RH lowers FY24 revenue growth view to 5%-7% from 8%-10%

Consensus $3.19B. Cuts FY24 Demand growth view to 5%-8% from 12%-14%. Cuts Fy24 operating margin view to 11%-12% from 13%-14%. Cuts adjusted EBITDA margin view to 17%-18% from 18%-19%. The company states: “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.”