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Why RH Stock Gained 21% in July

By Demitri Kalogeropoulos - Aug 6, 2019 at 10:09AM

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The furniture specialist raised its outlook for the year.

What happened

RH (RH -4.54%) 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.

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.

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