Optimistic Trending Company: RH [RH]

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1422

The high demand for furniture during the pandemic has made RH (NYSE: RH) one of the biggest beneficiaries. Sales continue to grow by double-digits, and the stock has gained more than 450 % in the past 12 months. According to RH, sales will grow 15-20% this year.


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As a result of the pandemic, home furnishings have seen a boom in demand, and RH has taken advantage of the current trend. As a result of the new freedom from work, many Americans have invested in home improvements, and some have taken advantage of this period to buy a new home, then move. Growth in revenue for the year was 8% YoY. But it was 20% in the fourth quarter. Furthermore, the retailer reported a 36% market share increase in the fourth quarter. EPS increased by 53% on fiscal 2020 to $ 17.83.

Revenue at RH was just under $ 3 billion at the end of the year, but the company believes that the potential market could grow to $20 – $25 billion by 2020. As a result, the chain of stores will have to commence operations outside of the US. In 2022, the retailer plans to open offices in England (RH England) and Paris (RH Paris).

The company is also looking for new ways of interacting with consumers. As part of an effort to attract high-quality clients with offers such as restaurants and additional services, the company opens high-quality trading platforms (their full potential can be appreciated after the pandemic is over). A new type of store usually exceeds 5,000 square meters in area. The design bureau RH also supplies buyers in such salons. Currently, RH operates a total of 70 galleries alongside 39 RH Outlets.

RH maintains the current favourable business environment will continue well into the future. Forecasts suggest revenue will increase by 15-20% YoY in the 2021 fiscal year. Meanwhile, revenue in the first quarter is expected to grow by at least 50%.

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