Restoration Hardware Sees Good Times Rolling On By Investing.com

By Christiana Sciaudone

Investing.com — Restoration Hardware continues to be a major pandemic winner. Shares are up 3.3% after the company forecast revenue growing up to 20% this year. 

That includes expectations of at least 50% sales growth for the first quarter, the company said in a statement. The company reported earnings that beat estimates, including a profit of $5.07, versus the expected $4.72. 

Restoration Hardware has been a major beneficiary of the pandemic and low interest rates as demand for renovations and new homes has skyrocketed as we’ve all been stuck at home for what seems like forever. That said, like others including Peloton (NASDAQ:PTON), Restoration Hardware is facing supply challenges.

“While we expect to face continued difficulties ramping vendor production to meet demand and don’t see the challenges with ocean freight or port congestion resolving themselves anytime soon, it’s hard not to forecast first quarter revenue growth of at least 50%, and adjusted operating margin in the 20% range,” said Chief Executive Officer Gary Friedman in a statement.  

Shares are still down about 7% since hitting a record this week. The stock has rallied some 400% from March 2020.

Analysts lauded the results, with firms from UBS to Wells Fargo (NYSE:WFC) upping their price targets on the retailer.

JPMorgan (NYSE:JPM) also raised its price target and reiterated its buy-equivalent rating, noting that guidance may be conservative. Cowen followed suit in increasing the price target for Restoration Hardware, seeing “plenty of room to outperform,” StreetInsider reported.  

“The luxury housing market remains incredibly strong, with February accelerating to +81% Y/Y following January’s decline to +77% Y/Y, as sales have increased above +90% on average over the past six months,” according to Cowen. “Overall, given the ongoing housing strength combined with a longer furniture purchase cycle, we anticipate demand can remain elevated for at-least the remainder of 2021.”