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RH Shares Jump 18% On Strong Results, Outlook

Shares of RH (RH) jumped 18% on Monday's after-hours trading after the home-furnishing retailer reported a strong result for the third quarter. The company also lifted its outlook for the fourth quarter and full year 2018 and issued a strong guidance for fiscal year 2019 as well.

Corte Madera, California-based RH's third-quarter profit surged to $22.4 million or $0.81 per share from $13.2 million or $0.56 per share last year.

Adjusted earnings for the quarter rose to $1.73 per share from $1.04 per share last year. Analysts polled by Thomson Reuters estimated earnings of $1.27 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter jumped 7 percent to $636.6 million from $592.5 million last year. Analysts had a consensus revenue estimate of $632.18 million.

Comparable brand revenues increased 4 percent in the third quarter on top of a 6 percent increase last year.

The company said its results reflect strong full price selling, higher outlet margins, and continued cost benefits from its new operating platform.

Moving ahead, RH increased its fourth-quarter revenue guidance to a range of $680 to $690 million, from previous guidance of $665 to $685 million, and lifted adjusted earnings guidance to a range of $2.75 to $2.90 per share from previous guidance of $2.33 to $2.54 per share. Analysts currently estimate earnings of $2.50 per share on revenues of $679.35 million.

The company also raised its fiscal 2018 revenue guidance to a range of $2.519 to $2.529 billion from previous guidance of $2.489 to $2.521 billion, and lifted its adjusted earnings guidance to a range of $8.33 to $8.47 per share from previous guidance of $7.35 to $7.75 per share. Analysts currently estimate earnings of $7.63 per share and revenues of $2.51 billion.

The company also expects revenues of $2.72 to $2.82 billion and adjusted earnings of $9.30 to $10.70 per share for 2019. Analysts currently estimate earnings of $8.32 per share and revenues of $2.73 billion.

RH closed Monday's trading at $123.65, up $7.51 or 6.47%, on the NYSE. The stock further gained $22.32 or 18.05% in the after-hours trading.

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