Please ensure Javascript is enabled for purposes of website accessibility

RH Locations Are Closed Until Further Notice

By Jon Quast - Mar 30, 2020 at 6:55PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

New openings for the home-furnishings retailer are also on hold.

Luxury home-furnishings retailer RH (RH 1.34%) released 2019 financial results on Monday, and it was a record year. However, higher on investors' radars is the fact that the company is keeping its locations closed indefinitely due to the COVID-19 pandemic. Previously, it hoped to keep stores closed only until March 27. But as the coronavirus continues to spread, RH was forced to extend its closures.

For RH employees of closed locations, the company intended to pay them until March 27, when its reopening was planned. Now, the company will pay its workers only through April 3. 

A door to a store with a

Image source: Getty Images.

Good results, but a tough 2020 ahead

For 2019, RH generated $2.6 billion in revenue, up 6% from 2018. Fourth-quarter revenue was below expectations, in part due to low inventory placing purchases on back order. Undeterred, the company grew full-year earnings per share an impressive 77% year over year to $9.07. 

While those results are good, it could be a rough road in 2020 as RH retail locations are now closed indefinitely. The company has thus withdrawn all guidance for the year. But it did provide some current statistics. Since closing on March 17, demand at RH Gallery locations is down 40% from 2018. Demand at RH's Restaurants and Outlets is down 43%. 

New Gallery openings -- the RH furniture segment of the business -- have also been put on hold for now. It currently has 68 Gallery locations and had planned on opening five to seven new Gallery locations in 2020. But considering other consumer-discretionary retailers could permanently close in the coming months, it seems prudent for RH to wait on new openings for now.

In light of not being able to pay workers much longer, CEO Gary Friedman and his management team have elected to forgo their salaries as well.

Jon Quast has no position in any of the stocks mentioned. The Motley Fool recommends RH. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

RH Stock Quote
RH
RH
$307.56 (1.34%) $4.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.