Upscale Retailer RH On Tap: Earnings Expected To Triple

Upscale furniture chain RH (RH) reports fiscal first-quarter earnings after the close today, as the housing market remains tight. RH stock dipped in afternoon trade.


RH reports as analysts try to gauge the company’s expansion plans and ability to meet demand.

RH Earnings

Estimates: Wall Street expects RH earnings to jump 217% to $4.03 a share, according to FactSet. Revenue was seen climbing 56% to $752 million.

Results: Due after the close. Year-over-year comparisons were easy, with earnings and revenue falling at the start of the pandemic before roaring back almost immediately.

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RH Stock

RH stock fell 2.5% to 612.85 in the stock market today. Shares of the company formerly known as Restoration Hardware have been hitting resistance at their 50-day line.

If it can break back above that key level and cross a downward-sloping trend line at about the same point, RH stock would offer an early entry. It could then build the right side of a base with a potential 733.15 entry.

RH stock and its relative strength line are off highs reached in April. The RS line compares a stock’s performance to the S&P 500. The higher the line moves, the more it is beating the benchmark index.

RH stock has a strong 97 Composite Rating. Its EPS Rating is 95.

Upscale home furnishings and furniture retailer William-Sonoma (WSM) fell 1.5%. Online furniture site Wayfair (W) gave up 1.2%.

‘Incredibly Supportive’

In a research note on RH stock last month, Cowen analysts said the “higher-end housing backdrop remains incredibly supportive and read-throughs point to continued underlying momentum.” 

The analysts said that during the RH earnings call, they would be looking for more detail on the opening of a store in Dallas as well as timelines for three other openings this year. They also said they would be looking for updates on the buildout of stores in the U.K. and Paris.

RH refers to its stores as galleries, and they often display furniture that way. Those stores often have restaurants. The company also wants to take its luxury sensibilities beyond retail, with plans to move into the hotel and housing businesses.

Last year, more wealthier customers, less affected by the coronavirus pandemic but still stuck inside, turned to the furniture chain to refurbish their homes.

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‘Signs Of A Very Good Year’

RH CEO Gary Friedman, on the fiscal fourth-quarter 2021 earnings call, said fiscal 2022 “has all the signs of a very good year.” He cited a robust housing market and strong stock market, as well as low interest rates and a recovery in the economy.

However, he said he expected the company would face “continued difficulties” boosting production to meet demand. He also said port congestion, which has squeezed other retailers that source products from abroad, would likely continue.

Friedman said in March that RH had delayed the launch of its RH Contemporary product line and mailing of its Source Books — its large print catalogs — until the fall. He said doing so would allow its manufacturers to “catch up to the increasing demand trends.”

But he said that decision “should also support a strong second half as we have held back new collections for the past year, which will result in one of our largest new product launches in our history.”


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