Shares of RH (NYSE:RH) were running over 14% higher this week after the luxury home furnishings company formerly known as Restoration Hardware reported earnings yesterday after the market closed.
RH stock had been trending lower in June before the earnings report, but first-quarter sales and profits hit record levels, leading the interior designer to raise its second-quarter and full-year guidance.
Chairman and CEO Gary Friedman said the retailer's performance was the result of "a strong housing and renovation market, both with pent up demand and a long tail, a record stock market, low interest rates and the reopening of several large parts of our economy."
Numerous home-oriented retailers, whether it's the DIY big box stores like Home Depot or even deep discount chains like Big Lots, have posted record sales and profits because of the COVID-19 pandemic.
Stuck at home and receiving stimulus checks, consumers embarked on a campaign to upgrade and remodel their houses. RH is yet another to benefit from this unique set of circumstances.
Revenue soared 78% to $860.8 million from the year-ago period while earnings rocketed to $4.89 per share, a 285% increase. Management raised its second-quarter sales outlook to an increase of 35% to 37% while full-year sales are projected to rise 25% to 30%.
While it will be going up against increasingly difficult comparisons as the year progresses, RH also withheld the launch of its contemporary furniture line as well as its catalog until the fall, which could give the home goods retailer a new injection of consumer enthusiasm.
The question RH faces, of course, beyond comps, is whether the bullish housing market can be sustained.