RH's Shares Gain 25.6% On Q1 Earnings Beat & Upbeat Outlook
Zacks Investment Research | Jun 13, 2019 08:45AM ET
RH (NYSE:RH) reported stellar first-quarter fiscal 2019 results, wherein adjusted earnings and revenues surpassed analysts’ expectations. The stock gained more than 25% in the after-hour trading session on Jun 12, after the company issued strong full-year guidance. Notably, it 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, Revenues & Margin Discussion
RH’s first-quarter adjusted earnings of $1.85 per share surpassed the Zacks Consensus Estimate of $1.54 by 20.1%. Moreover, the reported figure surged a notable 53% from the year-ago level and came well ahead of its guided range of $1.47-$1.58 per share.
Adjusted revenues (including recall accrual) of $598.8 million topped the consensus mark of $583 million by 2.7%. The said figure also increased 7.4% from the year-ago figure of $557.4 million.
Despite adverse macro trends and higher tariffs, revenues grew year over year aided by the recent introduction of the RH Beach House, continued elevation and expansion of its product offerings, investments in RH Interior Design, launch of the RH Ski House, along with new galleries opening this fall.
The company’s adjusted operating margin expanded 300 basis points (bps) to 11.8% year over year. Adjusted EBITDA also grew 25.7% year over year to $100.4 million in the quarter.
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