RH (NYSE:RH) shares are trading lower in the premarket session on Friday. In the first-quarter financial results reported after the closing bell, the luxury retailer flagged a “constantly changing outlook” regarding monetary policy.

In fact, the company expects the problem to continue to weigh on the housing market through the second half of 2024 and possibly into 2025.

Check This Out: Luxury Retailer RH Stock Falls After Q1 Results: Here’s Why

RH forecasted it will end the year with an increased backlog of approximately $110 million to $130 million due to revenue lagging demand throughout fiscal year 2024.

The company exited first quarter with cash and equivalents worth $101.79 million, with a total net debt of $2.382 billion.

In the first quarter, RH reported losses of 40 cents per share which missed the analyst consensus estimate of losses of 12 cents.

Quarterly sales came in at $726.96 million, which beat the analyst consensus estimate of $724.7 million. This is a 1.65% decrease from sales of $739.16 million in the same period last year.

RH plans to open a 3,500 square foot Waterworks Showroom in its Design Gallery in Newport Beach, California, opening in the fourth quarter of 2024. “We will also be developing a Waterworks Sourcebook with plans for a test mailing in 2025,” the company said.

Waterworks is today just shy of a $200 million business with a mid-to-high teens EBITDA margin. The company said it sees the potential for Waterworks to become a billion-dollar global brand on its platform.

“Our plan to expand the RH ecosystem globally multiplies the market opportunity to $7 to $10 trillion, one of the largest and most valuable addressed by any brand in the world today. A one percent share of the global market represents a $70 to $100 billion opportunity,” said Gary Friedman, CEO.

Price Action: RH shares are trading lower by 12.20% in the premarket session to $243.15 premarket at the last check on Friday.

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