Restoration Hardware stock rating reiterated by Stifel on Q1 results

Restoration Hardware (NYSE:RH), currently trading at $176.87 with a market cap of $3.3 billion, received a reiterated Buy rating and $390.00 price target from Stifel following the company’s first-quarter fiscal 2025 results. According to InvestingPro analysis, RH operates with a significant debt burden but is expected to remain profitable this year. The luxury home furnishings retailer matched analyst expectations and maintained its full-year 2025 guidance, including store opening plans. With a P/E ratio of 45.5x and gross profit margins of 44.5%, RH maintains its premium market positioning despite challenging conditions.

The company did announce a delay in its planned brand extension, pushing it from the second half of fiscal 2025 to fiscal 2026. RH’s second-quarter outlook came in softer than previously anticipated, with guidance including a 6 percentage point shipment headwind attributed to uncertainty surrounding Liberation Day.

Stifel noted that while RH did not disclose specific demand trends throughout the quarter, the performance and outlook suggest demand "meaningfully recovered" during the period. The firm expects RH shares to trade higher following these results.

The positive performance exceeded the "better than feared" expectations needed to revitalize investor enthusiasm for the stock. RH shares had declined 29% following Liberation Day, which coincided with the company’s fourth-quarter fiscal 2025 earnings release.

During the same period, the S&P 500 index gained 6.6%, highlighting RH’s significant underperformance relative to the broader market before this earnings announcement.

In other recent news, Restoration Hardware (RH) reported a surprising profit for the first quarter, posting earnings of 13 cents per share, contrary to analyst expectations of a 9-cent loss. The company’s revenue was $814 million, slightly below the anticipated $818.1 million, but the unexpected profit seemed to overshadow the revenue miss. Despite these challenges, RH maintained its full-year fiscal 2025 forecast, indicating management’s confidence in its business outlook. Additionally, the company announced a delay in launching a new concept until spring 2026 due to tariff uncertainties.

Jefferies recently raised its price target for RH to $209 from $208, maintaining a Hold rating. The firm noted RH’s strategic shift to reduce capital expenditures while accelerating Design Gallery openings as "unexpected" and "encouraging" for growth. However, Jefferies expressed concerns about RH’s international expansion challenges and increased promotional activity, which may impact results. RH’s strategic investments during the housing market downturn are aimed at creating a level of strategic separation in the industry, according to CEO Gary Friedman. The company plans to open several new galleries annually, focusing on expanding its international presence in cities like Paris, London, and Milan.

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