We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
RH (RH - Free Report) ended fiscal 2020 on a solid note. This leading luxury retailer in the home furnishing space reported better-than-expected fourth-quarter fiscal 2020 results (ended Jan 30, 2021) on the back of strong demand and solid margins. Both adjusted earnings and revenues handily beat the Zacks Consensus Estimate and grew on a year-over-year basis.
Shares of gained 8.4% in the after-hours trading session on Mar 24, post the earnings release. RH witnessed a 36% increase in core demand for the fiscal fourth quarter. For February and the first two weeks of March, the same was up 73% and 96%, respectively, year over year. the company’s total demand was up 29% in the quarter.
Earnings, Revenue & Margin Discussion
Adjusted earnings of $5.07 per share surpassed the consensus mark of $4.78 by 6.1% and increased 36% from the year-ago level.
Adjusted net revenues of $812.6 million grew 22% year over year. The figure also surpassed the consensus mark of $797 million by 2%.
Adjusted gross margin expanded 480 basis points (bps) to 47.4% for the quarter owing to investments to elevate the RH brand. Adjusted SG&A margin contracted 140 bps.
Adjusted operating margin increased a notable 630 bps year over year to a record 23.7%. Adjusted EBITDA also surged 54.8% year over year to $224.4 million for the quarter. Adjusted EBITDA margin improved 580 bps year over year to 27.6%.
As of Jan 30, 2021, it operated 68 RH Galleries and 38 RH outlet stores in 31 states, the District of Columbia and Canada, as well as 14 Waterworks showrooms throughout the United States and U.K., and had sourcing operations in Shanghai as well as Hong Kong.
RH’s cash and cash equivalents were $100.4 million as of Jan 30, 2021 compared with $47.7 million on Feb 1, 2020. The company ended fiscal 2020 with merchandise inventories worth $544.2 million compared with $438.7 million as of Feb 1, 2020.
Net cash provided by operating activities was $500.8 million for fiscal 2020 compared with $339.2 million in the comparable year-ago period. Free cash flow totaled $405 million at fiscal 2020-end, up 23% from $330 million at fiscal 2019.
Fiscal 2020 Highlights
Adjusted earnings came in at $17.83 per share, increasing 53% from fiscal 2019. Net revenues of $2.85 billion grew 8% from $2.64 billion a year ago. Gross and operating margin expanded 540 bps and 750 bps year over year, respectively.
Fiscal 2021 View
Solid housing market momentum, a record stock market, low interest rates, the expectation of a rebound in the economy and jobs market, combined with the recent further acceleration in RH demand trends are expected to contribute to the company’s results.
RH expects first- quarter fiscal 2021 revenues to grow by at least 50% and adjusted operating margin in the 20% range.
Given the solid momentum in the business, RH expects revenue growth in the range of 15% to 20% with adjusted operating margin expanding 100 to 200 bps and ROIC in excess of 60% for fiscal 2021.
At Home Group Inc. reported fourth-quarter fiscal 2021 results, wherein both earnings and revenues beat the Zacks Consensus Estimate. Moreover, the top and the bottom lines grew significantly on a year-over-year basis.
Williams-Sonoma Inc. (WSM - Free Report) reported fourth-quarter fiscal 2020 results. The company’s earnings and revenues handily beat the Zacks Consensus Estimate and significantly increased year over year, courtesy of strength across all brands and accelerated e-commerce growth.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Shutterstock
RH's Q4 Earnings & Revenues Beat Expectations, Stock Rises
RH (RH - Free Report) ended fiscal 2020 on a solid note. This leading luxury retailer in the home furnishing space reported better-than-expected fourth-quarter fiscal 2020 results (ended Jan 30, 2021) on the back of strong demand and solid margins. Both adjusted earnings and revenues handily beat the Zacks Consensus Estimate and grew on a year-over-year basis.
Shares of gained 8.4% in the after-hours trading session on Mar 24, post the earnings release. RH witnessed a 36% increase in core demand for the fiscal fourth quarter. For February and the first two weeks of March, the same was up 73% and 96%, respectively, year over year. the company’s total demand was up 29% in the quarter.
Earnings, Revenue & Margin Discussion
Adjusted earnings of $5.07 per share surpassed the consensus mark of $4.78 by 6.1% and increased 36% from the year-ago level.
Adjusted net revenues of $812.6 million grew 22% year over year. The figure also surpassed the consensus mark of $797 million by 2%.
Adjusted gross margin expanded 480 basis points (bps) to 47.4% for the quarter owing to investments to elevate the RH brand. Adjusted SG&A margin contracted 140 bps.
Adjusted operating margin increased a notable 630 bps year over year to a record 23.7%. Adjusted EBITDA also surged 54.8% year over year to $224.4 million for the quarter. Adjusted EBITDA margin improved 580 bps year over year to 27.6%.
RH Price, Consensus and EPS Surprise
RH price-consensus-eps-surprise-chart | RH Quote
Store Update & Balance Sheet
As of Jan 30, 2021, it operated 68 RH Galleries and 38 RH outlet stores in 31 states, the District of Columbia and Canada, as well as 14 Waterworks showrooms throughout the United States and U.K., and had sourcing operations in Shanghai as well as Hong Kong.
RH’s cash and cash equivalents were $100.4 million as of Jan 30, 2021 compared with $47.7 million on Feb 1, 2020. The company ended fiscal 2020 with merchandise inventories worth $544.2 million compared with $438.7 million as of Feb 1, 2020.
Net cash provided by operating activities was $500.8 million for fiscal 2020 compared with $339.2 million in the comparable year-ago period. Free cash flow totaled $405 million at fiscal 2020-end, up 23% from $330 million at fiscal 2019.
Fiscal 2020 Highlights
Adjusted earnings came in at $17.83 per share, increasing 53% from fiscal 2019. Net revenues of $2.85 billion grew 8% from $2.64 billion a year ago. Gross and operating margin expanded 540 bps and 750 bps year over year, respectively.
Fiscal 2021 View
Solid housing market momentum, a record stock market, low interest rates, the expectation of a rebound in the economy and jobs market, combined with the recent further acceleration in RH demand trends are expected to contribute to the company’s results.
RH expects first- quarter fiscal 2021 revenues to grow by at least 50% and adjusted operating margin in the 20% range.
Given the solid momentum in the business, RH expects revenue growth in the range of 15% to 20% with adjusted operating margin expanding 100 to 200 bps and ROIC in excess of 60% for fiscal 2021.
Zacks Rank & Peer Releases
RH — which shares space with Haverty Furniture Companies Inc. (HVT - Free Report) in the Zacks Retail - Home Furnishings industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
At Home Group Inc. reported fourth-quarter fiscal 2021 results, wherein both earnings and revenues beat the Zacks Consensus Estimate. Moreover, the top and the bottom lines grew significantly on a year-over-year basis.
Williams-Sonoma Inc. (WSM - Free Report) reported fourth-quarter fiscal 2020 results. The company’s earnings and revenues handily beat the Zacks Consensus Estimate and significantly increased year over year, courtesy of strength across all brands and accelerated e-commerce growth.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>