Shares of RH (RH 1.34%) were down on Tuesday, after the upscale home-furnishings retailer said that it will keep its stores closed indefinitely amid the ongoing coronavirus pandemic.
As of 11:30 a.m. EDT today, RH's shares were down about 11.3% from Monday's closing price.
RH reported earnings after the market closed on Monday, and they weren't bad: For the full fiscal year, earnings per share grew 77% to $9.07, on a 6% increase in revenue.
But 2020 is already shaping up as a very different kind of year.
RH had originally planned to keep its retail locations closed until March 27, and to pay its employees while they were closed. But that plan has had to change: CEO Gary Friedman said that the company's stores will now be closed indefinitely, and that it will pay its store employees through April 3, but not beyond that.
In an effort to show some solidarity with those workers, Friedman and the rest of senior management will forgo 100% of their salaries until business conditions improve.
For obvious reasons, RH withdrew its guidance for 2020, and declined to give any sort of forecast on Monday beyond saying that long-term prospects are still very good. But Friedman did note that although the company is making sales online while its stores are closed, total demand has fallen 40% since stores closed in mid-March.
For investors, here's the takeaway: RH should have the cash and resources to get through this, and it might even be in position to make some acquisitions as competitors falter. But it's going to be ugly for a while.