Shares of RH Inc.
rose more than 1% in the extended session Wednesday after the retailer reported third-quarter adjusted profit and sales that beat Wall Street estimates but said it will continue to see pandemic-related supply disruptions interfering with demand for its products. RH, formerly known as Restoration Hardware, said it earned $46.4 million, or $1.64 a share, in the quarter, compared with $52.5 million, or $2.17 a share, in the year-ago period. Adjusted for one-time items, the company earned $166.5 million, or $6.20 a share. Revenue rose 25% to $844 million. Analysts polled by FactSet expected adjusted earnings of $5.27 a share on sales of $836 million. Demand was hindered by limiting capacity in its restaurants, lower demand for its contract division due to a continued pullback in spending for hotels and others in the hospitality industry, and lower sales in its outlets, RH said. Revenue growth lagged due to “higher-than-anticipated demand and disruptions across our global supply chain as a result of the virus,” the company said in a letter to shareholders. The “recent spike of virus infections and shelter-in-place orders continue to negatively impact our manufacturing partners, and we are now forecasting product supply to catch up to demand in the second half of 2021,” the company said. Supply constraints will limit demand and revenue growth for the remainder of this year, but RH expects that unfilled orders will provide “an $80 (million) to $100 million positive impact to revenue growth in fiscal 2021,” it said. RH plans to open more stores next year, including its “guesthouse” in New York City, but said it would not give firm opening dates because of the pandemic. RH England was pushed for 2022, the company said. RH shares ended the regular trading day down 0.9%.