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RH Stock Surges after Impressive First-Quarter Results

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Jun. 13 2019, Published 11:10 a.m. ET

First-quarter performance

RH (RH), the upscale furniture company, reported its first-quarter earnings after markets closed yesterday. In the quarter ended May 4, the company’s adjusted EPS grew 52.9% YoY (year-over-year) to $1.85 and its revenue grew 7.4% YoY to $598.8 million.

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Stock performance

RH beat analysts’ revenue estimate of $584.02 million by 2.5%, and their adjusted EPS estimate of $1.55 by 19.4%. Following its better-than-expected performance, the company raised its 2019 revenue and EPS guidance. Despite increased tariffs and weak macro trends, RH is optimistic about its business, which it expects to be driven by the launch of RH Ski House and RH Beach House, investments in RH Interior Design, and product offering expansion. RH stock rose ~25.5% after trading yesterday.

Year-to-date performance

Up until yesterday, RH stock had fallen 20.8% this year, dragged down by the company’s low 2019 guidance and US-China trade tensions. In comparison, peers Williams-Sonoma (WSM) and Bed Bath & Beyond (BBBY) have risen 15.9% and 7.8%, this year, respectively. The SPDR S&P Homebuilders ETF (XHB), of which ~8.3% is invested in home furnishing and furniture companies, has returned 24.9%.

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