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Restoration Hardware (RH) Stock Soars on Earnings Beat, Upbeat Guidance

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Restoration Hardware Holdings, Inc. (RH - Free Report) just released its latest quarterly financial results, posting adjusted earnings of $1.33 per share and revenues of $557 million.

Currently, RH is a Zacks Rank #2 (Buy), but that could change based on today’s results. Shares of the company have gained about 11% over the past month, including a 4.8% gain during regular trading hours today.

The stock is currently up 11.2% to $132.01 per share in after-hours trading shortly after its earnings report was released.

Restoration Hardware:

Beat earnings estimates. The company posted adjusted earnings of $1.33 per share, crushing the Zacks Consensus Estimate of $1.01. Investors should note that this consensus projection has trended upward over the duration of the quarter.

Missed revenue estimates. The company saw revenue figures of $557 million, missing our consensus estimate of $564.1 million.

Total net revenues fell 0.8% year over year. Restoration Hardware cited 4 points of revenue drag from SKU rationalization and 2 points of drag from incremental outlet sales last year. Meanwhile, comparable brand revenue increased 1% in the quarter.

Quarterly adjusted net income improved to $33.5 million from just $1.8 million last year. Adjusted operating margin was 9.6% in the quarter, up from 1.5% in the year-ago period.

“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,” said CEO Gary Friedman.

Restoration Hardware also raised its fiscal 2018 guidance for the second time this year. The company now expects adjusted net revenues in the range of $2.53 to $2.57 billion and adjusted earnings of $6.34 per share to $6.83 per share. Prior to today’s report, our Zacks Consensus Estimates were calling for revenue of $2.55 billion and earnings of $5.85 per share.

Here’s a graph that looks at Restoration Hardware’s recent earnings performance:

Restoration Hardware Holdings, Inc. is a luxury brand in the home furnishings marketplace, offering product assortments across a number of categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, as well as baby and child products.

Check back later for our full analysis on RH’s earnings report!

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