It wasn’t so long ago when RH (NYSE:RH) offered up warnings about the collapse of the housing market. The day it made those warnings, its shares jumped 5%. Now, it’s looking at bigger losses in Monday afternoon’s session thanks to bookkeeping errors.
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Reports offered up Friday evening noted that previous financial statements for 2022 contained a set of “…material unintentional errors” that made them unreliable for use. More specifically, the calculations of income per share, both basic and diluted, proved to be in error. However, based on word from Wedbush’s Seth Basham, the news isn’t as bad as some may think. A hefty stock buyback plan—1.8 million shares’ worth—makes it pretty clear that management is standing behind the company.
Further, RH offered up its expectations for future growth. Its earlier calls for the housing market to collapse are somewhat reflected here, as the company now expects revenue growth of between -3.5% and -4.5%. It expects the final numbers to come in closer to the -4.5% figure. It also expects its adjusted operating margin to come in between 21.5% and 22%, though it figures ultimately, the number will be closer to 22%.
Wall Street is generally sticking with the company as well. Currently, analyst consensus calls RH stock a Moderate Buy with 1.13% downside risk thanks to its average price target of $316.20.
