RH (NYSE: RH), formerly known as Restoration Hardware, reported its first quarter financial results after the market close on Wednesday. The Company topped analysts’ earnings and revenue estimates, sending shares 23% higher on Thursday morning.
For the quarter, RH reported earnings of USD 1.85 per share on revenue of USD 598 Million. Analysts expected earnings of USD 1.55 per share on revenue of USD 584 Million. RH witnessed its revenue increase by 7.4% year-over-year, while its earnings grew by 53% year-over-year.
RH attributed its strong quarter to its luxury lifestyle brand. RH began to target the luxury industry after it had dropped “hardware” from its name. The Company began to launch new products such as high-end furniture galleries and its outdoor furniture segment.
RH highlighted that its Gallery, RH New York helped accelerate the Company’s financials this quarter. RH’s New York gallery delivered in excess of USD 100 Million in annualized revenue.
In the fourth quarter, RH said it has several more projects to open: RH San Francisco, The Gallery at The Historic Bethlehem Steel Building. However, due to slight delays RH Charlotte and The Gallery at Phillips Place are expected to open during the first quarter of fiscal 2019.
At the end of the quarter, RH had a total of 70 RH galleries compared to 69 a year ago. RH had 40 outlets total operating versus 32 the same period a year ago.
Looking forward, RH said its expects to accelerate its real estate transformation to a rate of 5 to 7 new galleries in fiscal 2020 and a minimum of 7 new galleries in fiscal 2021.
Despite negative macro trends and increased tariffs, RH said it’s trying its best to remain positive. The Company said that the introduction of its RH Beach House segment, continued elevation and expansion of its product offering, investments in RH Interior Design, and the launch of its RH Ski House is helping the Company keep ahead.
Due to the stronger-than-expected quarter, RH raised its full-year guidance. For the rest of fiscal 2019, RH is expecting revenue between USD 2.64 Billion to USD 2.66 Billion compared to its previous forecast of USD 2.58 Billion to USD 2.63 Billion. The Company expects diluted earnings between USD 8.76 per share to USD 9.27 per share versus the prior guidance in the range of USD 8.05 per share to USD 8.69 per share.