The furniture retailer RH, formerly Restoration Hardware, on Wednesday reported fourth-quarter earnings and sales that topped Wall Street estimates, as it continued to see robust demand for its high-end furniture and home wares.
CEO Gary Friedman said the momentum is expected to continue into this year, too, with revenue forecast to grow between 15% and 20% year over year in 2021. That includes expected sales growth of at least 50% in the first quarter, he said, as the company laps a period when its brick-and-mortar stores were temporarily shut due to the Covid pandemic.
“The fact that we have a booming housing market, a record stock market, low interest rates, the expectation of a rebound in the economy and jobs market, combined with the recent further acceleration in our demand trends, has us feeling more rather than less optimistic,” Friedman said in a letter to shareholders.
RH shares shot up more than 9% in after-hours trading.
Here’s how the company did for its quarter ended Jan. 30 compared with what was expected by analysts, which were polled by Refinitiv:
- Earnings per share: $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 share, up from $68.43 million, or $2.66 per share, a year earlier. Excluding one-time charges, it earned $5.07 per share, better than the $4.76 expected by analysts.
Net revenue grew to $812.44 million from $664.98 million a year earlier. Adjusting for cost of goods sold and inventory charges associated with product recalls, the company reported revenue of $812.62 million, topping the $798 million anticipated by analysts.
In fiscal 2020, RH’s sales climbed 8% to $2.85 billion.
“We are building the most comprehensive and compelling collection of luxury home furnishings in the world,” Friedman said. “The desirability and exclusivity of our product amplified in our inspiring spaces has enabled us to gain significant market share.”
RH’s plans for growth in the coming years include expanding further into food, hospitality and even home building.
The company is plotting a residential community in Aspen, Colorado. Friedman told analysts Wednesday that RH has already received multiple, unsolicited proposals to buy houses there, sight unseen.
Later this fall, it will open its first-ever Guesthouse concept, in New York City. It’s taking its stores overseas to Europe, in England and Paris, next year.
RH further expects that this year will 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 mailing a catalog out to customers this week, with 10 new outdoor collections, it said, kicking off a massive rollout.
RH shares 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.
Find the full press release from RH here.
Source: Business - cnbc.com
