RH chairman and CEO Gary Friedman likes to describe his company as being on a trek up a metaphorical “luxury mountain,” but recently its financial results have felt more like a downhill slide. So the question everyone was asking as Friedman hopped on RH’s first-quarter earnings call was: Is it time to start climbing again?

Not quite yet. In reporting results after the market closed on Thursday, RH cut its top-line decline, with sales down about 1.7 percent to $726.9 million. That number beat Wall Street’s expectations, but just barely—analysts had pegged it at $724.7—and is still a decline from $739.2 million a year ago.

RH did buffer these results with news that demand was up 3 percent for the quarter, driven by a number of factors, including new products, outdoor introductions, and gains in market share as some competitors went out of business or cut back.

But it was the bottom line that seemed to grab analysts’ attention. RH’s $3.6 million loss of 20 cents per share blew away–in the wrong direction—a forecasted loss of 8 cents a share. Compare that to a $41.9 million profit for the same period last year.

Wall Street acted predictably and swiftly. RH’s stock was down as much as 11 percent in the first salvo of after-hours trading, to around $247 a share, taking the stock to its lowest levels since April and significantly off a 52-week high of $406.40 a share last August.

Still, Friedman painted his usual effusive portrait, both in his quarterly shareholder’s letter and on a two-hour call with analysts: “We are pleased to report that our demand trends inflected positive in the first quarter and ... we believe our investments in the most prolific product transformation and platform expansion in our history has positioned RH to gain significant market share in North America while building the foundation for our long-term global expansion across the United Kingdom, Europe, Australia and the Middle East over the next several years.”

Friedman said short-term, the going is tough, referring several times to what he called the most challenging housing market in 30 years. Still, even that was spun as a chance to grow. “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,” he said. “Those opportunities are beginning to materialize as a growing number of online furniture brands have ceased operations as the vast majority have demonstrated difficulty reaching profitability.”

Friedman said he expects RH “revenue to lag demand during the year by approximately 4 to 8 points until we read and react to the new collections” and that the company’s much-hyped international expansion is estimated to be an approximate 200-point drag on its numbers for fiscal 2024.

RH’s performance for the quarter comes as competitors like Arhaus and Williams-Sonoma have experienced headwinds too and at least one smaller niche player, Oka, has shut down its U.S. operation entirely. It’s why Friedman continued to say that no matter how good RH is, it is dealing with one issue out of its control: “We expect business conditions to remain challenging until interest rates ease and the housing market begins to rebound.”

And when, pray tell, will that happen? Friedman remains a little less optimistic about the luxury housing market than he did last quarter given the stagnation so far in 2024. On the call, he said he doesn’t expect to see any uptick until perhaps the second quarter of 2025.

That luxury mountain? It’s a treacherous climb.

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Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.