RH, the high-end furniture retailer, has seen its stock tumble in extended trading, after it cut its forecast, Bloomberg reported Wednesday (June 29).
This was the second time the company cut its forecast in a month.
RH said the culprits are high mortgage rates and shrinking sales of luxury homes.
According to CEO Gary Friedman, the U.S. economy is not heading in a good direction, and investors have taken notice.
The company’s shares were down as much as 8.1% Wednesday after the markets closed in New York, and they’d already fallen 56% this year.
Friedman said in the last statement that demand “will continue to slow throughout the year.”
The company has seen its sales for this year do poorly, likely to drop as much as 5%, according to the company. A few weeks ago the company said revenue for the fiscal year would be flat to up 2%. There’s around a month left for this quarter, and the company didn’t change its outlook, suggesting most of the slowdown will be later in the year.
See also: Floundering Furniture Segment Faces New Threats From Competitors, Consumers
PYMNTS wrote that the furniture business has been seeing challenges for some time now, with Ikea, the biggest player in the field, now looking to add a $3 billion store refresh program to help stay afloat. This will help the company turn its warehouse stores into fulfillment centers.
Tolga Oncu, retail manager for Ingka Group, which oversees Ikea stores and franchises around the globe, said the retailer wants to “transform and redesign” its big blue box suburban outlets, adding features to accommodate digital customers.
Oncu said there’s “catch-up” to do for the back-end of the operation, and “we have realized that by including stores in our last mile and fulfillment design network we can create a win-win situation.”
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