Restoration Hardware shares fell as much as 20% in pre-market trading on Thursday after the company cut its outlook for the year.
The luxury-furnishings retailer on Wednesday lowered its forecast for full-year adjusted earnings per share (EPS) to a range of $1.60 to $1.80, missing analysts’ forecast for $2.66 according to Bloomberg.
Its guidance for revenues for the full year also fell short of expectations, as did its second-quarter projections.
CEO Gary Friedman said the company lowered its projections following production delays for its contemporary RH Modern series.
Additionally, the company recently ended its promotional model and introduced a membership-based program where customers get access to discounts for an annual fee. This transition is expected to dent profits later this year.
For the first quarter, Restoration Hardware reported an adjusted earnings loss of $0.05 per share, missing the expectation for a gain of five cents.
Net revenues totaled $455.5 million, topping Wall Street’s forecast, while sales at stores open for more than one year rose 4%, less than expected.
And once again, the company would not have you blame it for everything.
“Our near term business performance is being pressured by the continued headwinds in the markets impacted by energy and currency, as well as a general slowdown in the luxury consumer market,” Friedman said in the earnings statement.