Why Restoration Hardware (RH) Is Climbing After Hours

NEW YORK (TheStreet) -- Home furnishings retailer Restoration Hardware (RH) is soaring in extended trading after guiding for a better-than-expected first quarter.

After the bell, shares had surged 9.3% to $69.75.

For its current quarter ending April, the Corte Madera, Calif.-based business expects earnings of 9 cents to 11 cents a share. Analysts polled by Thomson Reuters expected 7 cents a share. Net income is expected between $3.7 million and $4.5 million, higher than estimates of $2.63 million.

In its year-ending January quarter, Restoration Hardware recorded net income of 83 cents a share, in line with estimates, and sales 18.5% higher year over year to $471.69 million. Analysts had expected revenue slightly higher to $493.09 million.

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"During the fourth quarter of fiscal 2013, we increased comparable brand revenue by 24%, on top of 29% last year, in spite of a tougher than anticipated holiday selling season and the impact of weather on our retail business," said CEO Gary Friedman in a statement.

TheStreet Ratings team rates RESTORATION HARDWARE HLDNGS as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate RESTORATION HARDWARE HLDNGS (RH) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."

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