RH Stock Soars 20% Daily Above $210, Shifts Trend as Earnings Beat

Quick overview

In a letter to shareholders late Thursday, luxury home furnishings company RH (NYSE: RH) revealed first-quarter earnings that were higher than anticipated, indicating a positive outlook despite recent share price dip.

Financial Snapshot & Shareholder Communication

In a shareholder update published by Chairman and CEO Gary Friedman, RH revealed its financial results for the quarter ending May 3, 2025. The detailed letter is available on the company’s investor relations site at ir.rh.com. Despite revenue falling slightly short of Wall Street estimates, the company delivered a meaningful upside on the bottom line, reinforcing its operational discipline and premium market positioning.

Results and Outlook

RH posted first-quarter earnings that exceeded consensus forecasts, highlighting a stronger-than-expected margin performance. While revenues came in just below analyst projections, the company reaffirmed its full-year growth targets—signaling steady demand in its high-end furnishings segment.

The guidance reflects continued confidence in RH’s ability to navigate macroeconomic headwinds. Management is forecasting 10% to 13% revenue growth for the full fiscal year, alongside $250–$350 million in free cash flow. Additionally, capital expenditures are expected to decline over the coming years, supporting a more asset-light growth strategy.

Key Highlights – RH Q1 2025 Earnings and Outlook

• Earnings Surprise:
  RH (formerly Restoration Hardware) reported Q1 EPS of $0.13, beating analyst estimates by $0.20, as consensus expectations stood at a loss of $0.07 per share. The better-than-expected profitability comes as a positive surprise in a challenging macro environment.
• Revenue Results:
  Quarterly revenue came in at $814 million, narrowly missing the consensus forecast of $818.06 million. Despite the slight miss, total revenue grew 12% year-over-year, reflecting resilience in RH’s premium home furnishings business.
• Strong Forward Guidance:
  RH projects Q2 revenue growth between 8% and 10%, indicating confidence in continued demand. For the full fiscal year 2025, the company anticipates revenue expansion of 10% to 13%, suggesting healthy momentum in core markets.
• Free Cash Flow Forecast:
  Management expects free cash flow between $250 million and $350 million in 2025, reinforcing the company’s improving financial flexibility and operational efficiency.
• Capital Expenditure Trends:
  RH plans to reduce its adjusted capital expenditures over the coming years:
• 2026: Estimated between $200M–$250M
• 2027 and beyond: Target range of $150M–$200M
• This downward trajectory in capex indicates a maturing investment cycle and an effort to enhance shareholder value.

Share Price Activity and Market Reaction

Although RH shares have been under pressure for much of the past year—falling 21% in the last three months and 35% over the past 12—the sentiment appears to have shifted sharply in after-hours trading. RH closed the regular session at $176.90, but surged to $212.50 after the earnings release, suggesting a potential 20% bullish gap at Friday’s market open.

RH Stock Chart Daily – We’ll See A Major Bullish Gap Tomorrow

This rebound comes despite a difficult earnings revision trend: over the last 90 days, RH had seen 15 negative EPS revisions and zero positive revisions, indicating that the upside surprise may catch many investors off guard.

Conclusion: RH’s quarterly performance and forward outlook offer a promising turn in sentiment for a stock that has spent much of the past year in decline. With earnings resilience, disciplined spending, and a clear growth roadmap, RH is attempting to re-establish investor confidence—something that could be reflected in a sharp price recovery as trading resumes.

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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