Is Restoration Hardware Holdings, Inc. (RH) part of your portfolio? If not, then this is the right time to add the stock as it looks very promising. And the underlying factors are capable of carrying the momentum further.
The stock carries a Zacks Rank #2 (Buy) and has surged roughly 43% year-to-date, demonstrating its inherent strength. The company’s long-term earnings per share growth rate stands at a healthy 26.2%. We believe that it could prove to be a solid bet for investors.
The company’s primary strength is its earnings surprise history. In the trailing seven quarters, Restoration Hardware has beaten the Zacks Consensus Estimate by an average of 24.3%, including 4.3% for the last concluded quarter. Since the announcement of the company’s third-quarter fiscal 2014 results on Dec 10, the company’s shares have increased 11.4%.
Impressive top-line performance helped Restoration Hardware to deliver quarterly earnings of 49 cents a share that beat the Zacks Consensus Estimate by a couple of cents, while rising 53% year over year.
This home furnishing retailer generated net revenue of $484.7 million that surged 22% year over year and also came ahead of the Zacks Consensus Estimate of $482 million.
Management now anticipates adjusted earnings in the band of 99 cents to $1.01 for the fourth quarter and between $2.33 and $2.35 per share for fiscal 2014. Also, Restoration Hardware now projects revenues in the range of $575–$585 million for the fourth quarter and between $1.86 billion and $1.87 billion for fiscal 2014.
The better-than-expected results triggered an uptrend in the Zacks Consensus Estimate, as analysts have become optimistic about Restoration Hardware’s future performance. This is evident from the movement witnessed in the Zacks Consensus Estimate that increased by a couple of cents for both fiscal 2014 and 2015 to $2.35 and $2.97 per share, respectively, in the past 30 days.
Restoration Hardware plans to continue focusing on transforming its retail outlets, adopting multi-channel platforms and expanding its product portfolio.
Other Stocks That Warrant a Look
Other favorably ranked stocks worth considering in the retail sector include Lowe's Companies Inc. (LOW), Kirkland's Inc. (KIRK) and Williams-Sonoma Inc. (WSM), all carrying a Zacks Rank #2.
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