RH Earnings On Tap With Covid Cases Surging Again

RH (RH), the upscale furniture chain formerly known as Restoration Hardware, is expected to report higher earnings and sales when it reports second-quarter results after the market closes Wednesday. RH stock fell.


RH Earnings

Estimates: FactSet analysts see RH earnings jumping 33% to $6.51 per share with sales up 37% to $973 million. That would be a significant slowdown after RH earnings surged 285% in Q1 on a 78% sales gain. But year-over-year comparisons are getting tougher.

Results: Check back after the close.

Stock: Shares retreated 2% to 650.97 on the stock market today. RH stock broke out of a cup-with-handle base with a 724.10 buy point in early August. But the breakout soon failed and RH stock is now below its key 50-day line. It is possible a new base will form with a 744.66 entry, but shares have work to do.

Among other housing-related stocks, Floor & Decor (FND) dipped 1.7%, but not far from a new flat base following a modest prior run. Home Depot (HD) edged down 0.3% and Lovesac (BSET) fell 5.8%. Lovesac reports earnings on Thursday.

RH Stock: A Tale Of Two Halves

The home-renovation boom during the pandemic has helped RH stock over the last year as wealthier customers looked to remodel their homes to include more home office space and amenities.

Even as it did well as customers stayed home, RH management was also bullish about increased consumer spending as more segments of the U.S. economy opened amid rising Covid-19 vaccination rates. CEO Gary Friedman said that “the unmasking of the general public could lead to a Roaring Twenties type of consumer exuberance.

But now U.S. coronavirus cases have surged again due to the more-infectious delta variant.

Friedman said during the Q1 RH earnings call in June that the fiscal year would likely be “a tale of two halves.” But he was upbeat about the second half of the year and 2022.

RH is the No. 2 stock in IBD’s Retail-Home Furnishings group.

It has a 94 Composite Rating out of 99 and a best-possible EPS Rating of 99. The Composite Rating compiles scores on key fundamental and technical metrics: earnings and sales growth, profit margins, return on equity, and relative price performance.

Follow Gillian Rich on Twitter for investing news and more.


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