RH (NYSE:RH) CEO Gary Friedman made some waves during the company’s earnings conference call when he evoked the memories of the Bear Stearns meltdown during the financial crisis.
Friedman made the point that he and other retail execs are out in front with warnings on inflation and supply chain pressures as opposed to the non-transparency depicted with Bear Stearns in The Big Short. In RH’s case, demand fell back as soon as the Russia-Ukraine headlines hit.
Friedman said his intention was not to go ahead and scare everyone, although he delivered a shot across the bow of the SPDR S&P Retail ETF (NYSEARCA:XRT) and SPDR S&P 500 Trust ETF (NYSEARCA:SPY).
Friedman unplugged: “I just wonder if anybody the Fed has picked up the phone and called a business person and said, hey, what do you think is happening with inflation? How’s ocean rates? How is this? How is that? I mean, I think, I don’t think anybody really understands what’s coming from an inflation point of view, because either businesses are going to make a lot less money, or they’re going to raise their prices. And I don’t think anybody really understands how high prices are going to go everywhere, in restaurants, in cars and everything. It’s — and I think it’s going to outrun the consumer. And I think we’re going to be in some tricky space.”
RH (RH) fell sharply after its revenue miss overshadowed news of a 3-for-1 stock split. The stock was defended by Wells Fargo earlier in the day.
Read More: RH CEO evokes Bear Stearns memory in delivering stark macro warning