RH Q2 Earnings & Revenues Beat, View Up, Shares Rise 3.5%
Zacks Investment Research | Sep 10, 2019 10:43PM ET
RH (NYSE:RH) reported second-quarter fiscal 2019 results, wherein adjusted earnings and revenues handily beat the respective Zacks Consensus Estimate. The stock gained 3.5% in the after-hour trading session on Sep 10, after the company’s better-than-expected fiscal second-quarter results. Also, it raised its full-year guidance for the third time this year. Notably, RH took measures to mitigate the effects of the U.S.-China trade dispute and expects that tariffs will not impact the company’s ability to achieve financial goals in the long run.
Earnings, Revenue & Margin Discussion
RH’s second-quarter adjusted earnings of $3.20 per share surpassed the consensus mark of $2.70 by 18.5%. Moreover, the reported figure surged a notable 59% from the year-ago level.
Adjusted revenues (including recall accrual) of $706.5 million topped the consensus mark of $698 million by 1.2%. The said figure also increased 9.9% from the year-ago figure of $642.7 million. Despite adverse macro trends and higher tariffs, revenues grew year over year on the back of the core RH business, solid performance of new galleries (mainly RH New York), along with continued expansion of RH Hospitality. Also, planned accelerated outlet sales owing to the closure of a 500,000 square foot distribution facility in fourth-quarter fiscal 2018 added to the positives.
The company’s adjusted operating margin expanded 320 basis points (bps) year over year to 14.9%. Adjusted EBITDA also grew 29.8% year over year to $133.7 million in the quarter.
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