RH's Measured Stock Buyback Is a Win for Shareholders
When RH (NYSE: RH) reported results last week, some shareholders were likely looking to see how many shares the company repurchased. After all, the $2 billion increase to its share repurchase program, announced in the middle of 2022, represents a third of the company's current market capitalization. A buyback like this could really move the needle.
But to some investors' surprise, the retailer actually pulled back on its share repurchases, buying back just over a tenth of the shares it bought back last quarter. While this might initially sound like bad news to investors, a closer look reveals it's likely a smart move.
One reason some investors likely watch RH's buybacks so closely is because of its notable history of creating shareholder value through repurchases. In 2017, the company shocked investors when it announced that it had bought back over 20.2 million shares, or about 50% of its total share count, during the first seven months of the year.
Source Fool.com
