Restoration Hardware (RH) has updated and raised its second quarter and fiscal year 2019 revenue and earnings guidance.
The company’s updated outlook for second quarter of fiscal year 2019 includes adjusted net revenues in the range of $696 million to $699 million, an increase of 8% to 9% over last year, versus the previous outlook for revenues in the range of $681 million to $688 million.
Adjusted diluted earnings per share is forecasted in the range of $2.65 to $2.72, an increase of 40% to 44% over last year, versus the previous outlook for adjusted diluted EPS in the range of $2.33 to $2.47.
The company’s updated outlook for fiscal year 2019 includes adjusted net revenues in the range of $2.658 billion to $2.674 billion, an increase of 6% to 7% over last year, versus the previous outlook for adjusted net revenues in the range of $2.643 billion to $2.663 billion.
Adjusted diluted earnings per share is projected in the range of $9.08 to $9.52, an increase of 24% to 30% over last year, versus the previous outlook for adjusted diluted EPS of $8.76 to $9.27.
Gary Friedman, RH chairman and CEO, stated, “Our revenues continue to build momentum as we begin to pivot the company back to growth. We are pleased with the early results of RH Beach House introduced in late spring, and plan to unveil RH Ski House plus several new collections across RH Interiors and RH Modern this fall. We continue to be cautiously optimistic about our prospects for the second half of 2019 as we begin to cycle the compounding negative effect of multiple interest rate hikes and a depressed high end housing market last year, plus the stock market volatility that disrupted our business in the fourth quarter.
He continued, “Despite achieving industry leading operating margins we continue to demonstrate our ability to grow earnings significantly faster than revenues, illustrating the desirability of our proprietary product offering, and the emerging power of our new operating platform. As previously communicated, we believe the RH brand has the potential to reach $4 to $5 billion in North American revenues with mid-to-high teens operating margins and ROIC in excess of 50%. Additionally, we now believe there is an opportunity to more than double those revenues as we begin to expand globally, and move the brand beyond creating and selling products to conceptualizing and selling spaces.”