RH Stock Surges 18% On Strong Outlook

Shares of RH (RH) are up 18% after the luxury furniture retailer reported a strong first-quarter profit and reaffirmed its full-year outlook.California-based RH, formerly known as Restoration Hardware, reported earnings per share (EPS) of $0.13 U.S., which beat Wall Street’s consensus that called for a loss of -$0.07 U.S. Revenue in the first three months of the year totaled $814 million U.S., which was slightly below estimates of $818 million U.S.In terms of guidance, RH maintained its fiscal 2025 outlook that calls for revenue growth of 10% to 13%, and a margin of up to 21%. Management said they also anticipate $350 million U.S. in free cash flow this year. In the current second-quarter, revenue is forecast to grow between 8% and 10%, even as the company absorbs near-term pressure from import tariffs and international expansion costs.In the earnings release, management said they are operating in “the worst housing market in almost 50 years.” Still, RH managed to increase its net revenues 12% year-over-year while maintaining 7% adjusted operating margins. International performance remains a bright spot for the company. RH England reported a 47% demand increase in Q1, while RH Munich and Düsseldorf in Germany saw combined growth of 60%. Customer demand in Paris, London, and Milan is expected to grow following gallery openings in those cities over the next year.While tariff risks remain, RH’s management team said they are responding by shifting much of the company’s sourcing out of China. Prior to today (June 13), the stock of RH had declined 55% this year to trade at $176.87 U.S. per share.