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The furniture dealer RH, formerly Restoration Hardware, reported fourth quarter earnings and sales ahead of Wall Street estimates on Wednesday as demand for quality furniture and housewares continued to be robust.
CEO Gary Friedman said the momentum is expected to continue this year. In 2021, sales are expected to grow between 15% and 20% compared to the previous year. That includes expected revenue growth of at least 50% in the first quarter, he said, The company has gone through a period of time in which its brick and mortar stores were temporarily closed due to the Covid pandemic.
“The fact that we have a booming real estate market, record equity market, low interest rates, expectations of economic and labor recovery combined with the recent further acceleration in our demand trends makes us feel more than less optimistic,” Friedman said in a letter to the shareholders.
The RH share gained more than 9% in after-hours trading.
Here’s how the company performed for the quarter ended January 30, compared to the expectations of analysts surveyed by Refinitiv:
- Earnings per share: $ 5.07 versus $ 4.76 expected
- Revenue: $ 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, last year. With no one-time expense, the company made $ 5.07 per share, better than what analysts had been expecting $ 4.76.
Net sales increased from $ 664.98 million a year ago to $ 812.44 million. Adjusted for the cost of goods sold and inventory costs related to product recalls, the company had revenue of $ 812.62 million, exceeding analysts’ expectations of $ 798 million.
In fiscal 2020, RH sales increased 8% to $ 2.85 billion.
“We’re building the world’s most comprehensive and compelling collection of luxury home furnishings,” said Friedman. “The desirability and exclusivity of our product, enhanced in our inspiring spaces, has enabled us to gain significant market share.”
RH’s growth plans for the coming years include further expansion into the food, hospitality and even housing sectors.
The company is planning a shared apartment in Aspen, Colorado. Later in the fall, the first guesthouse concept opens in New York City. It is taking its business to Europe, England and Paris next year.
RH continues to expect this year to be the largest for product launches in the company’s history. Due to the pandemic, it held back the introduction of new home and outdoor collections in 2020. But this week a catalog with 10 new outdoor collections will be sent to customers, which initiated a massive rollout.
The RH share has risen by more than 375% in the past 12 months at the market close on Wednesday. It has a market capitalization of $ 9.3 billion.