp India Acquisition Corp. Class A ordinary share (Nasdaq: IVCA).

Notable Equity Crowdfunding Campaigns Ending Today: N/A.

Notable Economic Events Today: Initial Jobless Claims (8:30 a.m. ET), PCE Price index (8:30 a.m. ET), Personal Spending (8:30 a.m. ET), Chicago PMI (9:45 a.m. ET).

Coinbase Rolls out Solana Staking

Coinbase (Nasdaq: COIN) announced Wednesday afternoon that it is expanding its staking offerings to include the cryptocurrency Solana.

Definition: Solana staking involves assigning certain tokens to a validator to improve their voting weight.

Benefits: At Coinbase, the staking allows users to earn rewards and maintain more control over their accounts.

Final Thoughts: Despite the news, the price of Solana dropped over 5% on Wednesday.

Bank of America Trying to Overcome Hard Times

Amid a rough year in the banking sector, Bank of America (NYSE: BAC) is trying to reverse its bad fortune.

Numbers: Shares of Bank of America are down over 30% this year. In 2021, the stock increased by 46%.

Recent Developments: After struggling in the recent Fed stress test, Bank of America increased its dividend. The bank also recently invested in the alternative investment platform iCapital.

Final Thoughts: Bank of America reports earnings on July 18.

Trends to Watch

Delayed Takeoff: Spirit Delays Shareholder Vote on Frontier Merger, Extends Talks (Bloomberg)

More Time Needed: Crypto exchange CoinFlex probably won’t resume withdrawals Thursday as planned, says CEO (CNBC)

Bed Bath and Beyond Done With the CEO: Bed Bath & Beyond CEO Mark Tritton Exits as Sales Plunge (The Wall Street Journal)

Next Jab: Pfizer signs new $3.2 billion COVID vaccine deal with U.S. government (Reuters)

Join the Crowd: CrowdStreet Says They Are Expanding Access for Individual Investors During Market Volatility, Hires New Executives (Crowdfund Insider)

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