RH Swings To Q1 Profit, Lifts FY Outlook; Shares Up 7%

RH (RH), the luxury furniture business, Wednesday posted a profit for the first quarter, fuelled by a 78% increase in revenues. Earnings also trumped Wall Street view, as did revenues. Based on its results, the company increased its outlook for the full year. Following the news, shares of the company gained nearly 7% in the extended sessions.

Net income for the quarter was $130 million or $4.19 per share, compared to a loss of $3.2 million or $0.17 loss per share.

Excluding one-time items, income for the quarter rose to $142.3 million or $4.89 per share from $29.9 million or $1.27 per share in the same quarter last year. Seventeen analysts polled by Thomson Reuters expected the earnings to be $4.10 per share. Analyst estimates usually exclude the special items.

Revenue for the quarter increased 78% to $860.8 million from $482.9 million last year. Revenues trumped Street's consensus view of $757.65 million.

Looking forward, the company increased its full-year guidance after the strong performance. It now expects revenue growth of 25% to 30%, up from the prior view of 15% to 20%. For the second quarter, the company is eyeing a revenue growth of 35% to 37%. Eighteen analysts are looking for a 19.7% growth in revenue for the full year.

Apart from the multifold boost in revenue, another factor that propelled the higher income was the drop in expenses to $13 million from $40 million last year.

The company also broke the news of beginning its global expansion in 2022 with the opening of RH England, The Gallery at Aynhoe Park, and RH Paris, The Gallery on the Champs-Élysées.

The chairman and CEO of the company, Gary G. Friedman, said, "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."

The shares for the company are currently trading at $652.85, 6.79%, or $41.52 higher than $611.33 at the bell on Wednesday after opening at $628.83. In the 52-week period, the shares have ranged between $226.82 and $733.05 per share.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
The U.S. Food and Drug Administration said it now intends to review only a small subset of new emergency use authorization or EUA requests for diagnostic tests. As per an updated COVID-19 test policy with a view to ensure continued access to tests, the regulator further urged developers of all test types seeking marketing authorization to pursue traditional premarket review for most test types. Netflix, Inc. said it is adding a new feature to offer a more personalized mobile games experience on the platform. In a statement, Sophia Yang, Product Manager, Mobile Games, said the company is rolling out the ability to create game handles, with which members will be able to create a unique public username. This can be used across all Netflix games. General Motors Co. has delayed its plan to require employees to return to office many days a week until next year, reports said citing an internal memo signed by CEO Mary Barra. Last week, the company had announced that corporate workers would be required to return to respective offices at least three days a week, beginning later this year, as the COVID-19 pandemic eases.
Follow RTT