Why RH Stock Gained 21% in July

The furniture specialist raised its outlook for the year.

Demitrios Kalogeropoulos
Demitrios Kalogeropoulos
Aug 6, 2019 at 10:09AM
Consumer Goods

What happened

RH (NYSE:RH) stock last month gained 21%, easily eclipsing the S&P 500's 1% uptick, according to S&P Global Market Intelligence. That boost put shareholders back into positive returns for the year, with the stock up 12% so far in 2019, compared to a 14% increase in the wider market.

A modern living room.

Image source: Getty Images.

So what

Investors celebrated news that the luxury furniture seller is boosting its outlook. Executives said in late July that second-quarter sales should rise to between $696 million and $699 million, up from the prior range of between $681 million and $688 million. RH also hiked its earnings projection to a maximum of $2.72 per share, compared to $2.47 per share previously.


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Now what

CEO Gary Friedman and his team say they are "cautiously optimistic" about prospects for faster growth in the second half of 2019 due to strength in the high-end housing market. The bigger prize lies in international markets, though, where the company now believes it can double its targeted U.S. revenue of $4.5 billion over time. Investors will get more details on those demand trends when RH reports actual second-quarter results, likely in mid-September.