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In the last reported quarter, this leading luxury home furnishing retailer’s earnings and revenues missed the Zacks Consensus Estimate by 146.2% and 0.2%, respectively. The company beat earnings expectations in two of the last four quarters and missed on other two occasions, the average negative surprise being 26.1%.
Trend in Estimate Revisions
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has moved downward to $1.72 from $1.80 over the past 30 days. The estimated figure indicates a decrease of 40.3% from the $2.88 per share reported in the year-ago quarter.
The consensus mark for revenues is pegged at $776.9 million, which suggests 0.6% growth from the year-ago reported figure of $772.5 million.
RH’s fiscal fourth-quarter results are likely to be impacted by high mortgage rates and tepid demand. While RH primarily caters to affluent households, it has been encountering challenges due to increased interest rates and a softening luxury housing market, affecting its demand dynamics. Also, clearance pressure is expected to weigh on the quarterly results.
Also, higher expenses, including international openings, are expected to have weighed on margins. 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. RH’s strategy to digitally reimagine the RH brand and business model both internally and externally bodes well.
The Zacks Consensus Estimate for the company’s Furniture unit is currently pegged at $543 million, which depicts an improvement from $533 million a year ago. The same for the non-furniture unit is pegged at $233 million for the quarter, down from $240 million a year ago.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for RH this time. 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, which is not the case here.
Earnings ESP: The company has an Earnings ESP of 0.00%. 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 #4 (Sell).
Stocks With the Favorable Combination
Here are some companies from the Zacks Consumer Staples sector that, according to our model, have the right combination of elements to post an earnings beat for their respective quarters to be reported.
CLX is expected to register an 8.6% decline in earnings for the to-be-reported quarter. CLX reported better-than-expected earnings in each of the last four quarters, with the average surprise being 127.8%.
Church & Dwight Co. (CHD - Free Report) has an Earnings ESP of +1.32% and a Zacks Rank #3.
CHD’s earnings for the to-be-reported quarter are expected to grow 1.2%. The company reported better-than-expected earnings in each of the last four quarters, with the average surprise being 9.7%.
Coty Inc. (COTY - Free Report) has an Earnings ESP of +30.94% and a Zacks Rank #3.
COTY’s earnings for the to-be-reported quarter are expected to decline 68.4%. The company reported better-than-expected earnings in two of the last four quarters and missed on other two occasions, with the average surprise being 115.3%.
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Here's Why RH's Earnings Are Likely to Decline Y/Y in Q4
RH (RH - Free Report) is scheduled to report fourth-quarter fiscal 2023 (ended Feb 3, 2024) results on Mar 27 after market close.
In the last reported quarter, this leading luxury home furnishing retailer’s earnings and revenues missed the Zacks Consensus Estimate by 146.2% and 0.2%, respectively. The company beat earnings expectations in two of the last four quarters and missed on other two occasions, the average negative surprise being 26.1%.
Trend in Estimate Revisions
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has moved downward to $1.72 from $1.80 over the past 30 days. The estimated figure indicates a decrease of 40.3% from the $2.88 per share reported in the year-ago quarter.
The consensus mark for revenues is pegged at $776.9 million, which suggests 0.6% growth from the year-ago reported figure of $772.5 million.
RH Price and EPS Surprise
RH price-eps-surprise | RH Quote
Factors to Note
RH’s fiscal fourth-quarter results are likely to be impacted by high mortgage rates and tepid demand. While RH primarily caters to affluent households, it has been encountering challenges due to increased interest rates and a softening luxury housing market, affecting its demand dynamics. Also, clearance pressure is expected to weigh on the quarterly results.
Also, higher expenses, including international openings, are expected to have weighed on margins. 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. RH’s strategy to digitally reimagine the RH brand and business model both internally and externally bodes well.
The Zacks Consensus Estimate for the company’s Furniture unit is currently pegged at $543 million, which depicts an improvement from $533 million a year ago. The same for the non-furniture unit is pegged at $233 million for the quarter, down from $240 million a year ago.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for RH this time. 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, which is not the case here.
Earnings ESP: The company has an Earnings ESP of 0.00%. 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 #4 (Sell).
Stocks With the Favorable Combination
Here are some companies from the Zacks Consumer Staples sector that, according to our model, have the right combination of elements to post an earnings beat for their respective quarters to be reported.
Clorox (CLX - Free Report) has an Earnings ESP of +1.80% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
CLX is expected to register an 8.6% decline in earnings for the to-be-reported quarter. CLX reported better-than-expected earnings in each of the last four quarters, with the average surprise being 127.8%.
Church & Dwight Co. (CHD - Free Report) has an Earnings ESP of +1.32% and a Zacks Rank #3.
CHD’s earnings for the to-be-reported quarter are expected to grow 1.2%. The company reported better-than-expected earnings in each of the last four quarters, with the average surprise being 9.7%.
Coty Inc. (COTY - Free Report) has an Earnings ESP of +30.94% and a Zacks Rank #3.
COTY’s earnings for the to-be-reported quarter are expected to decline 68.4%. The company reported better-than-expected earnings in two of the last four quarters and missed on other two occasions, with the average surprise being 115.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.