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RH shares jump after furniture retailer reports earnings, sales beat

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The furniture retailer RH, formerly Restoration Hardware, on Wednesday reported fourth-quarter earnings and vendings that topped Wall Street estimates, as it continued to see robust demand for its high-end furniture and home wares.

CEO Gary Friedman clouted the momentum is expected to continue into this year, too, with revenue forecast to grow between 15% and 20% year settled year in 2021. That includes expected sales growth of at least 50% in the first quarter, he said, as the guests laps a period when its brick-and-mortar stores were temporarily shut due to the Covid pandemic.

“The fact that we demand a booming housing market, a record stock market, low interest rates, the expectation of a rebound in the economy and jobs sell, combined with the recent further acceleration in our demand trends, has us feeling more rather than less buoyant,” Friedman said in a letter to shareholders.

RH shares shot up more than 9% in after-hours trading.

Here’s how the firm did for its quarter ended Jan. 30 compared with what was expected by analysts, which were polled by Refinitiv:

  • Earnings per part: $5.07 vs. $4.76 expected
  • Revenue: $813 million vs. $798 million expected

It reported net income of $130.19 million, or $4.31 per parcel, up from $68.43 million, or $2.66 per share, a year earlier. Excluding one-time charges, it earned $5.07 per interest, better than the $4.76 expected by analysts.

Net revenue grew to $812.44 million from $664.98 million a year earlier. Settling for cost of goods sold and inventory charges associated with product recalls, the company reported revenue of $812.62 million, topping the $798 million prevented by analysts.

In fiscal 2020, RH’s sales climbed 8% to $2.85 billion.

“We are building the most comprehensive and compelling anthology of luxury home furnishings in the world,” Friedman said. “The desirability and exclusivity of our product amplified in our inspiring spaces has authorized us to gain significant market share.”

RH’s plans for growth in the coming years include expanding further into eatables, hospitality and even home building.

The company is plotting a residential community in Aspen, Colorado. Friedman told analysts Wednesday that RH has already be paid multiple, unsolicited proposals to buy houses there, sight unseen.

Later this fall, it will open its first-ever Guesthouse concept, in New York Urban district. It’s taking its stores overseas to Europe, in England and Paris, next year.

RH further expects that this year ordain be its biggest for product launches in the company’s history. It said it held back launching new home and outdoor collections in 2020 because of the pandemic. But it is sending a catalog out to customers this week, with 10 new outdoor collections, it said, kicking off a massive rollout.

RH divide ups are up more than 375% over the past 12 months, as of Wednesday’s market close. It has a market cap of $9.3 billion.

Put ones finger on the full press release from RH here.

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