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By Christiana Sciaudone
Investing.com -- Restoration Hardware's stellar results weren't enough to make up for supply that can't keep up with demand.
Shares are down 4% as the company said revenue growth lagged demand by about 8 points in the third quarter. The stock hit a record on Wednesday with RH (NYSE:RH) benefiting from our nesting habits as we're stuck at home anyway.
Earnings per share of $6.20 was better than the estimated $5.23 on sales of $844 million, which compares to the expected $830 million, according to data compiled by Investing.com.
The gap between demand and revenue growth should be within a few points in the fourth quarter, but the recent spike of virus infections and shelter in place orders continue to negatively impact the company's manufacturing partners.
"We are now forecasting product supply to catch up to demand in the second half of 2021," the company said in a statement. That said, the cancel rate as a percentage of sales has been lower for the past three quarters than last year, signaling the company should convert a high percentage of the demand to revenue. "We expect that the unfilled orders will provide an $80 to $100 million positive impact to revenue growth in fiscal 2021."
Restoration Hardware expects "significant growth in the first half of 2021." Demand continues to be strong, with core demand in November up 39%. Total company demand was up 38% in August, 37% in September, 24% in October, and 35% in November. December-to-date demand is up 23%.