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Furniture retailer RH, formerly Restoration Hardware, reported fourth-quarter earnings and sales on Wednesday that beat Wall Street estimates as it continued to see strong demand for its high-end furniture and home goods.
CEO Gary Friedman said momentum is expected to continue this year as well, with revenue forecast to grow 15-20% year-on-year in 2021. That includes expected sales growth of at least 50% in the first trimester, he said. , as the company is going through a period in which its physical stores were temporarily closed due to the Covid pandemic.
“The fact that we have a booming real estate market, a record stock market, low interest rates, the expectation of a rebound in the economy and the job market, combined with the recent further acceleration in our demand trends, makes us feel more rather than less optimistic, “Friedman said in a letter to shareholders.
RH shares soared more than 9% in after-hours trading.
Here’s how the company fared in the quarter ending January 30 compared to what analysts, who were surveyed by Refinitiv, expected:
- Earnings per share: $ 5.07 vs. $ 4.76 expected
- Revenues: $ 813 million versus $ 798 million expected
It reported net income of $ 130.19 million, or $ 4.31 per share, compared to $ 68.43 million or $ 2.66 per share the previous year. Excluding one-time charges, it earned $ 5.07 per share, better than the $ 4.76 expected by analysts.
Net income grew to $ 812.44 million from $ 664.98 million the previous year. Adjusting for cost of goods sold and inventory charges associated with product recalls, the company reported revenue of $ 812.62 million, topping the $ 798 million anticipated by analysts.
In fiscal 2020, HR sales increased 8% to $ 2.85 billion.
“We are building the most comprehensive and attractive collection of luxury home furnishings in the world,” Friedman said. “The desirability and exclusivity of our amplified product in our inspiring spaces has allowed us to gain significant market share.”
HR’s growth plans in the coming years include expanding further into food, hospitality, and even home construction.
The company is planning a residential community in Aspen, Colorado. Later this fall, he will open his first pension concept in New York City. It will take its stores to Europe, England and Paris next year.
RH also expects this year to be the largest product launch in the company’s history. He said he refrained from releasing new home and outdoor collections in 2020 due to the pandemic. But it is shipping a catalog to customers this week, with 10 new outdoor collections, it said, kicking off a massive launch.
RH shares have risen more than 375% in the last 12 months, at the close of the market on Wednesday. It has a market capitalization of $ 9.3 billion.
Find the full HR press release here.