Restoration Hardware | $RH Stock | Shares Gain $25 On Q1 Earnings Beat & Guidance Boost

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Restoration Hardware Photo
The Restoration Hardware Holdings Inc. logo is displayed outside a store in New York, U.S., on Monday, Sept. 7, 2015. Restoration Hardware Holdings Inc. is scheduled to release earnings figures on Sept. 10. Photographer: Michael Nagle/Bloomberg via Getty Images

Restoration Hardware (NYSE: RH) 

 

Shares of RH rose sharply after the home furnishings retailer reported upbeat earnings results late Monday, for the first quarter of fiscal 2018.

The company also issued a rosy full-year earnings guidance sending its stock up $27, or 22% to $118 before the opening bell on Tuesday.

The company plans to put prioritize on earnings by ending the “the road of endless promotions” and “free shipping,” according to CEO Gary Friedman.

RH stock ended Monday’s regular trading session with a gain of 4.8%. The shares are up 37% year-to-date and 134% year-over-year.

RH Earnings & Outlook

The retailer reported a net income of $28.1 million, or $1.11 a share in the first quarter ended May 5. In the year-ago quarter, RH had a net loss of $3.4 million, or $0.09 a share.

Adjusted per-share earnings of $1.33 easily surpassed FactSet analysts’ estimate of $1.01 a share. Sales came in at $557 million, down 0.8% from $562 million in the same period last year. Analysts expected sales the company to report sales of $563 million.

RH anticipates adjusted earnings per share of between $1.70 and $1.77, on revenue of between $655 million and $662 million, for the second quarter.

For the full year, the retailer expects adjusted earnings per share of between $6.34 and $6.83, on revenues of between $2.53 billion and $2.57 billion.

RH CEO Comments

Commenting on the results, Gary Friedman said, “We articulated at the beginning of the year that we will be managing the business with a bias for earnings versus revenue growth in fiscal 2018. We will restrain ourselves from chasing low quality sales at the expense of profitability like many in our industry, and instead focus on building an operating platform that will enable us to compete and win over the long-term.”

The CEO continued, “Our first quarter adjusted diluted earnings per share of $1.33 versus $0.05 last year reflects that focus and demonstrates the power of our new membership model, our unique and proprietary product offering, our efforts to revolutionize physical retailing, and our work designing a massively more efficient operating platform.”

RH Company Profile

RH is a home furnishings retailer that offers various product categories, including textiles, furniture, garden and outdoor, lighting, bath ware, tableware, décor furnishings.

The retailer avails its products to customers through its retail outlets and galleries; as well as its e-commerce websites, which include rh.com, rhbabyandchild.com, rhteen.com, waterworks.com, restorationhardware.com and rhmodern.com.

RH operates in the United States, Canada, and the United Kingdom.

The company operated 83 upscale retail galleries comprising 47 legacy Galleries, 4 RH baby and child galleries, 1 RH modern gallery, and 16 design galleries as of February 3, 2018. It also owned and operated 32 outlet stores and 15 Waterworks showrooms.

RH was formerly known as Restoration Hardware Holdings, Inc. It took its current name in January 2017. It was founded in 1979 and its headquarters are located in Corte Madera, CA. – Reuters

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