Restoration Hardware Downgraded At Cowen & Co. On Concerns Over a Slowdown In Spending

Restoration Hardware Holdings Inc. was downgraded to market perform from overperform at Cowen & Co. based on concerns over slowed spending by high-end consumers. Cowen analysts say a decline in the S&P 500, which has lost 6.7% over the past three months, may be affecting the spending of its high-end customers. Cowen also sees risk in the uncertainty of the presidential election, the stronger U.S. dollar in light of Restoration Hardware's big business in Miami, where 1/3 of its business goes to South America, and weakness in the Texas and Canada oil economies. "We acknowledge home-related spending on furniture, appliances, and mattresses has been one of the strongest areas of consumer spending, especially over holiday, but the increasing promotional pressure could signal the early innings of a slowdown," analysts wrote. Cowen says Restoration Hardware was also very promotional in Dec. 2015, with extra days of 20% to 50% off all merchandise. Restoration Hardware shares are down 1.2% in premarket trading and down 40.2% for the past three months.