Restoration Hardware signage is displayed on a monitor of the floor of the New York Stock Exchange in New York, Feb. 24, 2017.
Michael Nagle | Bloomberg | Getty Images
RH, formerly Restoration Hardware, posted third-quarter earnings that topped analysts’ estimates and raised its 2019 forecast.
Despite the better-than-expected results, the company’s stock was down roughly half a percent in extended trading Wednesday.
Here’s how the company with Wall Street’s expectations, according to Refinitiv consensus estimates:
- Earnings per share: $2.79, adjusted, vs. $2.23, expected
- Revenue: $677 million vs. $676 million, expected
RH’s net income rose to $52.5 million, or $2.17 per share, from $20.1 million, or 73 cents per share in the same quarter a year ago.
After adjustments, the company earned $2.79 per share, exceeding the earnings of $2.23 per share analysts expected, according to Refinitiv.
Net revenue increased 6% to $677 million, from $636 million in the year ago quarter.
RH essentially left its fourth-quarter outlook unchanged, slightly widening its revenue guidance range to $703 million to $711.5 million from $703 million to $711 million. The company continues to expect to earn between $3.50 and $3.62 per share, on an adjusted basis.
For fiscal year 2019, RH increased its adjusted earnings range to between $11.58 and $11.70 per share and slightly narrowed its revenue outlook to between $2.685 billion and $2.694 billion. The company previously expected adjusted earnings between $10.78 and $11.01 per share and revenue between $2.680 billion and $2.694 billion.
Warren Buffett’s Berkshire Hathaway revealed in a SEC filing in early November that it had a roughly $206 million stake in RH as of the end of September. That makes Berkshire the fourth largest RH stakeholder, according to FactSet.
Despite being caught in the middle of the U.S.-China trade war, RH has seen its shares rise about 33% since its last earnings report and 72% year to date, thanks in part to analysts’ optimism on RH’s long-term growth and word of the Buffett investment.
“We expect RH to continue separating itself from the pack of lagging home furnishing retailers, with an aspirational luxury brand growing in popularity, quality new products and outstanding merchandising,” said Wedbush analysts Seth Basham and Nathan Friedman, reiterating their outperform rating on the stock in a note earlier this week. The analysts also pointed to improving consumer spending on luxury goods and the potential for new market expansion in Western Europe.
