Upscale home-furnishings company RH saw a decline in net revenues to $751 million in the third quarter from $869 million in the year-ago period.

The firm swung to adjusted net loss of $8 million compared to net income of $110 million last year.

Chairman and CEO Gary Friedman said the results were at the mid-point of the company’s guidance. 

Despite improved demand trends thanks to the launch of new collections, RH still faced several headwinds from peaking mortgage rates and the war in the Middle East. 

“With 82 per cent of homeowners having mortgages below 5 per cent, and 62 per cent below 4 per cent, we continue to expect the existing housing market to remain frozen until interest rates and/or home prices fall meaningfully,” Friedman elaborated.

“Additionally, the home furnishings market has become increasingly promotional, and we believe that will create a mix shift towards clearance products, pressuring gross margins.”

The company has lowered its full-year guidance, expecting revenue to be in the range of $3.06 billion to $3.08 billion.

Further reading: RH opens massive gallery at the DeHaan Estate