RH (NYSE: RH) reported Q2 EPS of $1.69, $0.07 better than the analyst estimate of $1.62. Revenue for the quarter came in at $829.66 million versus the consensus estimate of $827.61 million.

OUTLOOK

Despite expectations for industry conditions to remain challenging until interest rates ease and the housing market begins to rebound, we expect our demand trends to accelerate throughout fiscal 2024 and into 2025.
Due to the extensive transformation of our assortment, we expect revenue to lag demand during the year by approximately 4 to 8 points until we read and react to the new collections, reduce backorders and shorten special order lead times. Therefore, we will be guiding and reporting both demand and revenue growth each quarter during fiscal 2024 so shareholders and investors can accurately analyze the business.
We believe it is also important to note that we are now forecasting to end the year with an increased backlog of approximately $80 to $100 million due to revenue lagging demand throughout 2024, which will negatively impact adjusted operating and EBITDA margins by approximately 100 basis points for the year. Additionally, investments and startup costs to support our international expansion are now estimated to be an approximate 230 basis point drag for 2024.

Due to our inflection ramping later than expected we are adjusting our full year forecast for fiscal 2024 as follows
(52- versus 52-week basis):
Demand in the range of 8% to 10%
Revenue growth in the range of 5% to 7%
Adjusted Operating Margin in the range of 11% to 12%
Adjusted EBITDA Margin in the range of 17% to 18%

For the third quarter of fiscal 2024 we are forecasting:
Demand growth in the range of 12% to 14%
Revenue growth in the range of 7% to 9%
Adjusted Operating Margin in the range of 15% to 16%
Adjusted EBITDA Margin in the range of 21% to 22%

For earnings history and earnings-related data on RH (RH) click here.