RH Q1 sales soar 78%; will open in the UK, Paris in 2022

Marianne Wilson
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Restoration Hardware

RH reported first-quarter sales and earnings that beat expectations and raised its full-year forecast, expressing confidence that its strong performance will continue through the rest of the year and in 2022 and beyond.

The luxury home furnishings company (formerly known as Restoration Hardware) cited a number of factors for its positive outlook,  including 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 the economy. It will also launch the largest new product introduction cycle in its history, beginning this fall.

“Additionally, the un-masking of the general public could lead to a Roaring Twenties type of consumer exuberance,” CEO Gary Friedman wrote in his quarterly letter to shareholders.

RH will begin its global expansion  in spring 2022, with the opening of a location in England, at Aynhoe Park, a 73-acre historic estate. Pending reopening plans for France, the company expects to open RH Paris, The Gallery on the Champs-Élysées in Paris in fall 2022.

“In total we have secured five locations in Europe including London, Munich and Dusseldorf, and are in final lease negotiations for an additional five locations which will open over the next two to three years,” Friedman wrote.

RH’s net income totaled $130.7 million, or $4.19 per share, for the quarter ended May 1, compared with a loss of $3.2 million, or $0.17 per share, a year earlier. Excluding one-time adjustments, earnings totaled $4.89 per share, ahead of expectations for $4.10.

Revenue rose 78% to $861 million, topping beat expectations for $758 million.

RH hiked its fiscal 2021 outlook for revenue growth to a range of 25% to 30%, compared with a prior range of 15% to 20%. Analysts had forecast a 19.7% increase. For its fiscal second quarter, RH expects revenue to grow 35% to 37%.

The company said its newest location, in Dallas,  which opened in May is off to a “tremendous” start,  with its rooftop restaurant booked until August. RH will open three locations in 2021, with stores (“design galleries” in RH speak) in San Francisco; Oak Brook, Ill.; and Jacksonville, Fla. Also, the first-ever  RH Guesthouse, will open in New York City in the fall.