RH has reported lower revenues for the fourth quarter, but anticipates that consumer demand will accelerate throughout this year thanks to its product transformation.

Net revenues for the three months ended February 3 were $738 million, down from $772 million in the prior year.

The upscale home furnishings retailer said revenue was negatively impacted by $40 million due to severe weather and shipping delays related to the Red Sea conflict. 

On the bottom line, net income was $11.3 million versus $106.8 million in the prior year.

For the full year, net revenues dropped to $3 billion from $3.5 billion in FY22, while net income fell to 127.5 million from $528.6 million.

“Fiscal 2023 was a year of adversity, innovation, and investment for team RH as we faced the most challenging housing market in three decades while investing in the most compelling product transformation and platform expansion in our history,” said chairman and CEO Gary Friedman.

“While aggressively investing during a downturn has put pressure on short-term results, it also positions us to capitalize on the long-term opportunities that present themselves during times of disruption and dislocation.”

Friedman expects the company to gain significant market share in fiscal 2024, given the positive response to its new 14-collection RH Outdoor Sourcebook. The upcoming RH Modern Sourcebook with 30 new collections is forecast to further boost demand throughout the second half.

The retailer is also planning to expand its network with several galleries set to open in the UK, Europe, Australia and the Middle East over the next several years. 

The company is expecting demand growth of 12 to 14 per cent and revenue growth of 8 to 10 per cent for the full year.