
Restoration Hardware (RH) Stock Stumbles After Q1 Loss, Downgrades
NEW YORK (TheStreet) -- Shares of Restoration Hardware (RH) - Get Report are sliding by 5.14% to $26.95 on heavy trading volume late Friday morning, after the company reported an unexpected loss for the 2016 fiscal first quarter earlier this week, provided weak guidance and was downgraded by several firms.
After Wednesday's closing bell, the Corte Madera, CA-based luxury home design retailer posted a loss of 5 cents per share for the quarter ended April 30, while analysts were expecting earnings of 5 cents per share.
For the second quarter, Restoration Hardware sees earnings per share between 28 cents and 33 cents on revenue of $505 million to $520 million.
The FactSet consensus estimate at the end of May was for earnings of 81 cents per share on revenue of $534 million, MarketWatch noted.
Additionally, the company has been slapped with downgrades and concerns from analysts.
Deutsche Bank cut its rating on the stock to "hold" from "buy" with a price target of $35 yesterday.
"While the current headwinds may prove to be cyclical in nature, we simply believe there are too many moving parts in the near-term that will apply pressure over the next several quarters," the firm wrote in a note to investors.
The stock was also downgraded to "hold" from "buy" at UBS and to "market perform" from "strong buy" at Raymond James, MarketWatch said.
BB&T Capital Markets said it was not "completely surprised" by the weak results, but believes the credibility of the company's management should be called into question.
"[W]e are still flabbergasted by how quickly the wheels appear to be falling off of Restoration Hardware, and think the last two quarters' debacles cast significant doubt on management's credibility and ability to achieve long-term financial targets," the firm wrote in a note cited by MarketWatch.
About 4.05 million of the company's shares were traded so far today vs. its average volume of 1.49 million shares per day.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels.
But the team also finds weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: RH










