RH ran past earnings expectations yet again at the beginning of 2021, and increased its forecast for the year Wednesday, sending shares more than 6% higher in late trading.
the retail chain formerly known as Restoration Hardware, reported first-quarter earnings of $130.7 million, or $4.19 a share, on net revenue of $860.8 million, up from $482.9 million a year ago. After adjusting for noncash compensation and other effects, the company reported earnings of $4.89 a share, up from $1.27 a share a year ago.
Analysts on average expected adjusted earnings of $4.03 a share on sales of $751.5 million, according to FactSet. The stock jumped more than 6% in after-hours trading following the release of the results, after closing with a 2.8% decline at $611.33.
In response, executives increased their outlook for the full year, predicting revenue growth of 25% to 30% after previously stating an increase of 15% to 20%. For the current quarter, executives expect revenue to increase 35% to 37% from the $709 million reported last year.
Those predictions point to second-quarter net revenue of more than $950 million and annual sales of at least $3.56 billion. Analysts on average were predicting second-quarter sales of $897 million and full-year revenue of $3.4 billion ahead of Wednesday’s report, according to FactSet.
“While fiscal 2021 will surely be a tale of two halves, there are many data points that lead us to feel optimistic that our strong performance will continue through the second half of 2021 with growth reaccelerating in fiscal 2022 and beyond,” executives wrote in a letter to shareholders that revealed the results. “These include a strong housing and renovation market, both with pent-up demand and a long tail, a record stock market, low interest rates and the reopening of several large parts of our economy. Additionally, the unmasking of the general public could lead to a Roaring Twenties type of consumer exuberance.”
RH stock has already gained more than 140% in the past year, with healthy earnings beats from the second half of 2020 juicing those gains. In comparison, the S&P 500 index
has increased 33.9% in the past year.