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RH shares soar as new Beach House collection shows promise

RH shares have leapt almost 36% for the month to date after earnings beat expectations and the home retailer said the new Beach House collection is showing promise. RH reported fiscal first quarter net income of $35.7 million, or $1.43 per share, up from $25.5 million, or $1.01 cents per share, last year. Adjusted EPS of $1.85 blew past the FactSet consensus of $1.53. Revenue of $598.4 million was ahead of the $557.4 million reported last year and the FactSet estimate of $584.0 million. The company now expects fiscal 2019 adjusted EPS of $8.76 to $9.27, up from previous guidance for $8.05 to $8.69. “The top line is the primary story for Q1 in our opinion,” wrote Stifel analysts in a note. Stifel rates RH shares buy with a $140 price target. “Confidence in underlying trends as well as new product lines such as RH Beach House led the company to materially raise full-year guidance by more than the Q1 beat,” wrote Wedbush analysts, who rate RH stock outperform with a $160 price target. About 70% of the RH Beach House collection is new products. And Cowen analysts note that RH Chief Executive Gary Friedman seems pleased with the early indications on the collection’s book. “We believe RH is redefining the $143 billion U.S. home furnishing market by using its scale and unique lifestyle approach to offer superior quality product at value unmatched by competitors,” said Cowen. Analysts there maintain their market perform stock rating with a $120 price target. RH is up 2.2% in Tuesday trading, and down 3.5% for the year to date. The S&P 500 index is up 16.6% for the year to date.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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