Stocks were higher Friday with both the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) continuing their treks into record territory.

Today's stock market

Index Percentage Change Point Change
Dow Jones Industrial Average  0.29%  62.11
S&P 500  0.37%  9.01

Biotech stocks extended their rally to three days, with the iShares Nasdaq Biotechnology ETF (NASDAQ:IBB) up 1.68% today and 4% since Tuesday's close. Energy stocks were down on continued weakness in crude oil prices, and the Energy Select Sector SPDR ETF (NYSEMKT:XLE) lost 1.16% on the day.

Two retailers that reported earnings on Thursday received opposite reactions from the market. Lululemon athletica (NASDAQ:LULU) saw its shares rise sharply on a mild uptick in sales, while RH (NYSE:RH) was hammered despite reporting a sales gain of more than 20%.

Wall Street

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Lululemon shares stretch upward

Shares of lululemon athletica soared 11.6% after the company reported fiscal first-quarter results that beat expectations. The trendy maker of athletic apparel for yoga and other activities reported revenue of $520.3 million, up 5% from last year's period, and adjusted earnings per share of $0.32, up from $0.30 last year. Analysts were expecting earnings of $0.28 on revenue of $514.1 million. 

Comparable-store sales declined 2%, direct-to-consumer revenue was flat, and operating margin decreased 2.9 percentage points compared with Q1 2016. If these sound like results that would be unexciting to investors, it's because they only look good in comparison to low expectations set three months earlier. In March, the company told analysts that 2017 was off to a slow start and to expect adjusted Q1 EPS to come in between $0.25 and $0.27. When that outlook was issued, the stock plunged 23% in a single day. Clearly, the results this time were not so much good as they were less bad.

Investors may also be taking a more sanguine view of the company's future based on upbeat comments about the months ahead and some changes announced Thursday. The company will be restructuring the operations of its youth brand, ivviva, moving sales online and either closing its ivviva stores or converting them to the lululemon brand. 

"I'm excited to see the positive trends that materialized late in Q1 continuing into Q2," CEO Laurent Potdevin said. "Our current outlook for the remainder of 2017 is strong, and I'm energized by the growth strategies taking shape. I'm also confident in our plans to restructure ivivva and believe they are the best means to optimize this part of the business." That was a big upgrade from the comments made three months ago about a "slow start" to 2017.

Restoration Hardware goes on sale

When the upscale home furnishings retailer formerly known as Restoration Hardware reported fiscal Q1 results on Thursday, it managed to disappoint investors deeply enough to send its market capitalization down 25.7% today.

That was a notable accomplishment considering that the quarter's results were something most retailers could only dream of. Revenues were up 23% compared with an 8% gain a year ago, and were slightly above analysts' consensus forecast. Revenue growth was helped by an acquisition and some one-time inventory adjustments, but excluding these, organic growth was still 11% and comparable brand sales were up 9%. Adjusted earnings per share were a positive $0.05, compared with a loss of $0.05 last year, and matched expectations.

The company guided to revenue for the second quarter above consensus expectations, and raised the figure for the full year, but the numbers that disappointed investors were lowered guidance for adjusted earnings. The projected ranges are $0.38 to $0.43 for next quarter, and $1.67 to $1.94 for the full year. Analysts were expecting $0.64 in Q2 and $2.16 for the year.

CEO and Chairman Gary Friedman said, "While we expect revenue growth to accelerate, operating margins to expand, and to generate significant free cash flow in fiscal 2017, we are taking a cautiously optimistic approach to our outlook given the uncertain macro environment in addition to the many initiatives and investments we are undertaking."

Given the rough ride RH shareholders have had since late 2015, the market clearly has become impatient about the pace of its improvements in profitability.