RH (NYSE: RH) shares rose Wednesday after the company reported better-than-expected earnings for its year end and issued strong FY2018 earnings guidance.
The company, based in Corte Madera, California, reported Tuesday GAAP and adjusted net revenues of $2.44 billion for the full year, an increase of 14% versus last year.
GAAP net income registered $2.2 million compared to $5.4 million last year.
CEO Gary Friedman reported that “With 95% of our core RH business driven by members, we can confidently declare our move from a promotional to membership model a success. Membership has enhanced our brand, streamlined our operations and vastly improved the customer experience.
"We’ve made significant progress redesigning our operating platform, inclusive of closing two distribution centers, simplifying our reverse logistics and outlet model, and reducing inventory by $225 million, or 30% versus a year ago.
"Our focus on cash resulted in the Company generating $433 million in free cash flow in 2017, enabling the repurchase of 20.2 million shares of RH stock, which we believe will continue to be an excellent allocation of capital for the long term benefit of our shareholders.
Friedman went on to say, "In 2018, we will continue our focus on execution, architecture and cash. We will once again hold ourselves back from adding new businesses outside of our ongoing investments in RH Hospitality as we work to design an operating platform that aligns with and amplifies our luxury positioning."
RH shares moved into noon hour on Wednesday ahead $17.59, or 23.4%, to $92.90.
Related Stories
