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Furniture retailer RH, formerly known as Restoration Hardware, on Wednesday reported fourth quarter earnings and sales that exceeded Wall Street estimates as it continued to see strong demand for its high-quality furniture and household items .
CEO Gary Friedman said the momentum is expected to continue this year as well, with revenue growth expected to be between 15% and 20% year on year in 2021. This includes expected sales growth of at least 50% in the first quarter, he said, as the company is going through a period when its physical stores were temporarily closed due to the Covid pandemic.
“The fact that we have an expanding real estate market, a record stock market, low interest rates, the expectation of a recovery in the economy and the labor market, combined with the recent acceleration in our demand trends, makes us feel more , and no less optimistic, “Friedman said in a letter to shareholders.
RH’s shares soared more than 9% in after-hours trading.
See how the company fared in the quarter ended on January 30, compared to what was expected by analysts, who were heard by Refinitiv:
- Earnings per share: $ 5.07 against expected $ 4.76
- Revenue: $ 813 million versus expected $ 798 million
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, he 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 the cost of goods sold and inventory charges associated with product recalls, the company reported revenue of $ 812.62 million, exceeding the $ 798 million forecast by analysts.
In fiscal 2020, HR sales rose 8% to $ 2.85 billion.
“We are building the most comprehensive and attractive collection of luxury home furnishings in the world,” said Friedman. “The desire and exclusivity of our amplified product in our inspiring spaces has enabled us to gain significant market share.”
RH’s growth plans in the coming years include an even greater expansion in food, hospitality and even home construction.
The company is planning a residential community in Aspen, Colorado. Later this fall, he will open his first hostel concept in New York City. It is taking its stores to Europe, England and Paris, next year.
RH also expects this year to be its biggest product launch in the company’s history. He said he delayed the launch of new domestic and outdoor collections in 2020 because of the pandemic. But it is sending a catalog to customers this week, with 10 new external collections, he said, starting a massive launch.
RH shares have risen more than 375% in the past 12 months, as the market closed on Wednesday. It has a market capitalization of $ 9.3 billion.
Find the full HR press release here.