via Bloomberg's Charlotte Chilton
The company is rapidly going private - on Friday RH announced it's already completed its $700M share repurchase program, bringing to nearly 50% the amount of stock retired in H1.
Unfortunately, according to BofA's Curtis Nagle (and seconded by Loop Capital's Anthony Chukumba), it's funding those buybacks with debt, thus significantly raising the company's risk profile.
Guggenheim's Steve Forbes isn't as concerned, calling the leverage "manageable," and expecting RH to meaningfully reduce its debt loan over the next couple of years.
Shares are flat today after Friday's big decline. They've more than doubled this year, suggesting some baking in of the large share count reduction.
Now read: RH: The Perils Of A Crowded Short »