If investors were to look solely at the numbers for its just-reported fourth quarter, high-end furnishings retailer Restoration Hardware (RH 0.19%) would have impressed. Comp sales were up, and revenue looked strong. But as is often the case, the market was more interested in predicting the future than measuring the past, and a guidance cut sent shares almost 20% lower in a day.

In this segment of the Motley Fool Money podcast, host Chris Hill and Fool senior analysts Aaron Bush, Ron Gross, and Jason Moser explain why signals in the housing market have RH management concerned, and weigh the question of whether or not would-be investors should be too.

A full transcript follows the video.

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This video was recorded on March 29, 2019.

Chris Hill: Fourth quarter results for Restoration Hardware looked good, but the retailer cut guidance for the full fiscal year. Shares of Restoration Hardware down nearly 20% on Friday. Ron, how bad was this?

Ron Gross: It wasn't that bad. I think it's a bit of an overreaction. The company has done a wonderful job over the last two or three years turning their business model and changing things around. Still, the quarter was really strong, with comp sales up 5%. Revenue flat, but that's because there was an extra week last year in the numbers. If we adjust for that, revenue is actually up 7%. Nice expense controls. Adjusted net income up 75%. The quarter in and of itself is very, very strong.

Now, conditions did start to deteriorate near the holiday season. They're citing some weak real estate markets, which affects this business, so they brought down guidance. I think 20% is a big overreaction. I think the company is doing really well. The numbers still look strong. Could be a good opportunity to actually pick up some shares.

Hill: But this is one of those businesses that potentially has some ripple effects in terms of the high-end housing market. Yes?

Gross: The high-end housing market has a ripple effects on lots of other businesses, yes, for sure. This will have some cyclicality. Again, a specialty retailer with real estate having a big impact on it, it will ebb and flow. But as long as they have their strategy together, their new loyalty program, they have merchandise in the stores that people want, even when the cycle is weak, you'll eventually get a rebound.