We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In the last reported quarter, this leading luxury home furnishings retailer’s earnings and revenues surpassed the Zacks Consensus Estimate by 49.4% and 2.9%, respectively. The company beat earnings expectations in three of the last four quarters and missed on one occasion, the average being 15.5%.
However, the earnings and revenues decreased by 35.8% and 19.3%, respectively, from the year-ago level.
Trend in Estimate Revisions
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share moved upward to 93 cents from 92 cents over the last 30 days. The estimated figure indicates a decrease of 83.6% from the $5.67 per share reported in the year-ago quarter.
The consensus mark for revenues is pegged at $752.11 million, suggesting a 13.5% decline from the year-ago reported figure of $869.07 million.
Factors to Note
RH’s fiscal third-quarter results are likely to have been impacted by high mortgage rates, the Fed’s back-to-back interest rate hikes and the cycling of record pandemic-driven sales. The weakening macroeconomic conditions, characterized by rising interest rates and a slowdown in the luxury housing sector, are anticipated to have had a negative impact on the quarterly results.
The company is grappling with supply-chain difficulties, causing both short-term and long-term delays. These issues have resulted in additional expenses related to distribution centers and elevated product and freight costs, potentially affecting overall profitability. RH expects the above-mentioned headwinds to persist over the next few quarters. This apart, it has been witnessing fixed occupancy deleverage over the past several quarters, which is expected to have weighed on third-quarter fiscal 2023 results.
Nonetheless, the company has been working on various strategies to elevate and enhance the RH brand image, which is expected to have contributed to the quarterly performance. Also, the transformation of the entire business into a digital platform via The World of RH — a portal presenting the company’s products, places, services and spaces — is commendable.
Overall, for the third quarter of fiscal 2023, RH expects revenues of $740-$760 million and an adjusted operating margin in the range of 8-10%. In third-quarter fiscal 2022, the company reported revenues of $869 million and an adjusted operating margin of 20.8%.
Our model predicts adjusted net revenues to decline 13.6% year over year to $750.6 million in the fiscal third quarter. We expect the adjusted operating margin to be 9.3% in the quarter.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for RH this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: The company has an Earnings ESP of +0.22%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Williams-Sonoma Inc. (WSM - Free Report) reported mixed results for the third quarter of fiscal 2023 (ended Oct 29, 2023). In the quarter, earnings beat the Zacks Consensus Estimate, but revenues missed the same. Both metrics declined year over year.
The quarterly results reflect low contributions from the company’s reportable brands, driven by ongoing softness witnessed in consumer discretionary spending, especially on furniture. Also, elevated levels of promotional activity and current macroeconomic uncertainties added to the downtrend. That said, Williams-Sonoma’s solid operating model partially offsets the headwinds through its full-price selling, supply-chain efficiencies and top-tier customer service.
Builders FirstSource’s (BLDR - Free Report) third-quarter 2023 earnings and net sales surpassed the Zacks Consensus Estimate. However, both metrics declined year over year.
For 2023, the company reduced the upper limit of its net sales projection to $16.8-17.1 billion from $17.8 billion. Gross margin is now anticipated between 34% and 35% (from 33-35%), adjusted EBITDA in the band of $2.7-$2.8 billion (from $2.6-$2.9 billion) and adjusted EBITDA margin between 15.8% and 16.7% (versus 15-17%).
Beacon Roofing Supply, Inc. (BECN - Free Report) reported mixed results for third-quarter 2023, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
The upside was backed by solid demand from the non-discretionary repair and re-roofing market. The company capitalized on this demand, focusing on disciplined pricing, labor productivity and working capital management. Also, the emphasis on Ambition 2025 growth initiatives, strategic investments in greenfields and acquisitions drove top-line growth. The company also lifted its expectations for the year.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why RH's Earnings are Likely to Decline Y/Y in Q3
RH (RH - Free Report) is scheduled to report third-quarter fiscal 2023 (ended Oct 28, 2023) results on Dec 7, after market close.
In the last reported quarter, this leading luxury home furnishings retailer’s earnings and revenues surpassed the Zacks Consensus Estimate by 49.4% and 2.9%, respectively. The company beat earnings expectations in three of the last four quarters and missed on one occasion, the average being 15.5%.
However, the earnings and revenues decreased by 35.8% and 19.3%, respectively, from the year-ago level.
Trend in Estimate Revisions
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share moved upward to 93 cents from 92 cents over the last 30 days. The estimated figure indicates a decrease of 83.6% from the $5.67 per share reported in the year-ago quarter.
RH Price and EPS Surprise
RH price-eps-surprise | RH Quote
The consensus mark for revenues is pegged at $752.11 million, suggesting a 13.5% decline from the year-ago reported figure of $869.07 million.
Factors to Note
RH’s fiscal third-quarter results are likely to have been impacted by high mortgage rates, the Fed’s back-to-back interest rate hikes and the cycling of record pandemic-driven sales. The weakening macroeconomic conditions, characterized by rising interest rates and a slowdown in the luxury housing sector, are anticipated to have had a negative impact on the quarterly results.
The company is grappling with supply-chain difficulties, causing both short-term and long-term delays. These issues have resulted in additional expenses related to distribution centers and elevated product and freight costs, potentially affecting overall profitability. RH expects the above-mentioned headwinds to persist over the next few quarters. This apart, it has been witnessing fixed occupancy deleverage over the past several quarters, which is expected to have weighed on third-quarter fiscal 2023 results.
Nonetheless, the company has been working on various strategies to elevate and enhance the RH brand image, which is expected to have contributed to the quarterly performance. Also, the transformation of the entire business into a digital platform via The World of RH — a portal presenting the company’s products, places, services and spaces — is commendable.
Overall, for the third quarter of fiscal 2023, RH expects revenues of $740-$760 million and an adjusted operating margin in the range of 8-10%. In third-quarter fiscal 2022, the company reported revenues of $869 million and an adjusted operating margin of 20.8%.
Our model predicts adjusted net revenues to decline 13.6% year over year to $750.6 million in the fiscal third quarter. We expect the adjusted operating margin to be 9.3% in the quarter.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for RH this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: The company has an Earnings ESP of +0.22%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: RH currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Some Recent Retail-Wholesale Releases
Williams-Sonoma Inc. (WSM - Free Report) reported mixed results for the third quarter of fiscal 2023 (ended Oct 29, 2023). In the quarter, earnings beat the Zacks Consensus Estimate, but revenues missed the same. Both metrics declined year over year.
The quarterly results reflect low contributions from the company’s reportable brands, driven by ongoing softness witnessed in consumer discretionary spending, especially on furniture. Also, elevated levels of promotional activity and current macroeconomic uncertainties added to the downtrend. That said, Williams-Sonoma’s solid operating model partially offsets the headwinds through its full-price selling, supply-chain efficiencies and top-tier customer service.
Builders FirstSource’s (BLDR - Free Report) third-quarter 2023 earnings and net sales surpassed the Zacks Consensus Estimate. However, both metrics declined year over year.
For 2023, the company reduced the upper limit of its net sales projection to $16.8-17.1 billion from $17.8 billion. Gross margin is now anticipated between 34% and 35% (from 33-35%), adjusted EBITDA in the band of $2.7-$2.8 billion (from $2.6-$2.9 billion) and adjusted EBITDA margin between 15.8% and 16.7% (versus 15-17%).
Beacon Roofing Supply, Inc. (BECN - Free Report) reported mixed results for third-quarter 2023, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
The upside was backed by solid demand from the non-discretionary repair and re-roofing market. The company capitalized on this demand, focusing on disciplined pricing, labor productivity and working capital management. Also, the emphasis on Ambition 2025 growth initiatives, strategic investments in greenfields and acquisitions drove top-line growth. The company also lifted its expectations for the year.