The Zacks Analyst Blog Highlights: Restoration Hardware
For Immediate Release
Chicago, IL –December 5, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Restoration Hardware RH.
Here are highlights from Tuesday’s Analyst Blog:
Why Restoration Hardware (RH) Soared Despite Market Rout
Shares of Restoration Hardware gained more than 9% on Tuesday, a trading session that saw broader indexes battered on renewed trade war fears and bearish yield curve trends. The home furnishings retailer managed to stick out from the pack thanks to its strong earnings result and guidance.
Restoration Hardware posted earnings of $1.73 per share, crushing the Zacks Consensus Estimate of $1.27 and improving 66% from the year-ago period. This performance also exceeded RH’s own guidance range of $1.15 to $1.33 per share.
Adjusted revenues for the quarter came in at $638.5 million, up 8% from the year-ago period. This also beat analysts’ expectations of $633 million. RH’s comparable brand revenues (comps) increased 4% on a year-over-year basis. This is especially interesting given that the comparable quarter saw comps growth of 6%.
“While the luxury housing market has sequentially slowed throughout 2018, our revenues have sequentially accelerated, despite cycling inventory reduction efforts and managing the business with a bias for earnings versus revenue growth, clearly demonstrating our ability to gain market share,” the company said in its release.
RH maintained its fiscal year 2019 revenue guidance. The company sees sales in the range of $2.72 billion to $2.82 billion, which would represent increases of 8% to 12%. RH raised its estimate for return on invested capital to more than 50% from 35%. Management said it will not see a material impact from Chinese tariffs.
RH shares opened at $145.45, up 17.6% from yesterday’s close. The stock reached an intraday high of $148.54 per share in early morning trading. The day’s volatility eventually took some steam out of its momentum, but RH still managed to close up 10.9% to $137.13 per share.
Meanwhile, it was a brutal day for broader indexes. Concerns about a flattening yield curve, slowing economic growth, and renewed trade uncertainties between the U.S. and China battered stocks. The S&P 500 lost more than 3.2%, while the dropped almost 3.1%.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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